Global Next-Generation Fighter Aircraft & Upgrade Programs Market Size, Share, Trends and Forecasts 2031

Key Findings

• The market centers on advanced fighter aircraft procurement and modernization programs that enhance air superiority, strike, survivability, and multi-domain interoperability.

• Rising geopolitical tensions and contested-airspace doctrines are accelerating fleet recapitalization timelines across major air forces.

• Upgrade programs for legacy 4th and 4.5th generation platforms remain essential to bridge capability gaps until next-generation fleets reach scale.

• AESA radars, advanced EW suites, and sensor-fusion mission computers are the most common upgrade priorities due to immediate operational impact.

• Low-observable materials, signature management retrofits, and IRST adoption are increasing as peer threats improve detection and counter-stealth tactics.

• Open architecture avionics and modular payload standards are gaining preference to reduce vendor lock-in and speed future capability insertion.

• MRO ecosystems and depot-level sustainment modernization are becoming decisive differentiators in selection and long-term cost evaluation.

• International co-development, offsets, and licensed production are expanding, particularly where sovereignty, supply security, and local industrialization are strategic goals.

Next-Generation Fighter Aircraft & Upgrade Programs Market Size and Forecast

The global next-generation fighter aircraft & upgrade programs market was valued at USD 62.4 billion in 2024 and is projected to reach USD 103.8 billion by 2031, growing at a CAGR of 7.5%. Growth is supported by concurrent demand for new stealth-capable platforms and deep modernization of legacy fleets, especially in radar, EW, and weapons integration.

Multi-year procurement lots, sustainment digitization, and expanding regional security partnerships are reinforcing predictable spend profiles. The upgrade segment remains resilient as air forces seek capability parity without full fleet replacement.

Market Overview

Next-generation fighter aircraft programs emphasize survivability in dense IADS environments, multi-sensor fusion, secure datalinks, and high-end electronic attack/defense. In parallel, upgrade programs extend the operational relevance of existing fleets through AESA radars, next-gen EW, mission computers, cockpit modernization, structural life-extension, and weapons integration.

Market demand is shaped by threat evolution, availability of pilot training infrastructure, supply-chain resilience for propulsion and avionics, and the pace of certification for new weapons and software baselines. Procurement decisions increasingly weigh lifecycle sustainment, digital engineering maturity, and upgrade roadmaps rather than unit price alone.

Future Outlook

Through 2031, modernization will remain a dominant spend category as air forces prioritize rapid, software-driven capability insertion and networked combat performance. Next-generation acquisitions will expand gradually due to production ramp constraints, pilot conversion pipelines, and the complexity of low-observable sustainment.

The most competitive OEM and integrator strategies will combine open-mission systems, scalable computing, and upgrade-compatible designs that reduce future integration friction. Loyal-wingman concepts, advanced datalinks, and AI-assisted sensor management will shift value toward mission systems and onboard/edge processing. Countries will also intensify domestic MRO and component production to reduce dependency risks and improve fleet availability during crises.

Next-Generation Fighter Aircraft & Upgrade Programs Market Trends

• Software-Defined Avionics And Open Mission Systems
  Open architectures are increasingly specified so avionics, sensors, and weapons can be upgraded without full redesign cycles.Air forces prefer modular computing and standard interfaces to shorten certification timelines for new capabilities.Vendors are adopting containerized software approaches and continuous integration pipelines for faster baseline releases.This trend shifts value from airframe hardware to mission systems, middleware, and secure data management.Open systems also support multi-national interoperability by enabling common waveforms, message sets, and mission apps.As a result, upgrade programs are moving toward recurring “block” increments rather than infrequent major mid-life updates.

• Acceleration Of AESA, EW, And IRST Modernization Packages
  AESA radars are becoming the default upgrade due to detection range, multi-target tracking, and electronic attack potential.EW suites are expanding to include digital receivers, advanced jamming techniques, and geo-location of emitters.IRST adoption is rising to provide passive targeting and resilience against emission-control constraints.The combined “sensor triad” improves survivability and lethality without requiring a new aircraft purchase.Integration complexity is driving demand for proven mission computers and high-speed data buses.Many operators are bundling these upgrades with cockpit displays and helmet-mounted cueing to maximize engagement tempo.

