Regulatory Framework Defining Aerospace and Defense Industry Ecosystem
With increase in backlog of commercial aircraft deliveries across the globe, reforming regulatory framework for international trade, and increasing merger & acquisition, the aerospace and defense industry ecosystem is heading towards a distinct future.
In commercial aerospace, significant increase in oil prices has led a shift in consumer preference to advanced narrow body aircrafts from formerly demanded wide body aircrafts. Consequently, the duopoly in commercial aerospace is anticipated to witness significant blow during years to come.
The highly fragmented global aerospace and defense supply chain is anticipated to consolidate owing to the increasing merger and acquisitions aimed at increasing the profit margins to compensate for lower revenue generation fueled by the unstable regulatory framework across the globe.
The uptake in import and export duties on defense and aerospace raw materials fueled by transatlantic and transpacific trade tensions, is anticipated to impact the cost and profitability of the players operating in the A&D marketspace, specifically in North America and Europe. To compensate for the same, the market leaders are anticipated to opt for vertical integration.
Additionally, increasing investment for development of advanced electronic warfare, ammunition and equipment, and militarization of space by the U.S., China, France, Japan and India are anticipated to drive the growth of aerospace and defense industry during the foreseeable future.