Time ripe for niche avionics suppliers

The North American military avionics market earned revenue of $13.48 billion in 2011 and estimates this to decline to $13.31 billion in 2017, according to a new report.

Frost & Sullivan’s recent research report North American Military Avionics Market segments spending by type of aircraft and additional sub-segmentation is included by military service budget category and type of avionics.

“Past programmes often involved completely new aircraft and avionics designs,” said Frost & Sullivan industry manager Wayne Plucker. “The relatively small numbers of new aircraft models will limit the number of market participants able to play a role in the development and manufacture of those aircraft.”

It found that most of the new programmes rely on common airframes modified for specific missions.  Some of these airframes are commercial aircraft designs and use largely commercial avionics for flight avionics. However, the report suggests that integrated avionics will offer new opportunities for niche suppliers and that major component providers are becoming greater market forces.

Overall, the total number of suppliers in the avionics market has been declining due to mergers and acquisitions (M&A). However, these M&A have actually enhanced the competitive nature of the market. Aircraft OEMs have been more aggressively pursuing opportunities as avionics integrators, while component suppliers who often supplied stand-alone systems in the past are now providing integrated solutions.

“As a result of these market forces, Boeing and Lockheed Martin are accruing more direct avionics revenue, and Northrop Grumman and Raytheon are now major market participants,” said Plucker. “Aircraft programmes are becoming more international, resulting in increasing competition for roles in the few new aircraft programmes.”

Click here to view the North American Military Avionics Market video

Posted in Avionics, Military ATC, News

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