Aerospace and Defense Propulsion System Market Report 2026

The aerospace and defense propulsion system market size has grown strongly in recent years. It will grow from $285.45 billion in 2025 to $304.6 billion in 2026 at a compound annual growth rate (CAGR) of 6.7%. The growth in the historic period can be attributed to advancements in turbojet and turboshaft engine technologies, growth in military and commercial aviation fleets, development of electric propulsion prototypes for aerospace applications, government funding and defense contracts driving propulsion r&d, expansion of maintenance and overhaul services for propulsion systems.

The aerospace and defense propulsion system market size is expected to see strong growth in the next few years. It will grow to $394.14 billion in 2030 at a compound annual growth rate (CAGR) of 6.7%. The growth in the forecast period can be attributed to rising demand for fuel-efficient and low-emission propulsion systems, growth in electric and hybrid propulsion adoption for aircraft and spacecraft, advancements in high-thrust engines for next-generation defense vehicles, increasing investment in space propulsion technologies, integration of ai and predictive maintenance for propulsion system optimization. Major trends in the forecast period include advancement in next-generation hypersonic propulsion, increased adoption of reusable propulsion systems for cost efficiency, growth in electric and hybrid propulsion solutions for space and uav platforms, modernization of defense fleets driving propulsion upgrades, rising focus on lightweight materials and thermal efficiency improvement.

The expansion of commercial air travel is expected to drive the growth of the aerospace and defense propulsion system market. Commercial air travel involves transporting passengers or cargo for a fee, typically operated by airline companies. This sector is growing due to economic expansion, which increases disposable income and enables more people to afford business and leisure flights. The growth of commercial air travel, in turn, fuels demand for efficient and sustainable propulsion systems in both aerospace and defense. Airlines’ focus on expanding capacity while reducing emissions accelerates the development of advanced, eco-friendly propulsion technologies. For example, in March 2025, according to the Bureau of Transportation Statistics, a US-based government agency, US airlines transported 926 million passengers in 2024, representing a 5.2% increase from 881 million in 2023. Therefore, the expansion of commercial air travel is a key driver of growth in the aerospace and defense propulsion system market.

Major companies in the aerospace and defense propulsion system market are focusing on developing advanced products, such as high-voltage power distribution components, to support the electrification of next-generation aircraft and defense platforms. High-voltage power distribution components manage and regulate electrical power within aircraft or spacecraft, ensuring safe and efficient operation while protecting sensitive systems in electric propulsion platforms. For instance, in October 2024, Collins Aerospace, a US-based aerospace technology provider, completed prototype development of a solid-state power controller and power distribution panel for the Clean Aviation SWITCH project. These megawatt-class components, produced in Germany, are designed to safely manage the high-voltage electricity required for hybrid-electric aircraft propulsion systems, supporting the SWITCH project’s goal of significantly reducing CO₂ emissions in short- to medium-range aircraft through advanced hybrid-electric technologies.

In January 2025, MBDA Systems, a France-based missile manufacturer, acquired a 50% stake in Roxel for an undisclosed amount. The acquisition aims to strengthen MBDA’s control over its propulsion supply chain, accelerate innovation in solid propulsion technologies, and optimize industrial cycles to meet the increasing global demand for tactical missile systems. Roxel is a France-based manufacturer specializing in solid propulsion systems for tactical and cruise missiles.

Major companies operating in the aerospace and defense propulsion system market are Lockheed Martin Corporation, Airbus SE, General Electric Company, Northrop Grumman Corporation, Honeywell International Inc., Pratt & Whitney, Safran S.A., L3Harris Technologies Inc., IHI Corporation, SpaceX, MTU Aero Engines AG, Moog Inc., Blue Origin LLC, ArianeGroup, ITP Aero, Rocket Lab USA Inc., Ursa Major Technologies Inc., Dawn Aerospace, Astra Space Inc., HyImpulse Technologies GmbH, BluShift Aerospace Inc.

North America was the largest region in the aerospace and defense propulsion system market in 2025. The regions covered in the aerospace and defense propulsion system market report are Asia-Pacific, South East Asia, Western Europe, Eastern Europe, North America, South America, Middle East, Africa.

Note that the outlook for this market is being affected by rapid changes in trade relations and tariffs globally. The report will be updated prior to delivery to reflect the latest status, including revised forecasts and quantified impact analysis. The report’s Recommendations and Conclusions sections will be updated to give strategies for entities dealing with the fast-moving international environment.

Tariffs on aerospace-grade metals, electronic components, and propulsion manufacturing equipment are increasing production costs and supply chain delays for aerospace and defense propulsion systems. The impact is most significant in major manufacturing regions such as North America, Europe, and Asia-Pacific, particularly affecting rocket propulsion and advanced turbine engine segments. Defense procurement programs face cost escalations, while domestic production incentives and localization policies provide some positive opportunities for regional manufacturers. Companies are diversifying sourcing and exploring tariff-free trade corridors to mitigate disruptions.

The aerospace and defense propulsion system market research report is one of a series of new reports that provides aerospace and defense propulsion system market statistics, including the aerospace and defense propulsion system industry global market size, regional shares, competitors with the aerospace and defense propulsion system market share, detailed aerospace and defense propulsion system market segments, market trends, opportunities, and any further data you may need to thrive in the aerospace and defense propulsion system industry. This aerospace and defense propulsion system market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenarios of the industry.

An aerospace and defense propulsion system refers to the collection of technologies, machinery, and components designed to generate thrust, allowing aircraft, spacecraft, missiles, and other defense vehicles to move through air or space. These systems are essential for achieving lift-off, sustained flight, maneuverability, and overall mission success in both civilian and military settings.

The primary types of aerospace and defense propulsion systems are air-breathing and non-air-breathing. Air-breathing propulsion systems rely on atmospheric oxygen for combustion, making them highly efficient for high-speed aircraft and missiles operating at various speeds and altitudes. These systems are used in a variety of applications, including missiles, aircraft, spacecraft, and unmanned aerial vehicles (UAVs), serving end-users such as commercial entities, government agencies, and the military.

The countries covered in the aerospace and defense propulsion system market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Taiwan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

The aerospace and defense propulsion system market consists of sales of turboshaft engines, electric propulsion systems, and turbojet engines. Values in this market are ‘factory gate’ values, that is, the value of goods sold by the manufacturers or creators of the goods, whether to other entities (including downstream manufacturers, wholesalers, distributors, and retailers) or directly to end customers. The value of goods in this market includes related services sold by the creators of the goods.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

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