Aircraft Engine Market Assessment, By Engine Type, By Platform, Region, Opportunities and Forecast, 2018-2032F

Global aircraft engine market is projected to witness a CAGR of 5.83% during the forecast period 2025-2032, growing from USD 99.32 billion in 2024 to USD 156.28 billion in 2032F, owing to factors like fleet modernization, technological advancements, and increasing air travel demand. Manufacturers are investing heavily in research and development to produce more efficient and environmentally friendly engines. The market is also witnessing a trend towards the adoption of hybrid and electric propulsion systems, reflecting the industry's commitment to sustainability. Additionally, geopolitical factors and defense spending influence military aircraft engine procurement, contributing to market dynamics.

In June 2024, Rolls-Royce plc partnered with a consortium comprising five companies and research institutions to create the essential technologies for an innovative hydrogen combustion engine designed to power combined heat and power (CHP) systems efficiently. This initiative is part of the Phoenix (Performance Hydrogen Engine for Industrial and X) project, which was funded by the German Government.

Modernization Initiatives Comprising Fleet Expansion Fuels the Aircraft Engine Market

The global aircraft engine market is experiencing significant growth, driven by airlines' efforts to modernize fleets with more fuel-efficient and environmentally friendly aircraft. Manufacturers like Airbus are developing next-generation aircraft featuring innovative engine technologies, such as open-fan engines, to enhance fuel efficiency and reduce emissions. These advancements are crucial for meeting sustainability goals and addressing increasing air travel demand.

For instance, in May 2023, Pratt & Whitney Canada (RTX Corporation) announced its new PW545D engine. It is going to power the Cessna Citation Ascend, part of Textron Aviation's business jet family. The engine was developed and enhanced for Textron Aviation to provide better specific fuel consumption (SFC), increased thrust, and extended time between overhauls (TBO). This engine is equipped with a high-pressure compressor for enhanced flow, an improved single-stage, high-pressure turbine module, and an enhanced exhaust mixer for fuel efficiency and noise mitigation. Furthermore, the advanced exhaust mixer is likely to reduce fuel consumption and noise.

Engine manufacturers are focusing on developing advanced propulsion systems to improve fuel efficiency and reduce environmental impact. Innovations include open-fan engine designs and hybrid-electric propulsion systems, aiming to achieve significant reductions in fuel consumption and emissions. These technological advancements are essential for complying with stringent environmental regulations and meeting the industry's sustainability objectives.

Demand for Fuel-Efficient Aircraft Engines to Shape the Global Aircraft Engine Market

The increasing global demand for air travel necessitates the expansion of airline fleets, directly impacting the aircraft engine market. Airlines are increasing orders for fuel-efficient engines to meet growing passenger traffic, particularly in emerging markets like Asia-Pacific. This surge necessitates advanced engines to enhance performance, reduce emissions, and comply with environmental regulations. Additionally, the production rates of popular narrow-body aircraft, such as the Airbus A320 and Boeing 737, have risen to accommodate short-haul routes.

Additionally, airlines are investing in new aircraft equipped with advanced engines to accommodate passenger growth and enhance operational efficiency. This trend underscores the need for continuous innovation in engine technology to support the evolving demands of the aviation industry. Furthermore, governments and international bodies are imposing stricter environmental regulations on aircraft emissions, compelling engine manufacturers to innovate and produce engines that comply with these standards. This regulatory pressure is accelerating the development of next-generation engines with lower environmental impact. Hence, major companies are focusing on upgrading engine components like the rotor, body, and fan.

For instance, in April 2025, Rolls-Royce plc launched a single-aisle UltraFan demonstrator design. The ground tests for the demonstrator are planned for 2028, setting the stage for an engine capable of producing over 30,000 pounds of thrust, intended to power the next generation of aircraft succeeding the Airbus A320neo and Boeing 737. This new geared engine demonstrator is going to utilize advancements derived from the significantly larger 80,000-pound thrust UltraFan, which aims to compete in the lower thrust category alongside the Open Fan currently being developed by the CFM joint venture partners GE Aerospace and Safran Group.

