Key Sectors of Aerospace and Defense Industry

The aerospace and defense industry, as it has transformed itself during a short period of last century and based on the services it provides, can be classified into two key sectors, Civil Aviation and Military Aviation.

Civil Aviation Sector:

Civil aviation is one of two major categories of aerospace, representing all non-military aviation, both private and commercial. Civil aviation includes scheduled air transport, including all passenger and cargo flights operating on regularly scheduled routes; and general aviation (GA), including all other civil flights, private or commercial. Although scheduled air transport is larger in terms of passenger numbers, general aviation is larger in terms of the number of flights and flight hours.

Commercial aviation includes most or all flying done for hire, particularly scheduled service on airlines; and private aviation includes pilots flying for their own objectives like recreation, business meetings, etc. with or without receiving any remuneration. All scheduled air transport is commercial, but general aviation can be either commercial or private.

The global civil aerospace products manufacturing sector deals with all aspects of civil aviation. For example, companies in the civil sector manufacture complete civil aircraft, propulsion units, aerospace engines, and auxiliary equipment or parts. The key products and services in the civil aerospace sector include general, regional, and large aircraft, as well as aircraft engines and other parts.

Military Aviation Sector:

Military aviation is the use of aircraft and other flying machines for the purposes of conducting or enabling warfare, including national airlift (cargo) capacity to provide logistical supply to forces stationed in a unit or base or along a front. Airpower includes the national means of conducting such warfare including the intersection of transport and warcraft. The wide variety of military aircraft includes bombers, fighters, fighter bombers, transports, trainers, and reconnaissance aircraft.

The military sector is made up of companies that manufacture complete fighter, bomber, or military transport aircraft or missiles. They engage in the manufacture of aircraft including ground-attack aircraft, Attack helicopters, Bombers, Fighters, Multirole combat aircraft, Reconnaissance aircraft, and Military transport aircraft. Experimental aircraft are manufactured to test advanced aerodynamic, structural, avionic, or propulsion concepts. Other companies in this sector manufacture aerospace engines, propulsion units, missile guidance systems, or auxiliary parts. Prototypes of aerospace products are also developed in this sector, as are modifications to aircraft systems and complete aircraft overhauls.

In terms of global size, the aerospace and defense industry is currently estimated at around $800 billion USD. That number is increasing steadily each year. The military sector accounts for the largest portion of the market's value, ~70%.  The U.S. aerospace and defense industry is the largest in the world, comprising just over half of 53.9% of the total global revenues. The second and third largest markets are Europe and Canada, with Europe controlling a significant market share of 35.9% of total global revenues. Brazil and Japan represent a less significant percentage of world revenues with a combined 5.0% and 4.0%, respectively. Other countries and regions also have aerospace and defense-related employment, such as Mexico, Russia, China, Poland, Czech Republic, South Korea, and others. As we advance towards a more and more globalized world, the aerospace and defense industry plays a crucial role in global economies.