Since 2008, the aerospace industry has experienced a slowdown in growth due to reduced global military spending. Aerospace companies that rely more heavily on defense contracts have seen revenues fall or flatten as defense departments and ministries of defense shift procurement activities away from defense contractors and toward technology companies.

However, the aerospace industry outlook for 2020 and beyond seems to be changing as increased global security threats force countries, including the United States, to upgrade their weapons and security platforms. Low oil prices and stable gross national product growth across the globe will continue to fuel commercial aerospace revenue, as aircraft manufacturers gear up for the production of next-generation aircraft.

Increased Defense Spending and Aerospace Companies

Worldwide defense spending is estimated to reach $1.9 trillion in 2020, an increase of about 4% over the previous year. The United States, China, and India are expected to be the countries driving the rise in defense spending. The United States Department of Defense is expected to spend $718 billion in 2020. All this has resulted in a jockeying of positions for the world’s top aerospace companies, as revenues are expected to surge in the coming years due to increased spending in both the military and commercial sectors. Below we review seven of the top aerospace companies in the world.

Key Takeaways

  • Growth in the aerospace industry looks promising in 2020 and beyond as worldwide defense spending is expected to increase.
  • Defense spending is expected to reach $1.9 trillion in 2020, spurred by spending from the United States, China, and India.
  • Seven of the top global aerospace companies include Boeing Co., Airbus Group SE, United Technologies Corporation, Lockheed Martin Corporation, Honeywell International Inc., General Dynamics Corporation, and BAE Systems Plc.

Boeing Co.

The Boeing Co. (NYSE: BA) generated $101.1 billion of revenue in 2018. The company reported what it called a "robust backlog" of $490 billion, which included about 5,900 commercial airplanes. With commercial and government customers in 150 countries, the Chicago-based company is one of the top manufacturers of commercial airliners and military aircraft.

It is also heavily involved in advanced technology solutions for defense, space, and national security. Its overall revenue was up 8% over the prior year. The company reported record operating cash flow of $15.3 billion.

Airbus Group SE

With $70.1 billion in revenue reported for 2018, Airbus Group SE (OTC: EADSY) is one of the largest aerospace and defense companies in the world. Based in the Netherlands, Airbus Group SE manufactures passenger aircraft, corporate jets, and cargo aircraft. For its military customers, the company makes military transport and special mission aircraft. Its 2018 revenue increased by 8% over the previous year, as did its earnings per share, which were up 29%. Profits were driven by increased production for the year. In 2018, the company delivered 800 commercial airplanes, up from the 718 delivered the previous year.

United Technologies Corporation

United Technologies Corporation (NYSE: UTX) generated $66.5 billion of revenue in 2018, driven by 8% organic growth. Through its Pratt & Whitney aerospace division, the company provides aircraft engines for the military and general aviation industry. It also provides repair and maintenance services. In 2018, Pratt & Whitney manufactured over 1,000 large military and commercial engines. The division also landed a $2 billion deal to build F135 engines for the Joint Strike Fighter program.

Lockheed Martin Corporation

At $53.7 billion in annual revenue in 2018, Lockheed Martin Corporation (NYSE: LMT) experienced 7.6% in revenue growth over the prior year. Lockheed Martin is one of the largest defense contractors in terms of revenue. In 2018, the company landed a $22.7 billion contract to build over 250 more F-35 aircraft for the U.S. Department of Defense. Its product portfolio includes military aircraft, vehicles, missiles, unmanned systems, radar systems, and guided weapons. The company expects strong demand in the coming years for its F-35 program and the C-130J Super Hercules, Lockheed's transport aircraft that has been purchased by 20 nations.

Honeywell International Inc.

Honeywell International Inc. (NYSE: HON) is a diversified manufacturer of commercial and consumer products, including avionics, engine systems, transportation systems, aircraft wheel and brake repair, environmental control systems, and radar and surveillance systems. Its annual revenue in 2018 was $41.8 billion, of which $2.8 billion came from defense business. Revenue was up 3.2% while its free cash flow came in at $5.6 billion.

General Dynamics Corporation

In 2018, General Dynamics Corporation (NYSE: GD) generated $36.2 billion annual revenue, a 16.9% increase over the 2017 results. Operating earnings grew to $4.46 billion, an increase of 5.2%. In addition to combat vehicles, shipbuilding, communication technology systems, weapons systems, and munitions, the company is a major player in business aviation. Revenue for their Aerospace segment was $8.4 billion or 23% of their total 2018 revenue. The Aerospace segment consists of their Gulfstream and Jet Aviation business units.

BAE Systems Plc.

BAE Systems Plc (BA.L) is a London-based manufacturer of naval ships, submarines, military aircraft, guided weapons systems, and space systems, with customers throughout the world. The company reported annual revenue of $21.7 billion in 2018, of which 91% was from defense contracts. The company employs 85,800 people worldwide. Their aerospace division accounted for 52% of their sales in 2018. The division has partnered with Lockheed Martin in the design and manufacture of sub-assemblies for the F-35 Lightning II combat aircraft.