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Military Aircraft Modernization, Upgrade, and Retrofit - Global Strategic Business Report

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    Report

  • 370 Pages
  • March 2025
  • Region: Global
  • Global Industry Analysts, Inc
  • ID: 5991221
The global market for Military Aircraft Modernization, Upgrade, and Retrofit was valued at US$19.8 Billion in 2023 and is projected to reach US$26.4 Billion by 2030, growing at a CAGR of 4.2% from 2023 to 2030. This comprehensive report provides an in-depth analysis of market trends, drivers, and forecasts, helping you make informed business decisions.

Global Military Aircraft Modernization, Upgrade, And Retrofit Market - Key Trends & Drivers Summarized

Why Is Military Aircraft Modernization Becoming A Strategic Priority?

The modernization of military aircraft is no longer an option but a necessity for nations seeking to maintain aerial superiority in an increasingly volatile geopolitical landscape. With rapid advancements in defense technologies, aging fleets face obsolescence, forcing governments to prioritize upgrades over replacements to manage costs effectively. The average lifecycle of a military aircraft spans decades, making timely upgrades essential to keep pace with evolving threats. Enhancements in radar systems, avionics, and electronic warfare capabilities are among the core areas targeted during these modernizations. Countries with large legacy fleets, such as the United States, Russia, and China, are at the forefront of this movement. The shift towards integrated systems, including AI-driven mission planning and next-generation communication systems, underscores the strategic imperative to modernize existing platforms. Nations are also increasingly focusing on retrofitting aircraft to meet multi-role operational requirements, enhancing versatility in combat and reconnaissance. The ability to integrate advanced weapon systems, including hypersonic missiles and smart bombs, is a crucial aspect of these retrofits. This aligns with the rising demand for enhanced mission flexibility to address modern warfare's dynamic nature. Furthermore, regional conflicts and defense budget constraints have pushed nations to explore cost-efficient modernization solutions rather than investing in entirely new fleets. Such trends highlight a global consensus on the criticality of military aircraft modernization for maintaining strategic and operational readiness.

What Role Does Technology Play In Shaping Retrofit Innovations?

Technology is the cornerstone of military aircraft upgrades, transforming how nations approach modernization and retrofit initiatives. Advanced digital systems, including open architecture avionics, are setting new standards in interoperability, enabling seamless integration of sensors, weapons, and communication tools. This modular approach not only simplifies upgrades but also ensures future compatibility with emerging technologies. The rise of AI and machine learning has further revolutionized military aviation, providing predictive maintenance capabilities, adaptive mission planning, and autonomous operational support. Furthermore, advancements in stealth technology have driven significant retrofitting activities, with older aircraft being equipped with radar-absorbing materials and infrared suppression systems. These upgrades enable legacy fleets to remain operationally viable in high-threat environments dominated by advanced surface-to-air missile systems. The integration of cutting-edge propulsion systems, such as adaptive-cycle engines, has also been a focus, offering improved fuel efficiency and enhanced performance. On the combat side, the development of electronic warfare systems capable of jamming enemy radars and disrupting communication networks has become a critical upgrade priority. The focus on cybersecurity enhancements reflects the growing concerns around electronic vulnerabilities, as cyberattacks on defense systems have become increasingly sophisticated. Thus, technology’s transformative role in retrofit innovations underscores its importance in maintaining the combat relevance of military aircraft in a rapidly evolving defense landscape.

How Are Global Geopolitics And Regional Conflicts Driving The Market?

