Italy's Aerospace and Defence Market: A Guide for Overseas Suppliers

Overview

Italy is one of Europe's most important aerospace and defence markets, but it does not work like France, Germany or the UK. The market is built around Leonardo. The former Finmeccanica is the centre of Italian A&D: helicopters at Vergiate, combat aircraft and aerostructures at Turin and Pomigliano, electronics and group HQ at Rome, and, since 30 July 2025, land vehicles at Bolzano through the EUR 1.7 billion Iveco Defence Vehicles acquisition (Leonardo IDV). Around Leonardo sit MBDA Italy, Fincantieri, Avio Aero, ELT Group and a network of around 300 specialised SMEs supplying into the primes (trade.gov, Italy Aerospace & Defense Market Resource Guide). Italy is also Europe's largest commercial rotorcraft manufacturer through Leonardo's AW family, with more than 1,300 AW139s delivered and a 16.6% share of the global civil medium-twin market, and the third partner, alongside the UK and Japan, in the Global Combat Air Programme. Aerospace and defence are Italy's most coherent high-technology export cluster.

For overseas suppliers, the first question is usually not whether Italy is attractive. It is where they sit in relation to Leonardo: customer, partner, competitor or gatekeeper. A supplier that fits a Leonardo programme, MBDA Italy workshare, Fincantieri naval requirement, Avio Aero engine package or Thales Alenia Space Italia satellite programme can find serious opportunities. A supplier that tries to treat Italy as a loose collection of independent buyers will struggle.

The Italian aerospace sector posted roughly EUR 18 billion of turnover in 2024 with around 60,000 employees across 198 companies, third in the European Union (Invest in Italy). Exports contributed around EUR 6.7 billion (SACE 2024); most of what Italian industry builds is shipped out, so overseas suppliers are often competing for workshare on programmes that serve customers well beyond Italy. Italy's defence budget reached EUR 45.3 billion in 2025, 2.01% of GDP, up 33% on the year prior and the first time the country has crossed the NATO threshold (Defense News). Part of that jump reflects reclassification of military pensions and Carabinieri costs, with the core procurement budget for 2026 closer to EUR 31 billion; the government has committed to 2.5% of GDP by 2028.

Italy defence spending trajectory 2020-2028

2020

24 EUR bn

2021

27 EUR bn

2022

28 EUR bn

2023

31 EUR bn

2024

34 EUR bn

2025

45.3 EUR bn

2026

47 EUR bn

2028 target

55 EUR bn

Italy defence spending trajectory 2020-2028

Category	Value
2020	24 EUR bn
2021	27 EUR bn
2022	28 EUR bn
2023	31 EUR bn
2024	34 EUR bn
2025	45.3 EUR bn
2026	47 EUR bn
2028 target	55 EUR bn

Any supplier strategy for Italy starts with a Leonardo position assessment in each sub-sector: partner, customer, competitor or gatekeeper. On civil, Leonardo Helicopters runs final assembly at Vergiate; Avio Aero (GE Aerospace) produces civil engine workshare at Rivalta di Torino and Cameri; ATR builds fuselage panels and empennages at Pomigliano d'Arco and Foggia; and Leonardo's Grottaglie site produces the Boeing 787 centre fuselage. Airbus alone works with more than 110 Italian suppliers and supports 13,500 supply-chain jobs (Airbus in Italy). On defence, Leonardo, MBDA Italy, Fincantieri, ELT Group and, now, Iveco Defence Vehicles form the industrial core.

Italy is not an Airbus shareholder and has no Airbus commercial final-assembly site, but it is embedded in the Airbus system through Leonardo. Leonardo holds 50% of ATR (fuselage panels at Pomigliano d'Arco, empennages at Foggia), 32% of NH Industries for NH90 helicopter production, and is the Italian industrial partner on Eurodrone alongside Airbus Defence & Space. Italy also participates in MBDA via Leonardo's 25% shareholding. Airbus workshare therefore flows into the country primarily through the Leonardo value chain rather than through direct Airbus sites.

For overseas suppliers without an Italian footprint, the practical routes in are Tier supply into Leonardo's divisions, workshare on Italian-sited commercial programmes, and partnership or joint venture with an Italian-cleared entity for classified work. Italy is open to overseas suppliers, but relationships, language, continuity and local industrial cooperation matter. The market rewards suppliers that understand where they fit in the Italian prime structure and are prepared to build trust over time.

