Investments in Aircraft Parts Manufacturing Soar On Rising Demand

Researched by Industrial Info Resources (Sugar Land, Texas)--The rising demand for air travel, mainly driven by growing consumer incomes and expanding economies, has led to a robust demand for aircraft worldwide. According to the Aerospace Industries Association (AIA), the total air passenger traffic in 2024 (measured in revenue passenger kilometers (RPKs)) went up by 10.4% in comparison to 2023. With flyer volumes escalating rapidly, the demand for aircraft is expected to climb, giving way to significant investments aimed at aircraft parts manufacturing.

Amid the ongoing wave of energy transition and efforts to reduce the carbon footprint, there has been a strong shift toward lightweight and fuel-efficient airplanes. Thus, old fleet maintenance and replacements are advancing, with airlines upgrading to new aircraft models and parts. Additionally, the demand for military aircraft is also growing due to increased defense budgets. Countries like the U.S., Russia, China and India, which maintain vast military aircraft fleets, have also been acquiring new warplanes. Hence, manufacturers are ramping up production to meet surging demand, using new technologies such as computer aided design/manufacturing (CAD/CAM) software and 3D printing to enhance manufacturing processes.

Industrial Info tracking 243 active capital-spending projects worth more than US$25 billion geared toward manufacturing of aircraft parts globally.

With a total pipeline of more US$11 billion across 78 projects, Asia drives the majority spend. It is followed by North America with a spending of more US$8 billion across 106 projects. The European region also attracts an investment of around US$5 billion.

By country, China is the biggest driver of investment, with an investment outlay of more than US$10 billion. It is followed by the U.S. with a spend of US$7 billion across 83 projects and the United Kingdom with over US$2 billion. Other countries with substantial spending include Mexico, Canada and Spain.

With an aggregate investment of more than US$14 billion, Hua'an Shengyuan (Sichuan, China) Enterprise Management Company Limited (Deyang, China), The Boeing Company (NYSE:BA) (Arlington, Virginia), Commercial Aircraft Corporation Of China Limited (Pudong, China) and Tata Motors Limited (Mumbai, India) are the leading players in the market. They collectively hold a total market share of 56%.

About 47% of the investment is aimed at grassroot projects, while 35% is geared toward plant expansions. Around 36% of the spending is in the engineering stages, 34% is in the planning phase and 30% is already under construction. Most of these projects are expected to be completed by December this year, while the rest are anticipated to reach fruition by March 2033.

Subscribers to Industrial Info's Global Market Intelligence (GMI) Industrial Manufacturing Project Database can click here for a full list of projects.

Despite this growth, the industry faces challenges like supply-chain disruptions leading to shortages, lack of skilled laborers, geopolitical tensions and technical issues. However, diversification and local sourcing, training programs and technical advancements like artificial intelligence, advanced air mobility (AAM) and unmanned systems are likely to ease the burden and transform industry dynamics.

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).