The global military aircraft modernization market is intricately tied to the geopolitical environment, with escalating tensions between major powers fueling an urgent demand for advanced capabilities. The ongoing rivalry between the United States and China, along with Russia’s strategic maneuvers in Eastern Europe and the Middle East, has led to significant investments in air power. Regional conflicts in Asia-Pacific, the Middle East, and Eastern Europe have further amplified the need for operational readiness, pushing nations to accelerate their modernization programs. The rise of asymmetric warfare and the proliferation of advanced air defense systems in hostile regions have heightened the need for modernized aircraft capable of penetrating contested airspaces. The market also sees increasing participation from emerging economies such as India, South Korea, and Brazil, which are investing heavily in upgrading their fleets to counter regional threats. Additionally, the focus on collaborative defense initiatives, including NATO’s push for interoperability among member nations, has driven standardization efforts, necessitating retrofits for compatibility. Economic factors also play a crucial role in this dynamic. Defense spending as a percentage of GDP has surged in regions facing heightened threats, such as the Indo-Pacific. Meanwhile, export opportunities for modernized aircraft have created lucrative markets for defense contractors, especially in developing nations seeking to enhance their military capabilities without the financial burden of acquiring new fleets. These geopolitical and regional considerations provide the foundation for sustained growth in the modernization and retrofit market.

What Drives The Growth Of The Military Aircraft Modernization Market?

The growth in the military aircraft modernization, upgrade, and retrofit market is driven by several factors, each underscoring the urgency and strategic value of these initiatives. Foremost among these is the rapid pace of technological advancement, which renders existing systems obsolete far quicker than in the past. Defense contractors are leveraging innovations in artificial intelligence, quantum computing, and 5G connectivity to deliver unprecedented capabilities in situational awareness, threat detection, and decision-making. The push for autonomous operations is another key driver, with retrofits focusing on unmanned and optionally manned configurations to reduce pilot risks in high-stakes missions. Shifting consumer behavior, particularly the demand for versatile, cost-effective solutions, has also shaped the market. Governments and defense agencies increasingly favor modernization over replacement to maximize the utility of existing assets. Additionally, the rising adoption of modular and scalable systems allows for incremental upgrades, aligning with budgetary constraints while ensuring technological parity. End-use factors, such as the growing reliance on multi-role aircraft for diverse missions - ranging from reconnaissance to electronic warfare - have further propelled market growth. The evolving nature of air combat, characterized by network-centric warfare and joint force operations, necessitates retrofits that enhance connectivity and data-sharing capabilities. Moreover, the emphasis on environmental sustainability and reduced operational costs has driven interest in fuel-efficient engines and lightweight materials during modernization efforts. Finally, government policies and strategic defense collaborations, such as joint ventures between defense contractors and national governments, have bolstered investments in modernization programs. These drivers collectively paint a compelling picture of a market poised for sustained expansion, fueled by technology, operational demands, and geopolitical imperatives.

Scope of the Study

The report analyzes the Military Aircraft Modernization, Upgrade, and Retrofit market, presented in terms of market value (US$ Thousand). The analysis covers the key segments and geographic regions outlined below.

Segments:

Aircraft Type (Fixed Wing Aircraft, Rotary Wing Aircraft); End-Use (Combat Aircraft End-Use, Transport Aircraft End-Use, Other End-Uses).

Geographic Regions/Countries:

World; USA; Canada; Japan; China; Europe; France; Germany; Italy; UK; Spain; Russia; Rest of Europe; Asia-Pacific; Australia; India; South Korea; Rest of Asia-Pacific; Latin America; Middle East; Africa.

Key Insights:

  • Market Growth: Understand the significant growth trajectory of the Fixed Wing Aircraft Modernization, Upgrade, and Retrofit segment, which is expected to reach US$18.9 Billion by 2030 with a CAGR of a 4.3%. The Rotary Wing Aircraft Modernization, Upgrade, and Retrofit segment is also set to grow at 3.9% CAGR over the analysis period.
  • Regional Analysis: Gain insights into the U.S. market, valued at $8.5 Billion in 2023, and China, forecasted to grow at an impressive 5.9% CAGR to reach $2.3 Billion by 2030. Discover growth trends in other key regions, including Japan, Canada, Germany, and the Asia-Pacific.