• Stealth Sustainment And Signature Management As A Competitive Differentiator
  Low-observable performance is increasingly evaluated on maintainability and sortie-generation, not only peak RCS metrics.Operators are investing in improved coatings, repair processes, and environmental controls for LO maintenance workflows.Signature management retrofits—such as inlet treatments and edge alignment refinements—are being explored for select fleets.Infrared and acoustic signature reduction measures are receiving more attention as counter-stealth sensing improves.OEMs are promoting digital twins and condition-based maintenance to reduce LO-related downtime.This trend elevates sustainment tooling, training, and materials supply assurance as core program decision factors.

• Weapons And Network Upgrades For Multi-Domain Interoperability
  Fighters are increasingly integrated into kill-web architectures via advanced datalinks and gateway solutions.Upgrade programs prioritize secure communications, multi-level security, and resilient SATCOM alternatives where relevant.Weapons integration is expanding for long-range AAMs, standoff strike, anti-ship, and hypersonic-adjacent payload pathways.Mission systems must support rapid reprogramming for EW and threat libraries to remain effective in contested theaters.Interoperability testing is becoming more rigorous, increasing demand for systems integration expertise and labs.Consequently, avionics upgrade roadmaps are aligning tightly with national C4ISR modernization and joint fires doctrines.

• Shift Toward Human-Machine Teaming And Loyal Wingman Concepts
  Next-generation roadmaps increasingly include cooperative engagement with uncrewed adjuncts for sensing and weapons carriage.Fighters require enhanced datalinks, onboard processing, and decision aids to manage multiple collaborative assets.Upgrade programs for legacy platforms are adding bandwidth, mission computing, and display improvements to support teaming.This pushes demand for secure autonomy interfaces, mission planning tools, and deconfliction algorithms.Air forces also emphasize resilience against jamming and cyber compromise in manned-unmanned coordination.Over time, the trend is expected to reshape procurement toward families of systems rather than single-platform purchases.

Market Growth Drivers

• Escalating Threat Environments And Air Superiority Requirements
  Peer and near-peer modernization is forcing air forces to prioritize survivability in contested airspace.Integrated air defense systems are driving demand for stealth, EW dominance, and longer-range weapons employment.Rapidly evolving threats make capability refresh cycles shorter than traditional aircraft replacement timelines.Modernization programs provide quicker operational uplift compared to waiting for full next-generation fleet delivery.This dynamic sustains parallel investment in new procurement and deep upgrades of existing fleets.As regional flashpoints intensify, governments are more willing to fund multi-year procurement and retrofit packages.

• Fleet Aging And The Need To Extend Platform Service Life
  Many 4th generation fleets face structural fatigue, obsolescence, and diminishing parts availability.Service-life extension programs combine structural refurbishment with avionics modernization to restore readiness.Operators prefer upgrades when airframe hours remain viable but mission systems lag contemporary requirements.Life-extension reduces near-term capital spikes and spreads modernization across manageable budget cycles.This driver is especially strong where pilot training pipelines and base infrastructure are optimized for existing types.As a result, upgrade demand remains steady even when next-generation acquisitions are planned but delayed.

• Mission Systems Value Growth Versus Airframe-Only Differentiation
  Combat effectiveness increasingly depends on sensor fusion, EW, networking, and computing rather than pure kinematics.Upgrades that improve detection-to-decision timelines deliver high ROI in both training and operational contexts.Digital backbones enable faster weapons integration and reduce recurring integration costs over time.Air forces are funding mission computer refreshes to support new algorithms and larger sensor data flows.This shifts procurement evaluation toward software roadmaps, open standards compliance, and cyber resilience.Consequently, integrators with proven avionics and system-of-systems expertise are gaining larger program share.

• Industrial Policy, Sovereignty, And Supply Security Priorities
  Governments increasingly tie fighter procurement to domestic industrial participation and technology transfer objectives.Licensed production, depot activation, and local component manufacturing reduce geopolitical supply-chain risk.Upgrade programs often include domestic MRO enablement, creating local jobs and long-term sustainment autonomy.Sovereignty needs also drive interest in national mission data, EW reprogramming, and indigenous weapons integration.These priorities encourage partnerships and co-development models rather than purely off-the-shelf procurement.Over time, industrial policy is shaping both program selection and the structure of upgrade packages.

Challenges in the Market

• Long Development Cycles And Production Ramp Constraints
  Next-generation fighters require complex testing, certification, and supply-chain scaling that can extend timelines.Engine availability, advanced materials, and avionics lead-times can delay delivery schedules and raise costs.Production ramp issues often create capability gaps that must be covered by costly interim upgrades.Delays also increase concurrency risks where early blocks require rework to meet later baselines.Customers may face schedule volatility that complicates force planning and training pipeline management.This challenge makes flexible upgrade pathways and phased fielding strategies critical to sustaining readiness.

