Military avionics market worth US$17 billion this year


The global military avionics market will reach a value of US$16.94 billion this year as militaries around the world continue to develop and upgrade their avionics capabilities for a number of military settings and roles, a new report says.

In its report, The Military Aircraft Avionics Market 2012-2022, Visiongain said that spending by governments on military aircraft avionics over the coming decade, 2012-2022, will be pressurised by constrained defence budgets in many Western nations, despite avionics systems’ necessity and importance as part of military capabilities.

The US is projected by Visiongain to retain its position as the leading military aircraft avionics national market by the end of the forecast period, but growth within military aircraft avionics is also expected within emerging nations such as India, China, Saudi Arabia, and Brazil, where spending is projected to increase significantly.

The impacts of external events such as the winding down of duties in Afghanistan, coupled with rising military priorities within both the Middle East and Asia-Pacific over the coming decade, are expected to impact the military aircraft avionics market, with spending by governments reflecting geopolitical ambitions as well as fiscal responsibilities.

Meanwhile, last year Frost & Sullivan predicted that the worldwide avionics market should return to full health in about 2014, after showing recent signs of growth.
“We are seeing strong areas such as with retrofits, but are more conservative than others such as Airbus as to the current rate of growth,” said Diogenis Papiomytis, principal consultant with market researcher Frost & Sullivan. He warned that the market is still fragile and things could go the other way in a hurry with a natural disaster such as the volcanic ash issues from 2010.

Papiomytis said that market drivers include ageing fleets and glass cockpits that are becoming a “must have” for aircraft designers.

The market restraints are the concern that oil prices may peak again and could cause production cuts, the permanent parking of older aircraft; and mandatory equipment installations limiting funds for other aircraft, he says.

Experts are predicting 5 percent year- on-year growth for the avionics market through 2020, Papiomytis said. He predicted the avionics market through 2020 would be worth around US$100 billion (US$57.8 billion for forward fits, US$29.7 billion in services, and about US$14.4 billion in retrofits).

Much of the avionics demand is coming from Asia. Last month Cheong Chern Wai, Senior Consultant for Frost & Sullivan’s Asia Pacific Aerospace & Defence team said that in the next two decades, Asia Pacific will account for approximately 30% of global aircraft deliveries. “This represents significant opportunities for the avionics market. Avionics account for about 11%-12% of an aircraft value, and research shows that the Asia Pacific market is forecast to grow at an estimate of 7.4% from 2011 to 2015.”