Market Trends of NATO Military Aircraft Modernization And Retrofit Industry
Fixed-wing Segment to Continue its Dominance During the Forecast Period
NATO countries are significant users of fixed-wing aircraft, with demand primarily fueled by increasing defense budgets in key member nations. In 2022, defense spending in the US, Canada, the UK, France, Germany, and Italy—some of the most prominent NATO members—tallied a staggering USD 1.11 trillion. These nations consistently rank among the top global defense spenders, underscoring their commitment to R&D in advanced weaponry and the acquisition of sophisticated military assets.
In March 2023, the French government marked a notable achievement by receiving their cutting-edge Rafale fighter jets, culminating in a four-year development journey. The F4 standard, which underwent flight tests by France's DGA, is set to be fully operational by 2025. Noteworthy features of the F4 include the Thales Scorpion helmet-mounted display, MBDA's MICA NG air-to-air missile, and Safran's AASM hammer precision-guided munition in a 1,000-kilogram variant.
In a parallel move, the UK revealed plans in June 2023 to upgrade its Beechcraft King Air 350ER fleet, previously utilized for training by the Royal Air Force and Royal Navy. This upgraded fleet is slated to serve from 2023 to 2033 and will be enhanced with features like an active electronically scanned array radar, an electro-optical camera, and reconfigured cabin and mission consoles, all part of a USD 155 million rear crew sustainment deal. Such advancements are poised to bolster the market's growth during the forecast period.
The United States to Dominate the Market During the Forecast Period
In 2023, the US dominated the market share, fueled by defense spending far surpassing other NATO nations. The US defense budget grew 2.3% year-on-year, reaching a staggering USD 916 billion. This substantial expenditure, coupled with escalating geopolitical tensions—particularly between China and Russia—has spurred a surge in military aircraft procurement and modernization efforts in the U.S.
For FY2024, the US Department of Defense (DoD) has set its sights on a USD 61.1 billion budget, targeting developing, modernizing, and procuring advanced air forces. This includes spotlighting fighters like the F-22, F-35, F-15EX, the B-21 bomber, and the KC-46A.
Echoing this commitment, in November 2023, the US Air Force inked a USD 2.3 billion deal with Boeing for 15 KC-46 Pegasus tanker aircraft, enhancing its aerial refueling and cargo transport capabilities. Beyond new acquisitions, the US heavily upgrades its military aircraft fleet to ensure peak readiness.
Similarly, in November 2023, the US Army contracted The Boeing Company to enhance its Apache helicopter fleet, opting for new engines and the latest software. Such strategic moves and contracts are poised to bolster demand in the US throughout the forecast period.
