Production. Production. Production.
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Disruption is here to stay – tariffs only add an extra dimension to the already complex supply chain. |
Aerospace demand has never been stronger, with record backlogs of jetliners and defense spending on the rise to adapt to new military doctrines and geopolitical threats. Jetliners ordered today won't arrive until well into the 2030s without a reset of the aircraft production and overhaul ecosystem. Warfighters can't wait a decade or more for exquisite systems to tackle the threats in the air, land, sea, and increasingly, space. Delivery timelines and readiness must keep pace. Factory floors and the aftermarket have become a strategic battleground to support production ramp-ups across the commercial and defense sectors. AlixPartners' 2025 Aerospace & Defense Outlook addresses the challenges facing the industry value chain. Delivery delays are reshaping the profitability of the commercial aerospace industry while the defense sector grapples with its largest overhaul since the end of the Cold War. Intertwined aerospace supply chains exacerbate the material and labor shortages, geopolitical shifts, and policy changes that are taxing industry leadership. Engine makers, aircraft lessors, and maintenance shops are the gatekeepers of capacity on the commercial side. They rely on the same ecosystem of small suppliers that an infusion of public and private capital is counting on to reshape defense procurement. Production, agility, and quality have never been so important. Executives are under pressure to deliver, speed up development, and improve effectiveness while boosting productivity and affordability. AlixPartners is supporting the reset. Operating models are already being reshaped with efforts to improve efficiency through more resilient supply chains and technology, including software-enabled weapons and satellite manufacturing as well as new sustainment models. |
$33 billion |
13.5 years |
$40 billion |
| Commercial aerospace EBIT in 2024, dominated by engine makers and lessors |
Order backlog of narrowbody and widebody jets | Annual procurement boost from raising NATO defense budgets to 3% of GDP |
From the factory floor to the frontline
Explore how supply chain disruption, rising defense budgets, and breakthrough technologies are reshaping the aerospace and defense landscape. From production ramp-ups to sustainability setbacks, our latest report dives deep into the forces redefining the industry—and what it means for your strategy.
Request the full study and engage with the AlixPartners' team at the Paris Airshow
Key findings
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Demand Backlog to breakthrough |
Mastering the fundamentals to accelerate aerospace delivery Delivering on the commercial and military backlog remains industry's key priority. Vanishing vendors, component shortages, critical minerals, and the talent crunch all require innovative solutions. The path to higher production rates requires a complete focus on industry basics, including supply chain management and quality improvements, to ensure on-time delivery. |
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Geopolitics Strategic agility |
Navigating trade shifts and defense demands with speed and scale Pricing and procurement decisions are paramount as shifting trade policies affect cost and access to equipment, components, and MRO capacity. Agility has never been so important for anticipating and managing bottlenecks. Rearming Europe requires marrying higher budgets with homegrown development and production capacity. That will involve joint buys and alliances, with private capital providing a new path to marry affordability with speedier deployment. |
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Market conditions Reshaping readiness |
Evolving supply chains and strategies The delayed commercial ramp is pressuring supplier liquidity and creating new operating models. Procurement practices are being changed to mirror new defense strategies. Introducing affordable mass with thousands of air, land, and sea-based systems alongside a central role for space-based systems from Golden Dome to LEO proliferation and new ground infrastructure. |
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