Next-Gen Military Avionics Market Size - By Type, By Platform, By Point of Sale, By Fit, Forecast, 2025 - 2034

Next-Gen Military Avionics Market Size

The global next-gen military avionics market size was valued at USD 36.4 billion in 2024 and is estimated to grow at CAGR of 4.8% to reach USD 57.6 billion by 2034. Rising innovation in sensor technology coupled with increasing defense modernization budget is the major factor responsible for growth of the market during the forecast period.
 

The tariffs placed on steel, aluminium, electronics, and aerospace components by the Trump administration affected the military avionics market. These tariffs increased the prices of inputs, increasing overall spending for OEMs, and tier 1 suppliers. In the short term, this will cause a decline in profit margins, procurement delays, driving the need to renegotiate supply contracts especially for programs with worldwide sourcing dependencies.
 

On the other hand, the tariffs did drive a strategic shift towards domestic sourcing and localization of the supply chain which decreases geopolitical dependency and strengthens the supply chain in the long run. Although the impact will be damaging at first, many in the industry can take advantage of the shifts to rethink their procurement and manufacturing processes, and in doing so, responding to regulation challenges to improve operational efficiency.
 

In order to modernize their military capabilities because of growing geopolitical tensions and regional conflicts countries worldwide are increasing their defense budgets. As an example, global military expenditure is expected to grow by 7.4% and reach USD 2.4 trillion in 2024, up from USD 2.2 trillion in 2023. This increase in funding helps to support extensive research, development, and procurement of modern avionics systems.
 

Military forces are transitioning from legacy systems to next-generation systems that provide better interoperability and readiness for combat. The investment cycle in modernization of defense technologies not only stimulates technological improvements but also strengthens the market for advanced avionics systems specifically tailored for modern warfare needs.
 

The adoption of new unmanned systems in military applications greatly enhances the marketing prospects for advanced military avionics. For instance, according to GMI analysis the global military drone market was valued at USD 14.6 billion in 2023 and is estimated to grow at a CAGR of 13.5% from 2024 to 2032. These platforms require the integration of advanced systems with other peripherals that ensure accurate control, strong communications, reliable navigation, and precise tracking even in hostile or goal-oriented tumultuous conditions.
 

The implementation of smarter and more sophisticated unmanned systems has shifted the focus of reliance on advanced avionics strands towards these technologies, due to the high levels of automation and less required human involvement. This constantly changing scenario does not only improve operational efficiencies but also creates enormous opportunities for the development of new markets and specialized uncrewed and autonomous avionics systems.
 

Modern military operations are increasingly based on network-centric warfare (NCW), where the sharing and analysis of data in real-time across different platforms and command centers are crucial. Next-gen avionics systems serve as critical nodes in these integrated networks by facilitating robust communication, sensor fusion, and data sharing. Enhanced data links and connectivity solutions improve decision-making processes on the battlefield, ensuring that personnel have access to comprehensive, real-time insights. This shift towards interconnected platforms spurs demand for avionics that are designed to be fully interoperable with both current and future communication infrastructures.
 

The aerospace and defense sectors are witnessing a steady stream of innovations in sensor technologies, data processing, artificial intelligence, and automation. These advancements enable the creation of sophisticated avionics systems with improved performance, reliability, and capabilities. Modern military aircraft are increasingly equipped with integrated sensor suites that offer real-time situational awareness and precise navigation data, significantly boosting operational effectiveness. This technology evolution pushes the demand for avionics that can seamlessly process large volumes of data and support complex mission profiles, thereby driving market growth.
 

To maintain a competitive edge, manufacturers should invest in open architecture, modular avionics platforms that seamlessly integrate advanced sensor suites, AI driven analytics, and secure communications. Forge strategic partnerships with defense agencies and prime contractors to co create tailored solutions and secure early design wins.
 

Next-Gen Military Avionics Market Trends

• The incorporation of AI and machine learning into avionics systems is revolutionizing military operations by enabling real-time data processing and decision-making in complex environments. For instance, according to GMI analysis the global AI & analytics in military & defense market was valued at USD 10.4 billion in 2024 and is estimated to grow at a CAGR of 13.4% from 2025 to 2034. Advanced algorithms are being used for threat detection, navigation, and predictive maintenance, which enhance operational reliability and combat effectiveness.
   
