At the start of the year, single-aisle jetliners and fighter aircraft were the only two segments driving aircraft market growth. Every other industry segment was either flat or down. Unfortunately, the Boeing 737 MAX deliveries halt and production cut means single-aisles will not contribute to growth this year, despite the A320 and A220 output increases.

But fighters are still doing great and will keep the broader industry’s topline growing this year. Fighter deliveries in 2018 grew just 4% by value over 2017, but aircraft now on production lines look set to make 2019 a record year, with 24% growth over 2018. This year will be the best since 1992 (in 2019 dollars).

There are five primary reasons behind the fighter segment’s remarkable growth, which are not mutually exclusive:

Lockheed Martin’s F-35 is the single biggest market driver, with the long-awaited production ramp finally seeing results. Last year, deliveries jumped to 91 aircraft, from 66 in 2017 and 46 in 2016. In the first quarter of 2019, there were 26 deliveries, with full-year expectations of 130. We expect growth to continue through 2023, with a likely peak of 164 deliveries that year. The F-35 line will be capable of reaching 180 deliveries with currently planned facilities.

The second driver is high levels of defense spending, with associated levels of equipment utilization. In April, the Stockholm International Peace Research Institute (SIPRI) released its latest worldwide military spending data, which showed a 2.6% increase in 2018. This established a new record high level (since SIPRI’s data began in 1988) of $1.822 trillion. This growth fuels procurement of new military aircraft, and of course it reflects the higher utilization of the existing fleet in areas of conflict and tension. Higher utilization also drives replacement demand.

Aging fleets are the third driver. The average age of the world’s combat aircraft fleets ranges between 25 and 30 years. This problem is fairly evenly spread— there are no world regions where the average age is not at least 25 years. Couple this with high levels of utilization, and a simple set of choices emerge: Countries can either buy more jets, spend more on upgrades and life-extension programs, or they can rely less on air power. Again, there is nothing about world events that implies anyone will choose the third option.

Japan is a good illustration of this. Last year, the country increased its planned F-35 buy to 147 aircraft from 42. Yet it still does not have a plan to replace many of its 200 F-15s and 100 F-2s.

The fourth factor is double- (and even triple-) sourcing. Geopolitics plays a strong role in fighter purchase decisions—when a country buys a fighter, it also buys a strategic relationship. Increasingly, customer countries are seeking multiple such relationships, perhaps to hedge against the risk of arms cutoffs.

Thus, in recent years, Egypt has broken its three-decade streak of U.S. fighter reliance by sourcing Rafales from France and MiGs from Russia. Remarkably, tiny Qatar has become the first export fighter customer to order three twin-engine heavy models (F-15s, Typhoons and Rafales) at the same time.

Finally, emerging (and reemerging) producers are contributing to market growth. Fighter design and manufacturing sovereignty is coming back into vogue as an aspiration. South Korea will deliver KF-X prototypes in the next few years, Turkey is moving forward with its TF-X, Taiwan’s AIDC has resumed production of the Ching-Kuo fighter as a fast trainer variant, and Japan is considering a partly or completely indigenous F-3 for its next fighter buy.

These five factors, and other smaller ones, will continue to drive the fighter market upward through 2025 at least. We hope to see growth resume in the single-aisle market next year and in the twin-aisle segment and perhaps even the regional and business aircraft markets within a few years. But for the time being, it will be up to fighters to keep the aircraft industry out of red ink. 

Contributing columnist Richard Aboulafia is vice president of analysis at Teal Group. He is based in Washington.  

The views expressed are not necessarily those of Aviation Week.