Defence Notes

$111 billion being spent globally on transport and tanker aircraft over next decade

1st November 2019 - 09:33 GMT | by Ilker Aktaşoğlu in London


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The global market for tactical airlift, strategic transports and tanker aircraft is expected to reach $111 billion over the next ten years, according to new research by Defence Insight.

With a number of large programmes in full-rate production the Military Aircraft Market Report and Forecast projects spending to be broadly flat between 2019 to 2023, only to drop afterwards. 

The key driver behind this is the conclusion of V-22 programme, procurement of which will begin to wind down from 2023 in advance of completion in 2026 unless Boeing is able to find another export customer for the platform.

Another factor at work is the extraordinary longevity of modern transport aircraft, typified by the C-130J. Lockheed Martin’s workhorse is baselined for a thirty-year service life, but with upgrades and service life extensions it can remain operational for considerably longer. 

The USAF, for example, expects its C-130J fleet – first introduced in 1999 - to last until 2056. Once in service, these aircraft don’t need to be replaced for a long time.

The US is the largest market with cumulative spending of $48.9 billion over the forecast period across the KC-46A, V-22, C/KC-130J and VC-25B (Air Force One) programmes. The KC-46A programme itself has an awarded value of $15 billion, with potentially another $13 billion for follow-on aircraft from 2025.

A new entrant to the market is Embraer’s KC-390, which has entered service with Brazil and found success with Portugal, but faces stiff competition from Leonardo’s C-27J and Airbus C-295 as well the C-130J and A400M.

In Europe there are long-standing projects to upgrade transport and refuelling capabilities through the A400M and A330 MRTT projects, but the C-130 is also in use with a number of countries. These projects are expected to see final deliveries in the 2020s and move into sustainment and upgrade. 

There are as-yet unawarded programmes in Poland and Hungary, with both expected to be fiercely competed.

In terms of future opportunities, Canada’s Strategic Tanker Transport Capability programme, which aims to replace the country’s existing fleet of CC-150 Polaris aircraft is one of the most significant.

The programme has a maximum value of $3.7 billion and will replace the existing fleet capability, including strategic airlift, air-to-air refuelling, aeromedical evacuations and strategic Government of Canada transport. The definition phase is expected to start by 2022 with deliveries planned between 2028 and 2031.

Canada also has a need for a new aircraft to replace its current fleet of CC-138 Twin Otters, although it is an order of magnitude smaller, with an estimated maximum cost of $379 million. These aircraft will be expected to be able to conduct utility airlift operations, maintenance and training in the country’s northern region.

In Asia Pacific, Indonesia has a requirement for a large transport aircraft to replace order variants of the C-130 which are reaching the end of their service lives. 

The A400M was initially thought to be the front runner and the Indonesian House of Representatives greenlighted the acquisition proposal in mid-January 2017. 

However, no contract has emerged and it appears the process has stalled. In October 2019 it was reported that the government of Indonesia had discussed acquisition of C-130J aircraft with US, suggesting that the competition was still open.

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