With increasing need for persistent surveillance across various conflict zones, the governments of numerous nations worldwide are shifting towards high altitude platforms that offer wider coverage area with minimal costs. High altitude platforms (HAPs) are airborne systems operating in the high altitude category of more than 50,000 feet above the Earth’s surface.
Due to persistent surveillance capability coupled with low cost, the aerostat systems have become popular for various applications across the defense sector. Aerostat systems are tethered airborne platforms designed to delivered persistent services such as communication, surveillance, electronic intelligence gathering and others.
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Global Aerospace & Defense Market Analysis
The worldwide aerospace & defense market sector is worth 172 billion dollars as per the reports provided by the society of production engineers. The market sector includes the production of defense commodities that comprise of weaponry, information systems and watercraft. It is highly focused industry which sells primarily to the government authorities who need goods for defense purpose or spacecraft for federal space programs.
The demand for aerospace & defense sector is stimulated by defense budgets, aerospace traffic and likelihood of international warfare. The primary success aspects for firms in this sector are intelligent pricing of long term contracts and strong technical proficiency & know how. Firms remain competitive by forming associations with partners and keeping prices low. Firms involved in business aerospace & defense should partner with governments to remain compliant regarding rules.
Key Market Sections
The global market for ISR (airborne intelligence, surveillance and reconnaissance) was valued at about 17.6 billion dollars in year 2011 as per reports from a reputed market research firm. ISR is important for defense activities and cut downs affect defense finances in many nations though few areas spend greater on defense. In spite of budgetary controls, ISR still gets funding from government.
The worldwide military rotorcraft industry is estimated to display annual growth of more than 4% by end of year 2021 as per the reports provided by an reputed market research firm. The industry includes attack & rescue operations, maritime helicopters and reconnaissance observations among others. The strong growth and development of the industry can be attributed partially to the upgrading of US fleets and European Union fleets following the pseudo wars in countries like Afghanistan and Iraq.
RSTA(Reconnaissance, surveillance and target acquisition) systems are essential for all land based defense functions. Global government expenditure on RSTA was more than 3.340 billion dollars in year 2011 as per the reports provided by a reputed market research agency. Extensively used RSTA device comprises of surveillance sensors, night vision goggles and counter fire radar systems.
The worldwide industry for UAV(unmanned aerial vehicles) was evaluated about 3 billion dollars in year 2011 as per the reports provided by a reputed market research firm. The UAV industry comprises of array of items like weaponry, intelligence sensors, infrared, detection sensors and lasers. Unmanned aerial systems have also witnessed vital industry expansion during current years as governments seek out to achieve the best device to optimize their defense systems. Firms functioning in this industrial sector are increasing their spending on research and development activities like research & development work on ground control stations and data links.
Geographical Market Share
The defense industry of India had observed a fast growth and expansion with about 14 billion dollar of the nation's administrative finances spent on acquisition of hardware and defense technology. As per the reports provided by a reputed market research agency, the defense expenditure of India was forecasted to expand at more than 6.5% per year in the five year span culminating at end of year 2015 after touching the total revenue margin of 42.5 billion dollars. during that year.
Factors stimulating the growth of the defense industry in India includes a perceived risk from neighbors, requirement to upgrade outdated defense technology & hardware and regional unrest. As the industry looks set for continuous expansion, original defense device manufacturers are attracted towards India from all across the globe. Also local private firms are also involved in production of equipments in order to fulfill the demand of the defense equipments.
Owing to high material prices of specialized materials and strong technical innovation required in the aerospace & defense sector, producers are required to reduce the prices, enhance output and apply just in time production strategy for their products. Today, the market is becoming more competitive on the global front. It is being affected by economic aspects due to which governments cut spending on defense, defense supplies and defense materials. Mergers and acquisitions is the best choice for firms who want to gain competitive advantage as well as market benefit. Forming associations or partnerships can help the firms increase the momentum of the delivery of new innovative items while reducing the price of ownership.
The global legislation relating to arms and defense materials is a main aspect for aerospace & defense sector. This legislation is obliged to conform to the government norms. The aerospace & defense industry is highly cost sensitive, particularly in relation to airlines which are reluctant to adapt to an unsteady international economic conditions of the market.
Defense firms are compelled to respect fixed costs contracts with respective governments and thus satisfy & secure long term contracts from these governments as these governments look for budget deficit for defense and reduction in defense costs of defense materials and supplies.
The aerospace & defense industry is the biggest consumer of biofuel and seeks to produce items without disturbing the ecological balance. This market sector also requires to lead in terms of technological breakthroughs, inventions, technical innovations and specialized expertise. Manufacturing time is a very vital aspect and the original device producers could face extended expenditures when backlogs run into extra manufacturing time. The market sector is predicted to expand at a rate ranging between five percent and six percent during the next few decades.