• AI-driven avionics provide superior situational awareness by fusing data from multiple sensors and platforms, reducing reaction time during critical missions. This trend is pushing the development of adaptive systems that can learn from operational data, continuously evolving and optimizing performance in the field. Recent advancements also include the application of deep learning techniques to improve object recognition and tracking, making these systems more robust against both conventional and unconventional threats.
   
• As modern military operations become more digitized, the security of avionics systems against cyber threats has become a paramount concern. Current trends involve the integration of advanced cybersecurity protocols directly into the system architecture to defend against increasingly sophisticated electronic warfare tactics. For instance, according to GMI analysis the global defense cybersecurity market was valued at USD 38.8 billion in 2024 and is estimated to grow at a CAGR of 9.8% from 2025 to 2034.
   
• New developments include robust encryption, intrusion detection systems, and real-time anomaly detection mechanisms that are capable of identifying and neutralizing cyber threats as they occur. Furthermore, the emerging concept of cyber-resilience is prompting the design of avionics systems that can maintain functionality even under cyber assault, thereby ensuring mission continuity. This proactive approach to cybersecurity is essential to protect critical communication and control channels from disruptions and exploitation by adversaries.
   
• ?New sensor technologies and the evolution of multisensor fusion are key trends in modern military avionics. Next-generation systems are integrating data from various sources, such as infrared, radar, and electro-optical sensors, to create a coherent picture of the operational environment. This fusion of sensor data not only enhances detection and tracking capabilities but also improves targeting accuracy and threat identification in real time.
   
• Innovations in miniaturization and power efficiency are enabling the deployment of compact, high-performance sensors in a wider range of platforms, including unmanned systems. As these technologies mature, we see further integration of LIDAR, hyperspectral imaging, and advanced electronic warfare sensors, all contributing to a more secure and versatile battlefield environment.
   

Next-Gen Military Avionics Market Analysis

Based on type, the next-gen military avionics market is divided into flight control system, communication system, navigation system, monitoring system, and others.
 

• The flight control system market held the largest share of 30.4% in the year 2024 and is expected to continue its domination till the forecast period. The growth of the flight control system segment in next-gen military avionics is primarily driven by the increasing demand for enhanced aircraft maneuverability, automation, and mission adaptability in modern combat scenarios.
   
• As military aircraft are expected to operate in complex environments with higher precision and reduced pilot workload, advanced flight control systems particularly fly-by-wire and fly-by-light technologies are gaining traction. These systems enable more responsive and agile flight characteristics while improving overall aircraft safety and performance.
   
• The navigation system market is growing at significant rate and is expected to reach market size of USD 16.4 billion in 2034. This segment is witnessing robust growth due to the increasing emphasis on precision targeting, situational awareness, and GPS-denied navigation capabilities in modern military operations. The rise of electronic warfare and anti-access/area denial (A2/AD) strategies has led to heightened demand for resilient navigation solutions that can operate effectively in contested and jammed environments. Innovations such as inertial navigation systems (INS), satellite-aided navigation, and multi-sensor data fusion are being increasingly incorporated to provide accurate and uninterrupted positioning data.
   

Based on platform, the next-gen military avionics market is segmented into fixed-wings, rotary wings, and unmanned aerial vehicles (UAVs).
 

• The fixed-wings segment held the largest market share and was valued at USD 23.1 billion in 2024. The Fixed-Wings platform segment is experiencing significant growth due to ongoing modernization programs across global air forces aimed at upgrading legacy aircraft with advanced avionics suites. Fixed-wing aircraft, such as fighter jets, bombers, and transport aircraft, play a pivotal role in defense operations, requiring cutting-edge avionics for mission-critical capabilities like threat detection, electronic warfare, real-time data processing, and communication interoperability.
   
• The demand for next-gen avionics is further fuelled by the development and procurement of 5th and 6th generation fighter jets, which rely heavily on integrated sensor fusion, advanced cockpit displays, and artificial intelligence for enhanced situational awareness and decision-making.
   
