Aircraft Communication System Market Size By Product (SATCOM, HF, VHF, UHF, Data Link Communication), By Component (Antenna, Transponder, Receiver, Transmitter, Transceiver, Display & Processor), By Aircraft (Commercial Aircraft, Military Aircraft, Helicopters, Spacecraft), By Distribution Channel (OEM, Aftermarket) Industry Analysis Report, Regional Outlook (U.S., Canada, Germany, UK, France, Italy, Spain, Russia, Poland, Netherlands, Sweden, China, Japan, India, South Korea, Australia, Singapore, Brazil, Mexico, Argentina, Peru, Chile, Colombia, Venezuela, Saudi Arabia, Israel, Egypt, Turkey, Iran, Algeria, UAE, Syria, South Africa), Growth Potential, Price Trends, Competitive Market Share & Forecast, 2017 – 2024
Published Date: February 2018 | 450 Pages | Report ID: GMI2329 Report Format: PDF
Aircraft Communication System Market size was valued at over USD 815 million in 2016 and is projected to cross USD 1.3 billion in 2024.
U.S. Aircraft Communication System Market, By Product, 2016 & 2024, (Units)
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Rising demand for incorporation of next generation technologies in aircrafts along with expansion in defence sector across the globe is expected to primarily drive the aircraft communication system market over the forecast timeframe. Increasing aircraft deliveries due to rising air passenger traffic, especially in developing countries of Asia Pacific will further impact the industry positively. Growth in defence sector has resulted in increased demand for advanced fighter jets, inducing immense growth potential to the industry size till 2024.
Various countries have witnessed a substantial increase in their defence budget, escalating the revenue generation. For instance, in 2016, the defence budget of U.S. was over 604 billion, and is anticipated to increase considerably by the end of 2018. Similarly, in 2017, EU announced an increase in its defence budget as the 23-member states signed a commitment. The increasing defence budget will result in high production of military aircrafts, further propelling the aircraft communication system market growth over the coming years.
Signal congestions in satellite frequency bands is the key challenge for aircraft communication system market growth. Increasing usage of satellite communication along with rising number of satellites has caused increased signal congestion particularly for low frequency bands. Rising number of radio signal users in aviation industry leading to reduced radio spectrum availability issues may hamper the industry growth.
Manufacturers are focusing on reduction of overall overhead cost during the production. Increasing mergers & acquisitions in aircraft communication system market will significantly result in increasing productivity. Moreover, they are inclined towards improving the productivity of the plants to suffice the increasing demand. High profit margin owing to increasing orders of military aircraft & helicopter from emerging countries will result in increased penetration of advanced communication systems. Focus of industry players on growth opportunities from multiple countries including China, India, Japan, South Korea, UAE and Saudi Arabia will fuel the industry growth.
Aircraft Communication System Market, By Product
SATCOM is anticipated to capture highest revenue share crossing USD 480 million by 2024. Provision of superior communication along with efficient air traffic management will result in high growth of aircraft communication system market size from 2017 to 2024. In addition, SATCOM is highly being deployed in military aircrafts. Industry participants providing SATCOM are continuously gaining prominence due to rising demand from military sector for high-speed satellite communication links, fostering the industry penetration till 2024.
High frequency (HF) is likely to grow significantly, posing a CAGR of over 7.5% from 2017 to 2024. The substantial growth can be credited to regular technological advancements and adoption of digital communication procedures for aircraft management across the globe. These systems provide the aircrafts with effective communication means over long distance trans-polar and oceanic routes. Industry participants are focusing on developing advanced HF communication systems. For instance, global data communication has been made possible using high frequency data link (HFDL) ground stations. This will further impact the aircraft communication system market positively over the next eight years.
Aircraft Communication System Market, By Component
Transponders are expected to showcase dominance accounting for over USD 640 million over the forecast timeframe. Provision of exact information about the aircraft including barometric altitude and aircraft identification will fuel the aircraft communication system market size. Moreover, they maintain proper communication with the ATC system on ground. These benefits have led to their wide usage in commercial and military aircrafts, further inducing immense potential to the industry size till 2024.
Aircraft communication system market from receiver is projected to grow significantly, exhibiting over 6.5% CAGR till 2024. Tuning of the receiver for capturing exact signals and filtering of the undesired signals will primarily drive their demand. Manufacturers are focusing on reduction of overall component size and weight, providing stable growth prospects over the coming years. Factors such as superior signal capturing along with amplification of desired signals will further support the business demand.