Commercial Aircraft Segment Leads with Higher Demand

Based on the platform, the commercial aircraft segment dominates the global aircraft engine market due to its significant demand for fuel-efficient engines and technological advancements. Airlines prioritize modern engines that enhance operational efficiency, reduce emissions, and support sustainability goals. Narrow-body aircraft dominate this segment, driven by increasing domestic air travel and fleet modernization programs. Engine manufacturers focus on developing lightweight designs and advanced turbofan technologies to meet the growing need for longer-range, quieter, and cost-effective operations. The robust backlog of aircraft orders from global OEMs further strengthens the commercial segment's position in the market. Additionally, strategic collaborations between engine manufacturers and airlines ensure tailored solutions that align with evolving passenger demands and regulatory requirements. Major key players also support the industry in achieving environmentally friendly goals.

For instance, in January 2025, GE Aerospace (General Electric Company) announced that it is investing in new technology development for more efficient aircraft with assistance from the JobsOhio R&D grant of USD 9 million. This grant funding will enable GE Aerospace to invest in cutting-edge technology, enhancing its research and development operations while reinforcing its commitment and presence in Ohio.

North America Leads the Market with a Higher Defense Budget

Based on the region, North America leads the market with an increased defense budget and expenditure on aircraft engine dynamics. The United States Air Force is transforming its engine technology to drive advancements in the North American aircraft engine market. The Air Force aims to enhance fuel efficiency, reduce emissions, and improve operational performance by prioritizing next-generation propulsion systems, including hybrid and electric engines. Investments in sustainable aviation fuels (SAF) and advanced turbine technologies align with broader environmental goals while ensuring readiness for future combat scenarios.

For instance, in January 2025, the United States Air Force tripled its funding for a prototype sixth-gen fighter engine. This funding has increased more than threefold compared to the USD 975 million limit on the original contracts awarded in 2022. This contract award will facilitate the development of an advanced propulsion system featuring versatile architecture that can be customized for future combat aircraft engaged in diverse mission scenarios while also contributing to the digital transformation of the propulsion industrial sector. General Electric (GE Aerospace) and Pratt & Whitney Engines (RTX Corporation) have both been granted modifications to their original Next Generation Adaptive Propulsion (NGAP) contracts, increasing the maximum funding for the prototype to USD 3.5 billion for each engine.

The development of engines for cutting-edge platforms like the Future Attack Reconnaissance Aircraft (FARA) and heavy-lift helicopters reflects a focus on adaptability and mission-specific capabilities. Collaborations with leading manufacturers foster innovation and accelerate the deployment of advanced solutions.

Future Market Scenario (2025-2032F)

The market is likely to witness a shift towards hybrid-electric propulsion systems, enhancing fuel efficiency and reducing emissions.

Increased use of Sustainable Aviation Fuels (SAFs) based engine designs is anticipated to evolve, supporting environmental sustainability.

Utilization of lightweight, heat-resistant materials is expected to improve engine performance and durability.

Key Players Landscape and Outlook

Key players in the global aircraft engine market are focusing on innovation, sustainability, and strategic partnerships to maintain competitiveness. They emphasize the development of fuel-efficient and environmentally friendly engines to meet stringent emissions regulations and reduce operational costs. Advanced technologies, such as lightweight materials, hybrid-electric propulsion systems, and improved turbine designs, are being integrated to enhance engine performance and efficiency. Collaboration with governments and aircraft manufacturers supports the development of next-generation platforms, including electric and hydrogen-powered engines. Additionally, investments in research and development drive advancements in additive manufacturing and modular designs for faster production and maintenance.

For instance, in December 2024, Honeywell International Inc and Bombardier Inc signed a strategic agreement to collaborate on advanced next-gen technologies, including avionics, aircraft engines, and satellite communications. These technologies are intended to be installed in the existing and future bombardier aircraft.