• The unmanned aerial vehicles (UAVs) segment is anticipated to reach at a market size of USD 6.3 billion in 2034. The Unmanned Aerial Vehicles (UAVs) segment is growing rapidly, driven by the increasing deployment of drones in reconnaissance, surveillance, target acquisition, and strike missions. As modern militaries shift toward unmanned and semi-autonomous platforms to reduce pilot risk and extend mission endurance, there is a surging need for sophisticated avionics systems in UAVs.
   
• These systems include autonomous navigation, advanced flight control, real-time video/data transmission, and AI-powered decision-making tools that enable UAVs to perform complex missions independently. The miniaturization of avionics components, combined with improvements in power efficiency and sensor integration, is making it possible to equip even small UAVs with high-performance capabilities.
   

Based on point of sales, the next-gen military avionics market is divided into OEM and aftermarkets.
 

• The OEM segment held the largest market share of 88.1% in 2024. The OEM segment is witnessing strong growth driven by the continuous production and induction of next-generation military aircraft and UAVs across global defense forces. With rising defense budgets and increasing focus on fleet modernization, nations are investing in new platforms equipped with state-of-the-art avionics from the outset.
   
• OEMs are integrating advanced systems such as AI-based flight control, sensor fusion, advanced mission computers, and digital cockpits directly into new aircraft to meet the evolving requirements of modern warfare. Moreover, the development of next-gen stealth fighters, loyal wingman UAVs, and electronic warfare aircraft is creating fresh demand for high-performance, fully integrated avionics solutions.
   
• The aftermarkets segment is growing at a decent pace and is expected to reach market size of USD 5.4 billion in 2034. The aftermarket segment is gaining momentum due to the ongoing need for upgrades, retrofitting, and maintenance of existing military aircraft fleets. With many countries opting to extend the service life of their current platforms instead of full replacements, there's a growing demand for avionics modernization kits that enhance mission capability, interoperability, and survivability. Upgrades may include new radar systems, digital displays, secure communications, and navigation systems capable of operating in GPS-denied environments.
   

Based on fit, the next-gen military avionics market is divided into commercial aviation and military & defense.
 

• The retrofit was valued at USD 11.6 billion in 2024. The retro?fit segment is propelled by the imperative to extend the service life and enhance the capabilities of existing aircraft fleets without the cost and lead?time of new platform procurements. As legacy systems age, defense operators seek avionics upgrade kits encompassing modern flight controls, digital cockpits, and secure communications that can be integrated into current airframes.
   
• The line-fit segment is anticipated to reach market size of USD 38.2 billion in 2034. This segment benefits from growing procurement of new manned and unmanned platforms designed from the outset with next?gen avionics architecture. Embedding modular, software?defined systems during initial assembly ensures seamless sensor fusion, cybersecurity hardening, and network?centric connectivity are baked into the platform lifecycle. Line?fit deliveries also streamline certification and reduce integration risk, as avionics harmonize with airframe specifications and mission systems from day one.
   

• The U.S. next-gen military avionics market dominated in the North America region and is expected to reach market size of USD 1.9 billion in 2034. The market for next-gen military avionics in the U.S. is driven by a strong emphasis on maintaining technological superiority in air combat and multi-domain operations. There is a continuous need to upgrade and replace legacy systems with more agile, integrated, and secure avionics capable of operating in increasingly complex environments.
   
• The push for enhanced situational awareness, interoperability, and rapid data processing supports the adoption of cutting-edge avionics technologies. Additionally, a strong domestic industrial base and focus on innovation further accelerate development and deployment.
   
• The Germany next-gen military avionics market was valued at USD 119.3 million in 2024. In Germany, the growth of next-gen military avionics is fuelled by the need for modernized systems that can operate in coordination with allied forces. The focus is on improving platform efficiency, communication, and mission adaptability. Demand is also driven by the need to replace outdated technologies with more automated, digitized, and secure systems that support both manned and unmanned operations. Efforts to strengthen defense readiness and support multinational missions further contribute to the market’s momentum.
   
• The China next-gen military avionics market is growing at the highest CAGR of 8.9% for the forecast period in Asia-Pacific region. China’s market is expanding due to its drive for self-reliance and rapid modernization of military capabilities. The focus is on developing advanced avionics that enable greater autonomy, real-time data analysis, and resilience against electronic threats. Growing emphasis on intelligence gathering, electronic warfare, and long-range operations has created a strong demand for sophisticated and multi-functional avionics systems. Additionally, a fast-paced innovation environment is accelerating domestic development and deployment.
   
