Indian Defence Aviation: The global defence aviation world is changing, but not in a way that removes the old giants. A new study by Boston Consulting Group and Vertical Research Partners says the industry is moving toward smaller, cheaper and faster-built systems. Even so, traditional fighter jets and other high-end aircraft are still expected to stay at the center of military spending for many years.
The report says the big defence companies are still likely to keep most of the market because they already have the factories, the skills and the long ties with governments that these jobs need. In 2025, “exquisite” systems made about $65 billion in the US and Europe, while affordable mass systems brought in around $5 billion and expendable systems only about $55 million.
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Smaller systems growing faster
The study says the newer types of defence systems are growing much faster than the old ones.
- Exquisite systems are expected to grow only about 2% to 3% each year through 2033.
- Affordable mass systems are expected to grow by 15% to 20% each year.
- Expendable systems are projected to grow the fastest at 35% to 40% a year.
Even with that strong growth, the report says exquisite systems will still make up more than 80% of the market by 2033 because they start from a much bigger base. The report also points out that newer systems often bring less money after the first sale, while the older platforms keep earning money for years through support, repairs and upgrades.
Why Legacy Firms still make more Money?
The study uses the F/A-18E/F Super Hornet fighter and the AeroVironment Switchblade 300 as examples. It says exquisite platforms usually get about half of their lifetime profit from sustainment work like spare parts, maintenance and upgrades. The Super Hornet is one of the clearest examples, with more than $10 billion of profit from sustainment across a $20.3 billion lifetime program.
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By contrast expendable systems make almost all of their value at the start, when they are produced and sold. The report says this makes older defence programmes more stable when military spending goes up and down. It also explains that long supply chains help legacy firms stay strong. “What legacy primes retain, however, is decades of supply chain qualification, production experience, and familiarity with the compliance and certification requirements that government contracts demand,” it notes.
Higher risk for new defence players
The report says newer companies building affordable mass and expendable systems take on more risk. Unlike old-style defence programmes, where governments often pay much of the development cost, these newer firms often fund their own research and development using venture money or private capital. That means they can keep more control if the idea works, but they also carry a much bigger financial risk if it fails. The study concludes that the future battlefield will not be ruled by one side only.
It says “the battlefield solution will require both “traditional high-end platforms and affordable autonomous systems. They add that “winners will understand where long-duration aviation economics still dominate, where faster-cycle autonomy economics are emerging, and where profitable growth will ultimately accrue between the two.”