Major players

The Italian A&D base is top-heavy. Leonardo holds the centre, with a ring of national primes (Fincantieri, MBDA Italia, Elettronica), foreign-owned sites of real national weight (Avio Aero under GE Aerospace, Piaggio Aerospace under Baykar), and consortium vehicles in which Leonardo holds half or more (ATR, Thales Alenia Space Italia). The table below is an orientation reference, not a sub-sector deep dive.

Leading sub-sectors

Helicopters

Italy is the largest commercial helicopter manufacturer in Europe. With Leonardo's UK arm at Yeovil, it also runs a joint Italy-UK rotorcraft network that has no equivalent elsewhere in Europe. Suppliers qualified on one side can often find doors open on the other.

Leonardo's helicopter division passed EUR 5 billion in revenue for the first time in 2024, up 11.1% on orders of EUR 5.9 billion and a backlog of EUR 15.1 billion (Helicopter Investor). Civil rotorcraft accounted for roughly 35% of that revenue, with Leonardo holding 16.6% of the global civil medium-twin market. 2024 deliveries totalled 191 across the AW139, AW169, AW189, AW101 Merlin, AW149 and NH90 families.

Leonardo revenue by division 2024

Helicopters

5.5 EUR bn

Defence Electronics & Cyber

5.2 EUR bn

Aircraft

3.8 EUR bn

Aerostructures

1.6 EUR bn

Other / JVs

1.7 EUR bn

Leonardo revenue by division 2024

Category	Value
Helicopters	5.5 EUR bn
Defence Electronics & Cyber	5.2 EUR bn
Aircraft	3.8 EUR bn
Aerostructures	1.6 EUR bn
Other / JVs	1.7 EUR bn

The AW139 is the benchmark medium twin, with more than 1,300 delivered between Vergiate and the Philadelphia line, strongest in offshore oil and gas, EMS, law enforcement and VIP. The AW169 has surpassed 320 orders; the AW189 covers heavy-twin offshore and SAR. The AW149 military medium won the UK's New Medium Helicopter competition in March 2026, a 23-aircraft GBP 1 billion contract to be built at Yeovil with an export pipeline of up to GBP 15 billion (UK MOD). The AW101 Merlin serves the Royal Navy, the Italian Navy and other NATO operators; the NH90 runs through NHIndustries, in which Leonardo holds 32%.

Leonardo Helicopters is headquartered at Vergiate, with supporting sites at Tessera, Frosinone and Anagni. The UK arm at Yeovil supports 3,300 direct and 12,000 supply-chain jobs, backed by a EUR 30 million logistics hub opened in 2024. The natural Italian entry points for overseas content are gearboxes and transmissions, rotor-blade materials, airframe structures, avionics, VIP and EMS interiors, and T700 / RTM322 engine workshare. Demand is being driven by offshore-wind support, European and Asian HEMS expansion, government fleet renewals, and the UK NMH win.

Image placeholder: Leonardo AW139 final assembly line at Vergiate, north of Milan

Source: Leonardo press imagery

Aerostructures and Civil (ATR)

Italy manufactures roughly half of every ATR regional turboprop, is the European centre for Boeing 787 centre-fuselage composite production, and holds Airbus Tier 1 commercial workshare across the A220, A320, A330 and A350. Naples and Apulia form the southern corridor; Turin and Milan hold engines.

ATR reported 60 gross orders in 2025 on deliveries of 32, held back by tier-2 bottlenecks (FlightGlobal). A second Toulouse final-assembly line reopens in May 2026 targeting a 20% production increase, pulling directly through Italian workshare at Pomigliano d'Arco and Foggia. Leonardo produces 14% of the Boeing 787 (centre fuselage Sections 44 and 46 plus the horizontal stabiliser) at Grottaglie and Foggia; 2025 shipments were trimmed from 115 to 81 on Boeing rate problems, and Leonardo is pursuing a carve-out or partnership for its aerostructures arm, targeting return to operating balance by 2028 (FlightGlobal). On Airbus, Leonardo produces tier-1 aerostructures for the A220, A320, A330 and A350 at Pomigliano, Foggia and Nola, with Eurofighter and M-346 military workshare on the same base.

On engines, Avio Aero at Rivalta di Torino and Cameri is Italy's civil and military engine centre. GE Catalyst received FAA Part 33 certification on 27 February 2025, the first clean-sheet turboprop certified this century, and is the launch engine for the Textron Beechcraft Denali. Microtecnica at Turin moved from Collins Aerospace (RTX) to Safran Electronics & Defense on 21 July 2025 (Safran), and Piaggio Aerospace at Villanova d'Albenga is now owned by Turkey's Baykar following a Golden Power-approved acquisition closed 30 June 2025 (Breaking Defense). Four regional clusters (DAC, DAP, DTA and LAC) support the base across Campania, Piedmont, Apulia and Lombardy.