• The India next-gen military avionics market is growing at a significant rate and is expected to reach a market size of USD 210.7 million in 2034. In India, the demand for next-gen military avionics is driven by a growing need to enhance defense preparedness and reduce dependency on foreign systems. Efforts to modernize existing aircraft and develop new platforms are creating opportunities for integrating advanced, modular, and adaptable avionics systems. The desire for improved surveillance, secure communications, and combat readiness in challenging terrains and diverse environments also plays a key role in driving market growth.
   
• The Japan next-gen military avionics market is growing at decent pace and was valued at USD 130.1 million in 2024. Japan’s next-gen avionics market is shaped by the need to improve response capabilities, situational awareness, and communication security in a rapidly evolving regional security landscape. The push for highly integrated, cyber-resilient, and future-ready systems is fuelling demand. Japan’s strong focus on technological refinement and precision engineering also supports the development of advanced avionics, with particular attention to safety, reliability, and interoperability with allied forces.
   

Next-Gen Military Avionics Market Share

The next-gen military avionics industry is highly competitive, with players vying on the basis of rapid technology innovation, system integration prowess, and the ability to secure long-term contracts. Northrop Grumman Corporation, L3Harris Technologies, Thales, Collins Aerospace, and BAE Systems are the top 5 companies accounting for 60%-65% of the market share. The Key players are differentiating on the basis of development of open architecture, software defined platforms that support AI enabled sensor fusion and network centric connectivity, as well as the agility to tailor solutions for both manned and unmanned applications.

Moreover, companies are forging collaborative partnerships across the defense ecosystem. For instance, in 2024 In 2024 U.S. Naval Air Systems announced their contract with Northrop Grumman Corporation to avionics upgrades to their aircraft. Under this agreement Northrop Grumman Corporation will provide software and hardware upgrades to E-2D mission computers and displays for demonstrating manned and unmanned teaming (MUM-T) capability.
 

Similarly, in 2025 In 2024 L3Harris Technologies announce a landmark agreement with Air India to become lead supplier of the state-of-the-art SRVIVR25 Voice and Data Recorders for the airline’s B737-8 fleet. Under this agreement one hundred aircraft will be equipped with L3Harris' cutting-edge technology.
 

Next-Gen Military Avionics Market Companies

Some of the eminent market participants operating in the next-gen military avionics industry include:

• Northrop Grumman Corporation
• L3Harris Technologies
• Thales
• Collins Aerospace
• BAE Systems
   

Next-Gen Military Avionics Industry News:

• In December 2024, Collins Aerospace, an RTX business, announced a comprehensive avionics upgrade and modernization program for Beechcraft King Air and Hawker aircraft, spanning Collins' Pro Line Fusion and Pro Line 21 advanced avionics systems.
   
• In Janauary 2025, Lockheed Martin has been awarded a USD 270 million contract by the U.S. Air Force to integrate next-generation infrared defensive sensors on the F-22 Raptor. The system, known as the Infrared Defensive System (IRDS), features TacIRST sensors that enhance both survivability and lethality for the aircraft. This distributed set of embedded sensors is designed to provide advanced infrared capabilities, ensuring the F-22 remains effective against evolving threats.
   

The next-gen military avionics market research report includes an in-depth coverage of the industry with estimates and forecast in terms of revenue in USD Million from 2021 - 2034 for the following segments:

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Market, By Type

• Flight control system
• Communication system
• Navigation system
• Monitoring system
• Others

Market, By Platform

• Fixed-wings
  • Narrow body
  • Wide -body
• Rotary wings
• Unmanned aerial vehicles (UAVs)

Market, By Point of Sale

• OEM
• Aftermarkets

Market, By Fit

• Retrofit
• Line-fit

The above information is provided for the following regions and countries:

• North America 
  • U.S.
  • Canada
• Europe 
  • Germany
  • UK
  • France
  • Spain
  • Italy
  • Netherlands
• Asia Pacific 
  • China
  • India
  • Australia
  • South Korea
  • Japan
• Latin America 
  • Brazil
  • Mexico
  • Argentina
• Middle East and Africa 
  • Saudi Arabia
  • U.A.E
  • South Africa