As the aerospace and defence (A&D) industry continues to recover, 2022 looks set to bring new innovations, new markets, and new growth opportunities.
Trends in commercial air travel and customer orders have exceeded post-pandemic expectations, partly thanks to the global distribution of vaccines. Demand for small and medium-sized aircraft is expected to keep recovering in 2022, with narrow-body aircraft manufacturers doing particularly well, and a potentially strong recovery for aftermarket revenues.
Innovation in both technologies and business models, together with increasing M&A activity, should further accelerate the move towards greater digital and operational efficiency. A&D firms with a focus on innovation will be better prepared for the coming year.
Seven key A&D trends to watch out for in 2022
1.Digital thread and smart factory
The digital thread is an imaginary thread connecting everything across a product’s life cycle, from design to production, and collecting live feedback on the way. A&D companies are expected to use digital thread and smart factories innovatively to gain component and critical material supply visibility to boost production efficiency and get designs to delivery faster.
2.Aftermarket
Companies will be looking to boost pandemic-hit aftermarket revenues by cutting costs and time to resolution and managing risks. We’ll see more companies offering digital customer service and using digital technology for predictive maintenance.
3.Advanced military capabilities
In a rapidly changing defence landscape, many contractors still have record backlogs left over from the pandemic. Focus on improving capabilities in fighter aircraft, battleships, space resilience and cybersecurity could help to get production moving and boost revenue growth.
4.Space market
Developments in launch, satellite, and new technology could increase the growth of space-based services, from space tourism to next-gen satellite telecoms and satellite data capture.
5.Advanced air mobility (AAM)
AAM, which covers innovations like electric vertical takeoff and landing (eVTOL) aircraft, is becoming mainstream as investment grows and many organisations move out of the research and development stage to testing and piloting prototypes.
6.Decarbonisation
Every industry is cutting carbon, but 2022 could see A&D companies make commitments to decarbonise not only their operations but also their products. Investing in innovative forms of propulsion as well as finding efficiencies will be key.
7.Mergers and acquisitions (M&A)
Strong M&A activity is expected to continue in 2022, with innovation, technological transformation, and regulatory and geopolitical shifts creating a robust environment for deals in every segment of the industry.