• Integration Complexity Across Sensors, EW, Weapons, And Networks
  Modern upgrades involve tightly coupled subsystems where changes in one area can impact aircraft performance and safety.Integrating new radars and EW suites can require power, cooling, and structural modifications beyond initial estimates.Weapons integration demands extensive flight testing and software verification to ensure safe separation and guidance.Network upgrades introduce cyber-hardening requirements and interoperability validation across joint and coalition assets.Legacy fleets may have limited growth margins in power and cooling, restricting the size of modernization packages.As complexity rises, program risk increases unless digital engineering and robust integration labs are used effectively.

• Lifecycle Cost Pressure And Sustainment Readiness Requirements
  Fighter programs are increasingly judged on availability rates and long-term operating cost, not just acquisition.Low-observable sustainment, specialized tooling, and training can be expensive and resource-intensive to scale.Spare parts constraints and single-source components can create readiness bottlenecks during surge operations.Budget holders demand predictable sustainment profiles, pushing OEMs toward performance-based logistics models.Upgrade programs must balance capability additions with maintainability to avoid reducing sortie generation.If sustainment planning is weak, even high-performance aircraft can underdeliver operational value over the lifecycle.

• Export Controls, Technology Transfer Limits, And Political Sensitivities
  Advanced sensors, EW, propulsion, and stealth-related technologies are often constrained by export regulations.Restrictions can limit configuration options, delay approvals, or require downgraded variants that affect competitiveness.Technology transfer negotiations can be prolonged, impacting program timelines and local industrial expectations.Political shifts may alter procurement priorities, partnership structures, or funding continuity mid-program.Coalition interoperability requirements can conflict with sovereignty demands for indigenous weapons and data control.These factors can create uncertainty and complicate long-term upgrade roadmaps for both OEMs and customers.

Next-Generation Fighter Aircraft & Upgrade Programs Market Segmentation

By Program Type

• New Next-Generation Fighter Procurement

• Mid-Life Upgrade Programs

• Service Life Extension Programs (SLEP)

• Avionics And Mission Systems Modernization

By Capability Upgrade Focus

• AESA Radar Upgrades

• Electronic Warfare And Self-Protection Suites

• IRST And Passive Sensing

• Mission Computers And Sensor Fusion

• Cockpit And HMI Modernization

• Weapons And Datalink Integration

By Platform Generation

• Legacy 4th Generation Fighters

• 4.5 Generation Fighters

• 5th Generation Fighters

• Emerging 6th Generation Programs

By End User

• Air Forces

• Naval Aviation

• Joint And Multi-National Commands

• Test, Training, And Aggressor Units

By Region

• North America

• Europe

• Asia-Pacific

• Latin America

• Middle East & Africa

Leading Key Players

• Lockheed Martin

• Boeing Defense, Space & Security

• Northrop Grumman

• RTX (Raytheon Technologies)

• BAE Systems

• Airbus Defence and Space

• Dassault Aviation

• Saab AB

• Leonardo S.p.A.

• Thales Group

• Honeywell Aerospace

• GE Aerospace

• Rolls-Royce

• Safran

Recent Developments

• Lockheed Martin advanced new avionics and mission software baselines aimed at improving multi-domain interoperability and upgrade cadence.

• BAE Systems expanded electronic warfare and mission systems integration offerings tailored for legacy fighter modernization packages.

• RTX (Raytheon Technologies) progressed AESA radar and self-protection enhancements designed for higher detection performance and resilient operation under jamming.

• Dassault Aviation strengthened modernization roadmaps emphasizing sensor fusion, connectivity, and weapons integration flexibility for export and domestic fleets.

• Saab AB expanded upgrade-led propositions focused on open architecture avionics and rapid capability insertion for cost-efficient fleet enhancement.

This Market Report Will Answer the Following Questions

• What is the current global demand split between new next-generation fighter procurement and legacy fleet modernization?

• Which upgrade categories (AESA, EW, IRST, mission computing, weapons integration) are seeing the highest funding priority?

• How are open mission systems and software-defined avionics changing competitive positioning among OEMs and integrators?

• What are the most common schedule and cost risk drivers in next-generation fighter development and production ramp phases?

• How do lifecycle sustainment models and availability targets influence program selection and contract structures?

• Which regions are expected to accelerate procurement versus relying more heavily on upgrades through 2031?

• How do export controls and technology transfer constraints impact addressable markets and configuration strategies?

• What role will manned-unmanned teaming and loyal wingman concepts play in shaping upgrade requirements and new buys?