Industry research
Aerospace Components
Scope
Europe
Companies
87
Table of contents
Report collaborator:
William Hamilton, Strategy Manager at KPMG Ireland, provided insights for this report. Read the interview transcript here.
Key takeaways
What is the scope of this industry report?
The European aerospace components market comprises businesses designing, developing and manufacturing parts, systems and subsystems for commercial, business, defence and space aircraft. Their offerings span the broader aircraft value chain, from structural components and cabin interiors to avionics, mechanical systems and standardised precision parts. As such, we segmented the European market into: (i) mixed, (ii) electronics & avionics, (iii) aerostructures, (iv) interiors & seats and (v) C-class parts.
What does the Aerospace Components industry look like in Europe?
The European aerospace components market exhibits a pyramid-like industry structure, characterised by a highly concentrated group of aircraft OEMs supported by a broad and fragmented multi-tier supplier base. While aircraft manufacturing is dominated by a small number of global OEMs across commercial aviation, helicopters and space transportation, the downstream supplier landscape comprises thousands of specialised businesses spanning Tier 1 to Tier 4. This fragmentation creates opportunities for consolidation, as strategic buyers and financial sponsors seek to acquire specialised suppliers to expand capabilities, build scale and strengthen supply-chain resilience. However, consolidation among lower-tier suppliers remains relatively limited, suggesting that significant acquisition opportunities persist (KPMG strategy interview).
What does the Aerospace Components market landscape look like in Europe?
Sponsor-led interest has been significant, with ~62% of identified assets being investor-backed (August 2026). Investors are primarily attracted to:
(i) long-term structural growth in commercial aviation from rising passenger traffic
(ii) defence budget increases and
(iii) recurring and resilient aftermarket services (e.g. repair and overhaul activities) propped by an ageing global fleet.
On the other hand:
(i) operational constraints from labour shortages and supply-chain bottlenecks
(ii) fleet expansion and renewal decisions postponed due to geopolitical uncertainties
(iii) increasing vertical integration by OEMs and Tier 1 suppliers serve as key deterrents for investors.
What are the key ESG considerations in the EU Aerospace Components industry?
ESG topics primarily relate to environmental and social challenges. Environmentally, the key focus areas include reducing aviation-related emissions, improving material efficiency and circularity and developing lightweight components that support more fuel-efficient aircraft. While decarbonisation remains an important industry objective, component suppliers are currently more exposed to emissions reporting requirements than to mandatory supplier decarbonisation targets. From a social perspective, the primary focus is on ensuring product safety and reliability through stringent quality management systems, comprehensive traceability and rigorous certification, qualification and inspection processes, which are essential to minimise the risk of unauthorised or non-conforming parts throughout the supply chain.
Company benchmarking
Market growth
Demand for new passenger and freighter aircraft is expected to reach ~42.1k new units over 2026-2045, supported by ~3.9% annual passenger-traffic growth during the period (Airbus, July 2026)
The global commercial-aircraft MRO market was valued at ~$136bn in 2025 and is expected to reach ~$193bn by 2030, growing at a +7.2% CAGR over the period (Oliver Wyman, February 2026)
Positive drivers
Rising passenger traffic, urbanisation and a growing global middle class prompt airlines to increase fleet capacity, driving long-term demand for original-equipment components across aircraft platforms (Airbus, July 2026; IATA, March 2026)
Rising military expenditure supports demand for defence-related components. Heightened geopolitical tensions lead to European governments increasing defence budgets, with accelerated fleet procurement and modernisation, while NATO members have committed to investing ~5% of GDP annually in defence by 2035 (KPMG strategy interview; SIPRI, April 2026; NATO, June 2025)
The ageing global commercial aircraft fleet (average age of ~13 years in 2025) contributes to recurring aftermarket sales. Combined with rising aircraft utilisation, as average flight hours increased by ~2% year-on-year, this converts into sustained demand for replacement parts, repairs, upgrades and maintenance services (KPMG strategy interview; Oliver Wyman, February 2026; Airbus, September 2025)
Negative drivers
Persistent skilled-labour shortages and wage inflation constrain aerospace production and margins. Increasing European defence expenditure is projected to require ~760k additional skilled workers, intensifying competition for qualified engineers, technicians, machinists and mechanics (IATA, June 2026; Reuters, May 2025)
Volatility in airline operating conditions weakens fleet-investment visibility. Jet-fuel shortages, price volatility and geopolitical disruptions affect airline profitability, thus delaying fleet expansion and renewal decisions, translating into lower component demand (IATA, June 2026; Cirium, April 2026)
Increasing vertical integration and insourcing among aircraft OEMs and Tier 1 suppliers. Aerospace groups bring selected manufacturing processes and strategically important components in-house to improve supply-chain control, quality and programme execution, reducing outsourced production volumes and the addressable market for independent component suppliers (Aviation Week, June 2026; Aviation Week, July 2024)
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