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Airport Redevelopment Initiatives to Generate Demand for Advanced Air Traffic Control Equipment, says TMR

Posted on Aug 23, 2016

The moderately consolidated global air traffic control equipment market is dominated by Thales Group, BAE Systems plc, and Harris Corp. According to Transparency Market Research, the collective share of these three companies represented 45.6% of the global market in 2012. Other key players in the industry include Cobham plc, Indra Sistemas S.A., Northrop Grumman Corp., Lockheed Martin Corp., and Raytheon Company.

The global air traffic control equipment market’s annual revenue is expected to reach US$3.5 bn by the end of 2016 and further rise to US$4.1 bn by 2020. Going ahead, the industry is likely to be marked by rising collaboration activity, with partnerships with and acquisitions of regional players in emerging regions such as the Middle East and Latin America emerging as a conspicuous stratagem among the industry elite. New product development is also likely to be a major feature of the global air traffic control equipment market in the coming years. The cost-intensive nature of the air traffic control equipment industry means that backward integration from airlines and airport authorities is unlikely in the coming years. Distribution networks are also harder to access for new players, boosting the prospects of established industry giants. 

Increasing Air Travel Leads to Urgent Need for Airport Redevelopment

The prime driver creating the need for advanced air traffic control equipment is the rising air travel across the world. Business as well as leisure travel has grown rapidly in recent years due to the rising purchasing power of consumers in emerging countries. The smooth economic development of countries in Southeast Asia, the Middle East, and Latin America has also led to growing international trade, while the number of students emigrating to pursue higher education is also growing.

The combined effect of these factors on the global aviation sector has been conspicuous, with several governments backing airport redevelopments and new construction to handle the increasing load. While newly constructed airports naturally feature the latest air traffic control equipment, redevelopment efforts are often aimed at more than physical expansion, with many governments in the developed world supporting the incorporation of smart infrastructure and other technological advances in redeveloped airports.

High Costs of Advanced Air Traffic Control Equipment Restrict Adoption in Emerging Countries

The economic uncertainty in the aviation sector due to the increasing competition and fluctuating fuel prices has played a key role in holding back the global market for air traffic control equipment. The high costs of advanced air traffic control equipment have to be borne by airline passengers, as a result of the increased charges levied by the airport authorities on airlines. However, the intense competition in the aviation industry means that airlines are loath to increase their fares for fear of losing a significant share of passengers.

However, in developed countries and key cities in emerging regions, the installation of advanced air traffic control equipment has advanced relatively smoothly. The development and commercialization of satellite-based navigation equipment has thus emerged as a lucrative opportunity for leading players. The radar-based navigation systems currently used in the aviation sector have a high refresh time, which can cause confusion and increases the risk of mishaps. The much more accurate satellite-based air traffic control equipment is thus expected to replace radar-based equipment in the coming years.

Communication Equipment to Extend Dominance in Air Traffic Control Equipment Market 

There are three main types of air traffic control equipment, namely communication equipment, navigation equipment, and surveillance equipment. Communication equipment is likely to remain the leading revenue generator in the global air traffic control equipment market in the coming years, with the segment expected to generate annual revenue of US$1.3 bn by the end of 2016 and US$1.5 bn by the end of 2019.

Geographically, Asia Pacific is the most notable market for air traffic control equipment, as the regional segment is expected to overtake both North America and Europe over the period from 2013 to 2019 to emerge as the leading revenue generator in the air traffic control equipment market. The Asia Pacific air traffic control equipment market’s annual revenue is expected to reach US$1.4 bn by the end of 2019.

The information in this preview comes from a Transparency Market Research report titled ‘Air Traffic Control Equipment Market - Global Forecast, Market Share, Size, Growth and Industry Analysis, 2013 - 2019.’

The global air traffic control equipment market is segmented as follows:

Air Traffic Control Equipment Market, by type

  • Communication equipment
  • Navigation equipment
  • Surveillance equipment

Air Traffic Control Equipment Market, by end user

  • Commercial aircraft
  • Private aircraft
  • Military aircraft 

Air Traffic Control Equipment Market, by geography

  • North America
  • Europe
  • Asia Pacific
  • RoW

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