The global Aerospace and Defense (A&D) sector is expanding at an unprecedented pace. With Airbus and Boeing forecasting the production of over 40,000 new commercial aircraft in the next two decades and global defense spending rising nearly 10% in 2024—its fastest growth in 40 years—the industry stands at a critical turning point.

“The sustained growth in the aviation sector and the rising demand for aviation-related services from regional and global companies have driven us to continue expanding our infrastructure,” said Grant McDonald, Global Sector Leader for Aerospace & Defense at KPMG International.

But while growth is strong, the industry faces rapid disruption. Geopolitical shifts, digital innovation, and new entrants are reshaping how companies build, operate, and compete. The year 2025 marks the start of a new era defined by adaptability, resilience, and technological agility.

1. Geopolitics: Navigating a Changing World

Rising tensions, shifting alliances, and new trade policies are redrawing global defense maps. A&D companies must build flexible strategies to manage risk while capturing opportunities in emerging markets.

2. Supply Chain Resilience

Following years of disruption, manufacturers are investing heavily in digital supply chain tools and predictive analytics to improve transparency and agility—vital in responding to shortages and geopolitical shocks.

3. Technology and Innovation

Dual-use technologies—spanning AI, quantum computing, and advanced materials—are now central to national defense and aerospace strategy. Accelerating R&D will be key to sustaining global leadership.

4. New Competition

Startups and private players with digital-first business models are challenging traditional aerospace giants. To stay ahead, legacy companies must modernize, automate, and form new tech-driven partnerships.

5. Mergers and Acquisitions

M&A activity is shifting from scale to value creation, with acquisitions focused on technology integration, sustainability, and defense digitalization rather than simple expansion.

6. Workforce Transformation

The sector faces an urgent skills gap in digital engineering, AI, and advanced manufacturing. Companies are rethinking hiring models, launching upskilling programs, and partnering with universities to build future talent pipelines.

7. Space: The Next Commercial Frontier

Private enterprises are taking the lead in space exploration and defense. From satellite services to orbital infrastructure, commercial players are redefining how space powers communication, surveillance, and sustainability.

Looking Ahead

As geopolitical uncertainty and technological disruption continue, A&D leaders are being urged to adopt a holistic, forward-looking strategy—balancing national interests, sustainability goals, and commercial innovation.

The future of aerospace and defense will belong to those who can combine resilience with reinvention—transforming today’s turbulence into tomorrow’s flight path.

Riyadh Air and Saudia have announced the implementation of the first phase of their Strategic Cooperation Agreement, marking a major step in strengthening connectivity under Saudi Arabia’s National Aviation Strategy.

The partnership builds on a Memorandum of Understanding signed in November 2023 and enables the two airlines to expand travel options for domestic and international passengers.

As part of the first phase, Riyadh Air has established a connection with Saudia’s Passenger Service System (PSS), allowing the carriers to implement their codeshare across their respective technology platforms.

Under the RX-SV codeshare, Riyadh Air will place its “RX” designator on selected Saudia-operated flights from Riyadh’s King Khalid International Airport to six domestic destinations: Abha, Al Qassim, Dammam, Jeddah, Medina and Tabuk.

The agreement will give Riyadh Air passengers access to additional destinations worldwide through convenient connections in Riyadh. For example, travelers from Dammam can connect via Riyadh to Madrid on a single ticket, while passengers flying from Kuala Lumpur can connect through Riyadh to Medina.

By using Saudia’s frequent services between Riyadh and the six codeshare destinations, Riyadh Air will offer passengers more convenient connections aligned with the arrival and departure schedules of its flights at Riyadh.

Both airlines operate within the King Khalid International Airport Terminal 1-4 complex, enabling passengers to benefit from streamlined connections, single-ticket journeys and through-checked baggage to their final destinations.

The first phase represents a significant step toward deeper cooperation between Saudi Arabia’s two national carriers and supports the Kingdom’s broader ambitions to expand its global aviation network.

Source: aaco.org

SalamAir has announced the establishment of Salalah’s first-ever airline base, marking a major step in the airline’s expansion and strengthening direct international connectivity from Oman’s Dhofar Governorate.

The new Salalah-based operation will initially serve three international destinations: Jeddah in Saudi Arabia, Chattogram in Bangladesh and Calicut in India. Bookings opened on August 26, with flights scheduled to begin from the end of October as part of SalamAir’s Winter 2026 schedule.

The base follows SalamAir’s expanded operations during the 2026 Khareef season, when the airline increased capacity on the Muscat-Salalah route to as many as 15 daily flights during peak periods.

The airline also introduced special domestic fares for Omani nationals, with one-way tickets starting from OMR 9.99, supporting affordable travel between Muscat and Salalah.

The new base is expected to extend SalamAir’s role beyond the Khareef season by supporting year-round travel demand among residents and expatriate communities in Dhofar while offering more direct access to key regional and international destinations.

Operations from Salalah will be supported by SalamAir’s Airbus A320neo and A321neo fleet. The airline currently operates 18 aircraft, providing additional flexibility to support growing demand across its network.

During the winter season, SalamAir will also operate charter flights linking Salalah with Astana and Almaty in Kazakhstan, supporting inbound tourism from Central Asia.

The Salalah base forms part of SalamAir’s wider strategy to expand its network from key airports across Oman, develop underserved markets and stimulate new travel demand while supporting the growth of the Sultanate’s aviation and tourism sectors.

Source: ZAWYA