With much of the uncertainty and restrictions from 2020 now behind us, we are watching the aerospace and defense industries for an indication of post-COVID recovery. These industries saw some of the largest decreases over the last year during shutdowns as passenger traffic slowed substantially since travel (flight) restrictions were mandated. These shutdowns also spilled over into the commercial aerospace sector and reduced the need for aircraft and parts. 

It’s interesting to note that the year over year decrease in passengers was about 61%, while the decrease in the number of flights was only 42%.  It has been postulated that airlines have delayed discretionary maintenance and upgrades to conserve cash during the uncertain economy. However, the aerospace industry can only kick the can down the road for so long until these issues eventually resurface and demand attention.

The good news is that things are starting to look up. With the economy in recovery mode, experts say pre-COVID travel demands won’t ramp back up fully until at least 2024 but that more air travel is expected. 

The Business Research Company published a study that found the global aerospace market will reach almost $328B in 2021 which represents a compound annual growth rate (CAGR) of 10% and the commercial market is expected to see a 7% CAGR – reaching nearly $431B by 2025. 

According to another report from research firm Deloitte, the defense sector is one that is expected to remain stable in 2021. As most countries remain committed to sustaining their military capabilities, they have not significantly reduced their defense budgets. These factors contribute to this sector seeing only slight pain points ahead. There is little question that these will include certain delays and cost increases as the previously hobbled supply chain continues to recover.