Market Trends of north america military aviation Industry
Geopolitical threats are the main reason behind the increase in defense spending in the region
- In 2022, the US accounted for 39% of global defense spending military spending increased by USD 877 billion in 2022, or 0.7%. The total includes military assistance to Ukraine, estimated at USD 19.9 billion. In 2022, the US released the Department of the Air Force budget, which outlined that for FY 2023, the budget request is approximately USD 194.0 billion, a USD 20.2 billion or 11.7% increase from the FY 2022 request. This funding includes aircraft R&D, aircraft acquisition, initial spares, and aircraft support equipment. The funding for FY 2023 includes the purchase of 61 F-35, 24 F-15EX, 79 logistics and support aircraft, 119 rotary wing aircraft, and 12 UAV/UAS.
- Over the past few years, Canada also has demonstrated a commitment to increase defense spending to address growing security concerns and modernize its military equipment. The country recognizes the need to adapt to emerging threats, such as cyber warfare and asymmetric challenges, while maintaining conventional defense capabilities. Canada spent USD 26.9 billion on its military in 2022, which was 3.0 % higher than the previous year. Out of the total government spending, the country has allocated 1.2% of its share to the military. As per the Budget 2022, the announcement government will offer more than USD 8 billion for new funding to Canada's national defense over the next five years.
- In Mexico, the use of military forces to combat criminal activity remains the primary driver of military spending in the sub-region. Mexico's defense spending in 2022 was USD 8.5 billion, a decrease of 9.7% compared to 2021. Spending on the National Guard increased by 35% in 2021, accounting for 16% of total military spending. The country's defense expenditure was 0.6% of its GDP in 2022.
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Fleet modernization and the rising need for modernization of aircraft are the driving factors in North America
- As of December 2022, North America had an active fleet of 13,676 aircraft and helicopters. Competition in technology is accelerating between China and the United States as both countries are increasingly focused on the R&D of emerging technologies to prepare for future warfare. The United States has the biggest fleet of military aircraft in the region and globally, with a total of 13,300 operational fleets. A considerable chunk of this fleet is made up of combat helicopters (42%) and combat planes (21%). In contrast, training planes and helicopters account for 20%, while transport planes make up only 7%. Meanwhile, tankers and special mission aircraft each represent 5% of the fleet.
- By the end of 2022, Canada had an active fleet of about 356 aircraft and rotorcraft. Of these total 356 aircraft, the most procured fleet is training aircraft/helicopters, accounting for 132, followed by 120 combat helicopters, 63 combat aircraft, 28 transport aircraft, 27 special mission aircraft, and 6 tanker aircraft. Canada has selected F-35s to replace its CF-18 fighter jets, which are scheduled to retire by 2032. If the F-35 deal is finalized, Canada plans to start procuring the new jets in 2025. Mexico had an active fleet of 468 aircraft as of December 2022. Of these total 468 aircraft, the most procured fleet is training aircraft, and helicopters accounted for 203 aircraft, followed by 157 combat helicopters, 46 transport aircraft, 25 special mission aircraft, and 36 combat aircraft. As transnational criminal organizations and drug cartels largely occupy the country, the country utilizes military helicopters to fight drug traffickers.
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OTHER KEY INDUSTRY TRENDS COVERED IN THE REPORT
- Improving economic stability can aid in the growth of North America
