Aircraft Turbofan Engine Market Trends

Growth Drivers

• Rising commercial air passenger traffic and fleet utilization: Government air traffic data shows a sustained rebound and long term growth in passenger volumes, directly increasing the demand for the turbofan engine via higher utilization, stimulated maintenance cycles, and fleet renewal. The IATA report in August 2025 has indicated that the 116.9 million airline passenger enplanements in 2024 rose further, reflecting a return toward the demand levels. Higher traffic forces the airlines to maximize the aircraft availability, increasing the engine flight hours, shop visits and spare engine requirements. From the procurement standpoint, airlines respond by extending long-term engine service agreements and stimulating the replacement of older, fuel-inefficient aircraft. This trend is structurally important for turbofan OEMs, and MRO provides, as utilization-driven wear is non-discretionary.
• Government defense and military aviation spending: Rising defense budgets directly support the demand for the military turbofan engines used in transport surveillance and next-gen fighter aircraft. The U.S. Department of War in March 2023 depicts that the U.S. Department of Defense allocates the budget of USD 842 billion in 2024, with aviation propulsion listed as a core sustainment and modernization priority. The U.S. Air Force continues funding the engine upgrades and adaptive engine programs to improve the range, thrust, and fuel efficiency. Similar trends are visible in Asia and Europe, where the governments are expanding airlift and patrol capabilities. Unlike commercial aviation, defense-driven engine demand is less cyclical and contractually secured, offering stable long-term revenue visibility. For suppliers, defense programs provide multi-decade sustainment and overhaul contracts, often insulated from commercial downturns.

Department of Defense Spending in the U.S. (2022-2025)

Source: Comptroller April 2024

• Government supported research funding for advanced propulsion: Public R&D funding stimulates the commercialization of next-gen turbofan technologies. The NASA and the U.S. Department of Energy jointly support the propulsion research under the sustainable aviation propulsion improvements, which could reduce the aviation fuel use by billions of gallons over the coming decades, reinforcing the long term engine replacement demand. These programs lower the technical risk for OEMs and shorten the innovation cycles. For suppliers, the government-backed R&D creates early mover advantages and future procurement alignment with the public sector fleets. It also strengthens domestic supply chains and long-term aerospace manufacturing competitiveness.

Challenges

• Immense capital and R&D costs:  Developing a new turbofan engine requires a minimum investment and a decade-long development cycle. This high-risk barrier limits the entrants to only the largest, most captivated firms. For instance, leading companies have been investing heavily for more than two decades in their geared turbofan before achieving a return. This financial commitment is prohibitive for new players, as underscored by the aircraft turbofan engine market’s consolidation around three major OEMs. Financing in aerospace highlights that engine programs are the single largest R&D line item for major aerospace firms, consuming capital for years before the first sales.
• Complex long-cycle supply chain integration: The supply chain for turbofan engines is a global network of specialized tier 1 and tier 2 suppliers producing high-integrity components such as the single-crystal turbine blades. Entrants must secure and manage these relationships, which are often locked in by incumbents via long term contract. For example, a company in Germany has secured its role as a high-pressure turbine specialist for decades via deep partnerships.