The aerospace and defense sector has witnessed huge growth in the past few years owing to the increasing number of global geopolitical tensions such as the Russia-Ukraine war, the Israel-Palestine conflict, the China-Taiwan crisis, etc. Moreover, the growing threat of terrorism has led to a surge in demand for different defense technologies to counter this menace. Along with these factors, the last quarter of 2024 experienced certain key developments and trends that played an important role in the growth of the aerospace and defense domain. This newsletter outlines all such significant factors that impacted the landscape in Q4 2024 and analyzes each aspect of the sector in detail. The performance of the domain in different regions is also studied comprehensively. The major restraints creating hurdles in the industry’s growth are highlighted in this newsletter, along with solutions and measures taken by leading companies in the sector.

Key developments and industry updates accelerating the sector’s growth and success

In Q4 2024, several multinational giants invested heavily in R&D activities and launched innovative products to boost their revenue share in the long run. For instance, in December 2024, Rocket Lab, a publicly traded aerospace company, announced the launch of a private Earth-observing radar satellite to the planet’s orbit. The launch marked the start of the "Owl the Way Up" mission which involves the deployment of Strix satellites developed by Synspective, a Japanese space enterprise. On the other hand, in December 2024, Pratt & Whitney, an American aerospace manufacturing business, released a press statement reporting that it had received FAA certification for using a GTF engine to power the Airbus A321XLR model. GTF engine is known for its high fuel efficiency and low carbon emissions, which makes it an ideal solution in modern aircraft.

Similarly, in December 2024, Joby Aviation, a US aircraft manufacturing company, reported that it had completed several static tests, including the study of the structural integrity of its electric air taxi’s tail components. The press release stated that these tests will help the enterprise gain certification approval from the Federal Aviation Administration (FAA). In the same month, Boom Supersonic, a supersonic passenger airplane developer, conducted the ninth test flight of its XB-1 technology, reaching a new top speed of 0.87 Mach. The company has declared its aim of crossing the 1 Mach barrier in 2025. Moreover, NASA, a US federal space agency, issued a press release highlighting that its Parker Solar Probe broke the record for speed at 430,000 mph and closest approach to the Sun (6.1 million kilometers).

A brief overview and analysis of the aerospace industry

The growth of the aerospace industry, in the fourth quarter of 2024, was primarily due to the increasing consumer preference for air travel. The growing disposable income of people in developed and developing countries across the globe led to a surge in air passenger traffic. At the same time, the substantial decrease in aircraft ticket fares improved the growth rate of the commercial aerospace market. Along with this, technological advancements in aircraft engines played an important role in the growth of the industry. Many companies were engaged in R&D activities to design fuel-efficient engines and innovative machines such as turbofan propulsion systems. In addition, the rising investments in aviation infrastructure from public and private enterprises contributed to the expansion of the industry in Q4 2024.

As per a study done by the International Air Transport Association, the global airline industry has made substantial gains in the last few years. In 2023, the landscape had a net profit of $27.4 billion with a 3% margin. In 2024, its profit increased to $30.5 billion with a 3.1% margin. The same survey highlighted that the total number of air passengers rose to 4.96 billion passengers globally. This helped the industry gather a total revenue of $996 billion, out of which passenger revenue was valued at $744 billion. As per many industry experts, despite facing challenges in the COVID-19 pandemic period due to lockdowns and travel restrictions, the global airline industry made a stunning comeback. The increasing focus on supply chain resilience and logistics was the main reason behind the revival of this market. While certain challenges persist, the industry is anticipated to flourish in the coming period.

On the other hand, Rokestan, a Turkish defense contractor, in October 2024, announced the expansion of its product portfolio by launching three new laser-guided solutions. Designed to improve the accuracy and precision of conventional missile systems, these products are developed to seek and neutralize ground targets. The launch is expected to help Rokestan to establish itself as the leader of the precision guided munitions industry. Along with this, developing countries such as India have consistently increased their budgetary defense spending over the last few years. The investments in R&D activities and procurement of advanced defense technologies by the Indian Government accelerated the sector’s growth and success in Q4 2024.

Winding up

The growth of the aerospace and defense sector in the fourth quarter of 2024 is attributed to increasing investments by leading companies in the domain. In addition, despite certain supply chain challenges, the sector increased its revenue share in 2024 due to the increasing focus on the integration of advanced technologies and innovations. Furthermore, the growing expanse of the landscape in the Asia-Pacific region is predicted to create favorable conditions for the growth of the aerospace industry in the coming period.

For more insights on the latest developments, technological advancements, and upcoming trends in the aerospace and defense sector, feel free to contact our esteemed analysts here!