Aircraft Communication System Market, By Aircraft
Military aircrafts will dominate the aircraft communication system market share accounting for over USD 580 million by the end of 2024. Rising adoption of satellite communication & other advanced technologies along with specific spectrum allocation for military applications will support the industry dominance. Moreover, increasing demand for fighter jets with multi-purpose capabilities including air attack and ground attack system will propel the industry demand. Rising defence budget of multiple countries across the globe will further strengthen the product penetration.
Commercial aircrafts will exhibit over 3.5% CAGR from 2017 to 2024 owing to substantial growth in aviation sector across the globe. Increasing air passenger traffic coupled with rising demand for advanced communication systems to ensure passenger safety & enhancing travel experience will drive the product demand. Signal interferences from conventional radio systems particularly in remote locations will instigate the demand for these advanced systems, propelling the aircraft communication system market growth over the forecast timeline.
Aircraft Communication System Market, By Distribution Channel
OEMs are anticipated to dominate the aircraft communication system market, capturing around 90% of the revenue share over the next eight years. Mandatory installation of the product for air traffic control and safety maintenance are among the key factors fuelling the industry growth. Industry participants are developing long term supply agreement with the aircraft OEMs for offering continuous supply, escalating the revenue generation till 2024.
Aftermarket will exhibit growth at around 7% from 2017 to 2024. This can be credited to frequent replacement of components such as transponders, receivers, etc. due to the regular technological advancements. Developments in the communication systems offering improved efficiency and light weight product will further fuel the industry demand. Moreover, rising need of installation of lighter, powerful and smaller devices enhancing the overall communication will support the growth of aircraft communication system market from aftermarket.
Aircraft Communication System Market, By Region
North America is likely to capture maximum industry share, accounting for over USD 500 million over the forecast timeframe. Presence of aerospace industry leaders across the region, including Boeing will primarily drive the industry growth. These manufacturers install advanced communication systems in their aircrafts. Prominent aircrafts using high potential aircraft communication systems include Boeing 737 Passenger, Airbus A318/319/320/321, Boeing (Douglas) MD-80, Boeing 757 (Passenger) and Boeing 777 Passenger. Rising defence budget of the countries including U.S. will further support the regional dominance.
Asia Pacific aircraft communication system market share is likely to exhibit over 6% CAGR from 2017 to 2024. Continuously increasing aircraft deliveries owing to rising air passenger traffic in emerging economies including India and China will positively impact the regional growth. Replacement of aged aircrafts with new fleet will result in incorporation of next generation technologies, thereby escalating aircraft communication system market growth by 2024. Europe will grow significantly owing to stringent regulations regarding passenger safety along with growing aerospace industry.
Competitive Market Share
Cobham Plc, Harris Corporation, UTC Aerospace Systems, Lockheed Martin, Iridium Communications Inc., L3 Technologies, and Raytheon are among the prominent participants in the aircraft communication system market. Other noticeable participants include General Dynamics, Thales, Northrop Grumman Corporation, Viasat Inc., and Honeywell Aerospace. Mergers & acquisitions is among the prominent strategy adopted by the participants to enhance their visibility globally. For instance, in May 2014, Cobham announced acquisition of Aero flex, New York based communication system manufacturer for USD 920 Million. This acquisition helped the company to expand its product line.
Similarly, in May 2015, Harris Corporation acquired Exiles Inc., a global aerospace and defence company to enhance its engineering & technology divisions. It helped the company to strengthen its customer base and gain competitive edge. New product development is another strategy adopted by aircraft communication system market players. For instance, in January 2017, Iridium Communication launched 10 new Iridium satellites in earth’s low orbit from SpaceX Falcon 9, helping the company to enhance its product portfolio.
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Aircraft communication system make use of analog voice signals and digital data to communicate among pilot, passengers, and crew members. They are also used to communicate among different aircrafts. Moreover, they are used to communicate between ground stations and aircrafts and vice versa. Increasing demand for safety and superior functions owing to constant development in the aircraft components and systems will drive the business growth.
Increasing global defence budget with shifting trend towards advanced aircraft system communication are the key factors fuelling the product demand. Development in the communication system with shifting trend towards replacement of the High Frequency (HF) and Very High Frequency (VHF) will positively drive the aircraft communication system market penetration. The conventional system is affected in the heavy airline traffic resulting in reduced efficiency. Superior regional coverage compared to the other systems is another factor significantly impacting the aircraft communication system market till 2024.
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