Report Features:

  • Comprehensive Market Data: Independent analysis of annual sales and market forecasts in US$ Million from 2023 to 2030.
  • In-Depth Regional Analysis: Detailed insights into key markets, including the U.S., China, Japan, Canada, Europe, Asia-Pacific, Latin America, Middle East, and Africa.
  • Company Profiles: Coverage of major players such as BAE Systems plc, Collins Aerospace, Israel Aerospace Industries Ltd., L3Harris Technologies, Inc., Northrop Grumman Corporation and more.
  • Complimentary Updates: Receive free report updates for one year to keep you informed of the latest market developments.

Why You Should Buy This Report:

  • Detailed Market Analysis: Access a thorough analysis of the Global Military Aircraft Modernization, Upgrade, and Retrofit Market, covering all major geographic regions and market segments.
  • Competitive Insights: Get an overview of the competitive landscape, including the market presence of major players across different geographies.
  • Future Trends and Drivers: Understand the key trends and drivers shaping the future of the Global Military Aircraft Modernization, Upgrade, and Retrofit Market.
  • Actionable Insights: Benefit from actionable insights that can help you identify new revenue opportunities and make strategic business decisions.

Key Questions Answered:

  • How is the Global Military Aircraft Modernization, Upgrade, and Retrofit Market expected to evolve by 2030?
  • What are the main drivers and restraints affecting the market?
  • Which market segments will grow the most over the forecast period?
  • How will market shares for different regions and segments change by 2030?
  • Who are the leading players in the market, and what are their prospects?

Some of the 44 major companies featured in this Military Aircraft Modernization, Upgrade, and Retrofit market report include:

  • BAE Systems plc
  • Collins Aerospace
  • Israel Aerospace Industries Ltd.
  • L3Harris Technologies, Inc.
  • Northrop Grumman Corporation
  • Safran S.A.
  • Thales Group

