The global fighter jet market is experiencing unprecedented growth, with the industry valued at approximately $50.8 billion in 2024 and projected to reach $76.17 billion by 2034. Despite this booming market driven by geopolitical tensions, modernisation efforts, and rising defence budgets, the world's most advanced fighter jet—the F-35 Lightning-II—faces mounting scrutiny over reliability issues, escalating costs, and emerging competition that threatens its market dominance.

Market Dynamics And Growth Drivers

The fighter jet market is experiencing remarkable expansion, fuelled by several key factors that are reshaping global defence procurement strategies. NATO's landmark decision to increase defence spending targets from 2% to 5% of GDP by 2035 represents the most significant shift in alliance spending policy since the Cold War, potentially opening vast new markets worth hundreds of billions of dollars annually.

Geopolitical tensions serve as the primary catalyst for this growth. Recent military operations, including India's Operation Sindoor against Pakistan and Israel's Operation Rising Lion targeting Iran, demonstrate how nations are moving beyond traditional deterrence strategies to implement active conventional responses under nuclear shadows. These conflicts have accelerated military modernisation programs worldwide, with countries recognising the need for advanced air power capabilities.

The Asia-Pacific region emerges as the fastest-growing market, driven by China's military expansion, India's modernisation efforts, and regional security concerns. European defence budgets have surged 17% to $693 billion in 2024, while global military expenditures reached $2.718 trillion, representing a 9.4% real-term increase from the previous year.

F-35 Program: Success Amid Challenges

The F-35 Lightning-II remains the most successful stealth fighter program in history, with over 1,170 aircraft delivered globally and the fleet recently surpassing one million flight hours. Lockheed Martin projects delivering 170 to 190 F-35s in 2025, with approximately half of all fighter jets purchased annually worldwide being F-35s.

However, the program faces significant headwinds that threaten its future prospects. The U.S. Department of Defence cut its planned purchases from over 80 jets annually to just 47 for fiscal year 2026, reflecting a strategic pivot toward autonomous weapons and long-range missile systems. This reduction signals that the F-35 may no longer be considered the centrepiece of future air force planning.

Technical And Operational Challenges

The recent incident involving a British Royal Navy F-35B stranded at Thiruvananthapuram International Airport in Kerala since June 14, 2025, highlights persistent reliability concerns. The aircraft, operating from HMS Prince of Wales during joint naval exercises, suffered a critical hydraulic system failure that prevented its vertical take-off capability—a defining feature of the F-35B variant.

Despite efforts by Royal Navy technicians and the deployment of specialised UK engineering teams with advanced equipment, the $120 million aircraft remains grounded after more than two weeks. The incident has sparked discussions about the F-35's operational readiness and raised questions about India's radar detection capabilities when the Indian Air Force's IACCS network successfully detected and identified the stealth aircraft.

The Technology Refresh 3 (TR-3) upgrade program has caused significant delivery delays, with newly built aircraft accumulating at Lockheed's Fort Worth facility for nearly a year. While deliveries resumed in July 2024, the jets delivered with interim TR-3 software cannot conduct combat missions until 2025, creating operational gaps for military customers.

Escalating Costs And Maintenance Concerns

Financial sustainability represents perhaps the greatest long-term challenge for the F-35 program. Operational sustainment costs are projected to exceed $1.5 trillion by 2088, representing a 44% increase since 2018. The Pentagon's decision to withhold $5 million per jet in payments to Lockheed until new F-35s achieve full combat capability reflects growing cost concerns.

Maintenance, repair, and overhaul (MRO) costs are expected to spike dramatically as advanced aircraft comprise larger fleet portions. By 2035, the F-35 alone will account for 9.5% of global MRO spending—more than twice the aircraft's current fleet share, highlighting the disproportionate expense of maintaining fifth-generation fighters.

Competitive Landscape And Market Alternatives

While the F-35 maintains technological superiority, credible alternatives are gaining market traction. The Dassault Rafale has emerged as the most successful 4.5-generation fighter, securing major export contracts with India, Egypt, UAE, Qatar, and Indonesia. Despite lacking stealth capabilities, the Rafale offers excellent multi-role flexibility and attractive industrial offset packages.