The natural Italian entry points for overseas content are precision-machined aerostructure components, titanium and aluminium forgings and castings, composites, machined engine components for Avio Aero, specialist coatings, NDT equipment, and factory automation for Cameri. Demand is being driven by ATR second-FAL activation, the A320 and A350 rate climb, Catalyst serial production, and the Leonardo aerostructures restructuring.

Image placeholder: ATR fuselage final assembly at Leonardo Pomigliano d'Arco

Source: Leonardo press imagery

Missiles and Air Defence

Italy is central to European missile co-production through MBDA, the Franco-British-Italian consortium jointly owned by Airbus, BAE Systems and Leonardo. MBDA Italy leads industrial work on the Italian Army's ground-based air defence and Italian Navy anti-ship weapons. The electronic-warfare side runs through ELT Group, the privately controlled Italian EW specialist.

MBDA Italy's 2024 order portfolio rose more than 40%, with consolidated 2025 orders targeted above EUR 2 billion, 400 staff added in 2024 and a further 300 planned for 2025 across La Spezia, Aulla, Noceto and Fusaro (MBDA Italy). It is the most visible missile-industry capacity expansion in southern Europe.

Aster 30, in its SAMP/T NG variant, is the Franco-Italian upper-tier air-defence system; batteries are in serial production and have been supplied to Ukraine. CAMM-ER provides Italian Army self-protection. Teseo MK2/E is the next-generation anti-ship missile for the Italian Navy's FREMM frigates, in serial ramp at Fusaro and La Spezia. Marte ER serves the export market. On combat air, ELT Group leads the Italian industrial contribution to the GCAP EW suite, partnering Leonardo UK Edinburgh.

MBDA Italy is headquartered in Rome, with integration at La Spezia, production at Aulla (Lucca) and Noceto (Parma), and anti-ship production at Fusaro (Naples). ELT Group is based in Rome, with EW workshare across Eurofighter, AW101 and GCAP. Leonardo Electronics contributes radar, seekers and sensor fusion from Rome.

The natural Italian entry points for overseas content are propellants and energetics, rocket-motor casings and forgings, gyros and IMUs, fuze components, seeker electronics, RF and microwave sub-assemblies, missile-body precision machining, and launcher actuation. Cross-qualification from MBDA UK Bolton or MBDA France into MBDA Italy is a common opening route. Demand is being driven by NATO replenishment, Italian Army air-defence modernisation, and the GCAP EW workshare ramp from 2026.

Space and Satellites

Italy is Europe's second-largest commercial satellite manufacturing base after France. It runs from Rome (telecoms and navigation) through L'Aquila (optical payloads) to Turin, where every pressurised cargo module for Northrop Grumman's Cygnus ISS resupply vehicle is built. Thales Alenia Space (67/33 Thales / Leonardo) inaugurated a EUR 100 million satellite factory at Rome Tiburtina in 2024, with capacity for over 100 micro and small satellites per year (European Spaceflight). Italy has allocated approximately EUR 7.3 billion for space programmes through 2026, including a EUR 3.1 billion ESA contribution and around EUR 2.3 billion direct to the Italian Space Agency (ASI) (Chambers 2025).

By 2030, Italian commercial space output is projected to cross EUR 3 billion annually, with the Rome factory at full 100-satellite throughput and the IRIDE Earth-observation constellation on orbit. Thales Alenia Space Italia runs LEO production at Rome Tiburtina; Turin produces human-spaceflight hardware including the Multi-Purpose Habitation (MPH) module under contract with ASI for 2033 Artemis-era launch; Avio at Colleferro provides the Vega C small launcher. The constraint is clear: European small-launcher capacity remains the weak link. Vega C return-to-flight after the 2022 anomaly is still consolidating, and reusable-launcher demonstrators including ESA Themis will not replace commercial launch capacity before 2030.

On Galileo Second Generation, Thales Alenia Space Italia won six of the twelve satellites under a EUR 772 million ESA contract, with the first reaching orbit in late 2024. Cygnus XL entered service in 2025. Lunar I-Hab, under a EUR 327 million ESA contract, was originally destined for NASA's Lunar Gateway; following the Gateway's cancellation in March 2026, I-Hab and related modules are being repurposed for a lunar surface base. IRIDE is Italy's flagship national Earth-observation constellation. Named players are Thales Alenia Space Italia at Rome, Turin and L'Aquila; Airbus Italia at Rome Tiburtina; Avio at Colleferro; Telespazio at Rome Fucino; and CIRA at Capua. The natural Italian entry points for overseas content are satellite sub-systems (reaction wheels, star trackers, propulsion, solar arrays, thermal management), RF and microwave payload components, optical payload sub-assemblies, ground-segment antennas, launcher engine components, and mission-control software.