Table of Contents

I. METHODOLOGYII. EXECUTIVE SUMMARY
1. MARKET OVERVIEW
Continuous Pressure to Stay Ahead Of The Curve & Keep Up With Rapidly Evolving Aircraft Technology Provides the Cornerstone for Growth in the Market
EXHIBIT 1: Military Effectiveness is Only as Good as its Assets - The Reason Why Aircraft Fleet Will Need to be Up-to-Date & Modernized: Global Military Aircraft Fleet Size (In Units) by Country as of the Year 2024
Economic Frontiers: Trends, Trials & Transformations
EXHIBIT 2: In a World Torn by Geopolitical Instability & War, Steadfastness of Global GDP Becomes Increasingly Unpredictable Given the Many Direct and Indirect Economic Repercussions: World Economic Growth Projections (Real Gross Domestic Product (GDP), Annual % Change) for the Years 2022 Through 2025
EXHIBIT 3: All Eyes on Global Inflation, the Main Risk Factor in Global Markets: Global Headline Inflation Rates (In %) for the Years 2019 through 2025
EXHIBIT 4: With Oil Prices Influencing the Rate of inflation, it Remains the Most Watched Commodity in Global Markets: Global Average Annual Brent Crude Oil Price (In US$ Per Barrel) for Years 2019 through 2025
Competition
EXHIBIT 5: Military Aircraft Modernization, Upgrade, and Retrofit - Global Key Competitors Percentage Market Share in 2024 (E)
Competitive Market Presence - Strong/Active/Niche/Trivial for 44 Players Worldwide in 2024 (E)
Influencer/Product/Technology Insights
Recent Market Activity
2. FOCUS ON SELECT PLAYERS
3. MARKET TRENDS & DRIVERS
Global Political Tensions Drive Steady Growth in Military Aircraft Modernization, Upgrades, and Retrofits Amid Rising Defense Spending
EXHIBIT 6: As Defense Budgets Grow More Generous Thanks to Rising Political Unrest in Europe, Asia & Middle East, 3D Printing Emerges as a Strategic Pillar of Efficiency Gains in Defense Manufacturing: Global Military Budget (In US$ Million) for the Year 2024 by Country
Rising Focus on Operational Readiness Drives Investments in Military Aircraft Modernization, Upgrade, and Retrofit
Modernization & Upgrade of Aircraft Avionics Witnesses Strong Growth. Here’s Why
EXHIBIT 7: A Fast Evolving Military Industry Brings Modernization Programs Into the Spotlight for Their Ability to Keep Up With Technological Change: Global Military Aircraft Avionics Market (In US$ Billion) for Years 2025, 2027, 2029, 2031, 2033 and 2035
Growing Focus on Defense Technology Transfer Agreements to Amplify the Volume of Planned Modernization Programs
Weapons Integration Emerges as a Prominent Type of Aircraft Modernization
Aging Military Aircraft Fleet in the U.S. in Dire Need of Modernization
Aging Avionics, an Added Cause for Concern for US Air Force: A Review of What Has Been Done & What Can be Done
High Costs of New Purchases Shifts Focus on Aircraft Engine Modernization, a Cheaper More Practical Alternative
Sustainability Concerns Drive Focus on Increasing Aircraft Efficiency Via Upgrades
EXHIBIT 8: As Concerns Grow Over the Sustainable Levels of Emissions, Military Aircraft Operators Take the Retrofit Route to Increase Aircraft Efficiency & Reduce Emissions: Global CO2 Emissions (In Billion Metric Tons) for Years 1960, 1970, 1980, 1990, 2000, 2010, 2020, 2021, 2022, 2023 and 2024
4. GLOBAL MARKET PERSPECTIVE
TABLE 1: World Military Aircraft Modernization, Upgrade, and Retrofit Market Analysis of Annual Revenues in US$ Thousand for Years 2014 through 2030
TABLE 2: World Recent Past, Current & Future Analysis for Military Aircraft Modernization, Upgrade, and Retrofit by Geographic Region - USA, Canada, Japan, China, Europe, Asia-Pacific, Latin America, Middle East and Africa Markets - Independent Analysis of Annual Revenues in US$ Thousand for Years 2023 through 2030 and % CAGR
TABLE 3: World Historic Review for Military Aircraft Modernization, Upgrade, and Retrofit by Geographic Region - USA, Canada, Japan, China, Europe, Asia-Pacific, Latin America, Middle East and Africa Markets - Independent Analysis of Annual Revenues in US$ Thousand for Years 2014 through 2022 and % CAGR
TABLE 4: World 16-Year Perspective for Military Aircraft Modernization, Upgrade, and Retrofit by Geographic Region - Percentage Breakdown of Value Revenues for USA, Canada, Japan, China, Europe, Asia-Pacific, Latin America, Middle East and Africa Markets for Years 2014, 2024 & 2030