The Eurofighter Typhoon continues appealing to European buyers seeking to maintain production and maintenance capabilities within the EU. Current order standings show 680 Typhoons ordered versus 495 Rafales, though the Rafale is rapidly closing the gap with strong recent sales performance.

Emerging competitors pose significant challenges to F-35 dominance. Turkey's KAAN fighter jet secured its first export order with Indonesia's $10 billion contract for 48 aircraft, representing a major breakthrough for non-Western manufacturers. The deal includes significant technology transfer components, addressing developing nations' desires for industrial participation rather than simple procurement.

Russia's Su-57 and China's J-35 represent direct fifth-generation competition, though with limited export success to date. Algeria confirmed as a Su-57 buyer while Russia has made offers to India, though India appears focused on developing indigenous capabilities. China's J-35 made its international debut at the 2024 Zhuhai Air Show, generating significant interest despite Russian claims of Su-57 superiority.

The South Korean KF-21 Boramae and Swedish Saab Gripen-E offer attractive alternatives for cost-conscious buyers. The Gripen E's open-architecture systems and minimal U.S. technology dependency appeal to countries seeking sovereignty over their defence capabilities, particularly in Southeast Asia and Canada.

India’s Advanced Medium Combat Aircraft (AMCA) is being developed as a fifth-generation stealth fighter with capabilities designed to rival leading platforms like the American F-35.

The AMCA is engineered to match or exceed the F-35 in stealth, avionics, and multi-role flexibility, while offering India strategic autonomy and a boost to indigenous defence manufacturing.

While the F-35 is a proven platform with extensive combat experience, the AMCA’s design philosophy, indigenous focus, and integration of next-generation features (such as AI and manned-unmanned teaming) position it as a formidable competitor in the global fifth-generation fighter arena.

AMCA vs F-35: Key Comparison

FeatureAMCA (India)F-35 (USA)
StealthAdvanced shaping, internal bays, RAMAdvanced shaping, internal bays, RAM
AvionicsIndigenous AESA radar, AI, sensor fusionAESA radar, sensor fusion, AI
SupercruiseYesLimited (F-35A only, marginal)
Manned-Unmanned TeamingPlannedIn development
Payload (internal)1,500 kg~1,800 kg
Indigenous Content75–85% (targeted)US/partner nations only
Export/Technology RestrictionsNone (domestic control)Extensive
Entry into ServiceProjected 20352015 (F-35A)
Strategic AutonomyHighLow (for non-US operators)

Future Outlook

The F-35's challenges extend beyond technical and financial issues to encompass broader strategic concerns about technological sovereignty and supply chain dependency. Countries increasingly seek alternatives that offer industrial participation, technology transfer, and freedom from potential "kill-switch" mechanisms that could limit operational autonomy.

Canada's re-evaluation of its 88-jet F-35 order exemplifies these concerns, with the newly installed government reconsidering the full procurement in light of rising costs and supply chain dependencies. While complete cancellation remains uncertain, alternatives including the Eurofighter Typhoon, Rafale, and Saab Gripen are under active consideration.

The F-35 program's future depends critically on addressing cost sustainability and operational reliability. Lockheed Martin's efforts to achieve 20 F-35 deliveries per month and clear the backlog of stored aircraft represent positive steps, but fundamental issues require resolution to maintain market confidence.

Market Leadership Under Pressure

Despite mounting challenges, the F-35 retains significant advantages including global logistics networks, NATO infrastructure compatibility, and unmatched sensor fusion capabilities. International momentum remains strong, with the UK confirming purchases of 12 additional F-35A variants for nuclear strike capabilities, and Germany, Portugal, Romania, and Czech Republic actively pursuing F-35 acquisition programs.

However, the incident in India, combined with production delays, cost escalations, and emerging competition, demonstrates that the F-35's once-unchallenged supremacy faces serious tests. As the fighter jet market continues expanding driven by geopolitical tensions and modernization needs, success will increasingly depend on addressing fundamental reliability and cost concerns while competing against alternatives offering greater industrial sovereignty and lower total ownership costs.

The F-35 program stands at a critical juncture where technical excellence must be matched by operational reliability and financial sustainability to maintain its position as the world's premier fighter aircraft in an increasingly competitive and cost-conscious global market.

IDN