Land Systems

Italy's land-systems industry consolidated under Leonardo's control in 2025. Leonardo completed the EUR 1.7 billion acquisition of Iveco Defence Vehicles on 30 July 2025 (Leonardo IDV), bringing wheeled military vehicles, tactical trucks and armoured-vehicle capacity into the group. The move creates a single credible Italian Army prime for the first time since the 1990s, with Rheinmetall as partner on the tracked side through the Leonardo-Rheinmetall Military Vehicles (LRMV) joint venture at La Spezia.

The Lynx KF41 infantry fighting vehicle is in early production at LRMV La Spezia, with Italian Army potential volume up to 1,050 vehicles replacing VBM Freccia. The Panther KF51 is a candidate for any Italian Army MBT decision under LRMV, competing with the Leopard 2A8. The Italian Army placed a 1,453-vehicle tactical-logistic truck order with Iveco (now IDV / Leonardo) in December 2024. Legacy wheeled platforms including the Centauro II (Leonardo, the former Oto Melara) remain in sustainment and export. Key sites are Leonardo HQ Rome; IDV at Bolzano and Piacenza; and Oto Melara and LRMV at La Spezia.

The natural Italian entry points for overseas content are transmissions and drivetrains, armour and ballistic protection, vetronics and C4I integration, optronics, remote weapon stations, engine workshare, simulators, main-gun ammunition, and sustainment tooling. Rheinmetall's pan-European supplier base funnels directly into LRMV La Spezia; the Iveco truck chain is a separate, heavily Italian network. Demand is being driven by the Italian Army's AICS / VAC wheeled APC family, the Lynx KF41 ramp through 2030, NATO tactical-truck replenishment, and pan-European Main Ground Combat System discussions.

Unmanned Systems

Italy's unmanned aerospace capability has moved up a gear in the past two years. It is split between Leonardo's own MALE line, a new Italian UCAV industrial base through the Baykar-Piaggio acquisition, and longstanding US joint-production work at Cameri. Leonardo's Falco EVO is in service with several export customers; the larger Falco Xplorer, a tactical medium-altitude long-endurance platform in the 1.3-tonne class, is Leonardo's second-generation MALE offering and the company's contender for the Italian Air Force's own unmanned requirements. Piaggio Aerospace, now Baykar-owned following the 30 June 2025 close, has reconfigured Villanova d'Albenga for Bayraktar TB3 and Akıncı production for European export, giving Italy a tier-1 UCAV manufacturing line for the first time. At Cameri, Leonardo holds Italian industrial workshare on Northrop Grumman's MQ-4C Triton high-altitude maritime surveillance platform operated by the Italian Air Force. The Aeronautica Militare also operates MQ-9 Reaper and Piaggio P.1HH HammerHead aircraft. The natural Italian entry points for overseas content are flight-control components, SATCOM, EO/IR payloads, propulsion workshare and ground-control stations.

Opportunities

Italian aerospace and defence primes have record order intake that the domestic supply chain cannot fully absorb. Leonardo's EUR 20.9 billion order intake in 2024 and MBDA Italy's 40%+ order growth have pushed the tier base against its ceiling; ATR's short 2025 deliveries were publicly blamed on tier-2 bottlenecks. For an overseas supplier with spare capacity in the right discipline, or a specialism the Italian base does not hold at scale, that is where the opening sits. Primes are investing in supply-chain resilience, widening their vendor lists beyond the traditional Italian SME core to reduce single-source exposure.

Italian demand for overseas content concentrates in precision-machined aerostructure parts; composite sub-assemblies (honeycomb, pre-preg, 787 content, A220 empennage workshare); electro-mechanical sub-systems (actuators, valves, environmental control, where Microtecnica under Safran is incumbent); electronics and RF (connectors, backplanes, flight-deck displays, missile-seeker sub-assemblies); specialist materials (titanium and superalloy stock, coatings, bearings); propellants and energetics for the MBDA ramp; and tooling and additive-manufacturing automation for Avio Aero. Design-to-build openings concentrate on GCAP composites, Catalyst engine workshare, Lynx KF41 vetronics and satellite sub-systems for Galileo G2G and IRIDE.

