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Summer 2023 | M&A Report In The Aerospace, Defense & Government Industry Sector

By Jim Gerberman

September 07, 2023

The report below gives a good overview of the Summer 2023 M&A activity in the Aerospace, Defense & Government Industry Sector. The global aerospace & defense industry grew from $795.9 billion in 2022 to $855.6 billion in 2023 at a CAGR of 7.5% as reported by the Business Research Company. Positive free cash flow generation and financial flexibility are expected to off-set obstacles like reduced aircraft deliveries in 2023. The industry has improved fuel efficiency by around 39% from 2005 to 2019 to achieve decarbonized aviation with net-zero emissions by 2050, according to McKinsey analysis. Commercial aerospace revenues are projected to grow at 14% YoY in 2023, reaching pre-pandemic levels by 2024. Despite risks such as an economic slowdown, occurrence of a new COVID variant, elevated jet fuel prices and geopolitical tensions, the ongoing recovery in the aerospace sector is expected to drive a 21% YoY increase in Revenue per Kilometer (RPK) in 2023. The IATA forecasts a $5 billion airline profitability in 2023, reversing the $7 billion loss in 2022. Boeing predicts a global demand for 42,595 new commercial jets by 2042, valued at $8 trillion, with the Asia-Pacific markets stimulating over 40% of the demand. The defense segment is expected to outperform the commercial aerospace segment due to increased global defense budget allocation. US is expected to incur a defense expenditure of $876.9 billion in 2023, followed by China, Russia & India. One area of faster growth is with Directed Energy Weapons (DEW). According to Fortune Business Insights, the global DEW market is projected to grow from $9.2 billion in 2022 to $17.4 billion by 2029.

Posted by Jim Gerberman.

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