TABLE 5: World Recent Past, Current & Future Analysis for Fixed Wing Aircraft by Geographic Region - USA, Canada, Japan, China, Europe, Asia-Pacific, Latin America, Middle East and Africa Markets - Independent Analysis of Annual Revenues in US$ Thousand for Years 2023 through 2030 and % CAGR
TABLE 6: World Historic Review for Fixed Wing Aircraft by Geographic Region - USA, Canada, Japan, China, Europe, Asia-Pacific, Latin America, Middle East and Africa Markets - Independent Analysis of Annual Revenues in US$ Thousand for Years 2014 through 2022 and % CAGR
TABLE 7: World 16-Year Perspective for Fixed Wing Aircraft by Geographic Region - Percentage Breakdown of Value Revenues for USA, Canada, Japan, China, Europe, Asia-Pacific, Latin America, Middle East and Africa for Years 2014, 2024 & 2030
TABLE 8: World Recent Past, Current & Future Analysis for Rotary Wing Aircraft by Geographic Region - USA, Canada, Japan, China, Europe, Asia-Pacific, Latin America, Middle East and Africa Markets - Independent Analysis of Annual Revenues in US$ Thousand for Years 2023 through 2030 and % CAGR
TABLE 9: World Historic Review for Rotary Wing Aircraft by Geographic Region - USA, Canada, Japan, China, Europe, Asia-Pacific, Latin America, Middle East and Africa Markets - Independent Analysis of Annual Revenues in US$ Thousand for Years 2014 through 2022 and % CAGR
TABLE 10: World 16-Year Perspective for Rotary Wing Aircraft by Geographic Region - Percentage Breakdown of Value Revenues for USA, Canada, Japan, China, Europe, Asia-Pacific, Latin America, Middle East and Africa for Years 2014, 2024 & 2030
TABLE 11: World Recent Past, Current & Future Analysis for Combat Aircraft End-Use by Geographic Region - USA, Canada, Japan, China, Europe, Asia-Pacific, Latin America, Middle East and Africa Markets - Independent Analysis of Annual Revenues in US$ Thousand for Years 2023 through 2030 and % CAGR
TABLE 12: World Historic Review for Combat Aircraft End-Use by Geographic Region - USA, Canada, Japan, China, Europe, Asia-Pacific, Latin America, Middle East and Africa Markets - Independent Analysis of Annual Revenues in US$ Thousand for Years 2014 through 2022 and % CAGR
TABLE 13: World 16-Year Perspective for Combat Aircraft End-Use by Geographic Region - Percentage Breakdown of Value Revenues for USA, Canada, Japan, China, Europe, Asia-Pacific, Latin America, Middle East and Africa for Years 2014, 2024 & 2030
TABLE 14: World Recent Past, Current & Future Analysis for Transport Aircraft End-Use by Geographic Region - USA, Canada, Japan, China, Europe, Asia-Pacific, Latin America, Middle East and Africa Markets - Independent Analysis of Annual Revenues in US$ Thousand for Years 2023 through 2030 and % CAGR
TABLE 15: World Historic Review for Transport Aircraft End-Use by Geographic Region - USA, Canada, Japan, China, Europe, Asia-Pacific, Latin America, Middle East and Africa Markets - Independent Analysis of Annual Revenues in US$ Thousand for Years 2014 through 2022 and % CAGR
TABLE 16: World 16-Year Perspective for Transport Aircraft End-Use by Geographic Region - Percentage Breakdown of Value Revenues for USA, Canada, Japan, China, Europe, Asia-Pacific, Latin America, Middle East and Africa for Years 2014, 2024 & 2030
TABLE 17: World Recent Past, Current & Future Analysis for Other End-Uses by Geographic Region - USA, Canada, Japan, China, Europe, Asia-Pacific, Latin America, Middle East and Africa Markets - Independent Analysis of Annual Revenues in US$ Thousand for Years 2023 through 2030 and % CAGR
TABLE 18: World Historic Review for Other End-Uses by Geographic Region - USA, Canada, Japan, China, Europe, Asia-Pacific, Latin America, Middle East and Africa Markets - Independent Analysis of Annual Revenues in US$ Thousand for Years 2014 through 2022 and % CAGR
TABLE 19: World 16-Year Perspective for Other End-Uses by Geographic Region - Percentage Breakdown of Value Revenues for USA, Canada, Japan, China, Europe, Asia-Pacific, Latin America, Middle East and Africa for Years 2014, 2024 & 2030
III. MARKET ANALYSISUNITED STATESCANADAJAPANCHINAEUROPEFRANCEGERMANYITALYUNITED KINGDOMSPAINRUSSIAREST OF EUROPEASIA-PACIFICAUSTRALIAINDIASOUTH KOREAREST OF ASIA-PACIFICLATIN AMERICAMIDDLE EASTAFRICAIV. COMPETITION

Companies Mentioned (Partial List)

A selection of companies mentioned in this report includes, but is not limited to:

  • BAE Systems plc
  • Collins Aerospace
  • Israel Aerospace Industries Ltd.
  • L3Harris Technologies, Inc.
  • Northrop Grumman Corporation
  • Safran S.A.
  • Thales Group

Table Information