The Italian Army's next-generation air-defence shields and the long-running replacement of legacy armour under the Leonardo-Rheinmetall framework are two of the largest capacity calls running through the primes at present.

The right entry tier depends on capability and existing relationships. The disciplines where Italian primes are most stretched and most receptive to new entrants are missile-body precision machining, engine-component additive manufacturing, and satellite payload electronics.

Italy does not operate a formal offset regime equivalent to Poland's or Saudi Arabia's. Industrial cooperation is negotiated deal-by-deal under bilateral defence treaties and through Leonardo-led programme workshare, with government-to-government agreements used frequently.

The distinctive Italian mechanism is Golden Power (poteri speciali): the Prime Minister's Office can review and condition foreign acquisitions of Italian defence and dual-use assets. It was applied to the Baykar-Piaggio Aerospace approval in 2024-2025, reviewed against the Rheinmetall-Leonardo joint venture, and signals that the Italian government will accept foreign investment into its A&D base, but on its own terms. Overseas suppliers considering an acquisition or a joint venture should budget for a formal Golden Power notification and a conditioning review.

Our Insights

Any Italian aerospace or defence programme of scale touches Leonardo somewhere in the value chain. The company is simultaneously a potential customer, a partner (through LRMV, MBDA, Thales Alenia Space, NHIndustries), a competitor where an overseas supplier's product overlaps its own capability, and a gatekeeper through ministerial relationships and programme leadership. A market-entry strategy that does not start with a Leonardo position assessment will drift.

English is fluent at C-suite level across Leonardo, MBDA Italy, Avio Aero, Thales Alenia Space and the larger tier-ones. Below that, procurement documentation, engineering specifications and day-to-day exchanges happen in Italian. An overseas supplier without Italian capability on the team will lose ground to a competitor who can read the room in the working language.

Italian business culture tends to move more slowly than northern Europe on first contact. A first meeting is not transactional; expect two, three, sometimes four visits before serious commercial discussions begin. Continuity of the person visiting matters more than seniority. Pranzo, the working lunch, matters. Trust built this way is durable; trust forced faster tends to show its weakness when a contract needs renegotiating.

GCAP is reshaping Italian aerospace supply chains. The UK-Italy-Japan structure forces Italian industry to build new relationships with BAE Systems Warton, Mitsubishi Heavy Industries and the Japan Aircraft Industrial Enhancement Co (JAIEC). Italian companies that historically worked single-country supply chains are being asked to qualify on a trilateral basis. That creates openings for overseas suppliers who already operate across all three countries or who offer a capability all three need. GCAP will play out over twenty years; positions established now should become more valuable over time.

Italian aerospace concentrates on three nodes: Turin, Milan and Vergiate for engineering, helicopters, engines and satellites; Rome for Leonardo HQ, MBDA Italy, Thales Alenia Space Italia, Airbus Italia, ELT Group and the Ministry of Defence; and Naples, Grottaglie and Foggia for aerostructures. La Spezia runs the naval corridor. The northern cluster has deeper Tier 2 SME density; the southern cluster has modern facilities but lighter SME depth. ELT Group illustrates a further pattern: privately controlled by the Benigni family with minority stakes held by Leonardo and Thales, it has built a European EW franchise across Eurofighter, AW101 and now GCAP. That structure, a family-held specialist with quiet minority alignment to a prime, recurs across Italian aerospace and defence.

If we do not act now, with awareness and urgency, we will leave our children a worse country. And we cannot allow this.

Trade Shows

The Paris Air Show is the largest aerospace trade show in the world and the priority international event for Italian aerospace primes, with Leonardo, MBDA, Avio Aero and Thales Alenia Space all taking major stands. For overseas suppliers seeking a first Italian meeting, a scheduled appointment with Leonardo or MBDA at Le Bourget is often easier to arrange than an initial visit to Rome or Turin. Biennial (odd years).

Farnborough is the second-largest show of its kind after Paris and the principal UK-hosted venue where Italian primes present civil helicopter, aerostructures and engine programmes. Leonardo's Yeovil team and Avio Aero's civil engine organisation are both visible here. Biennial (even years).

SEAFUTURE is Italy's dedicated naval and maritime defence exhibition, hosted at the La Spezia Naval Base, with access to Italian Navy delegations, Fincantieri, MBDA Italy and the broader naval supply chain. Over 140 international delegations attended the 2025 edition. Biennial (odd years).

How Westworld helps

Westworld has worked across Italian aerospace and defence for over two decades, with direct experience of the Leonardo-centred supply chain from Turin and Milan down to Rome, Naples, Grottaglie and La Spezia.

On the civil side, our work covers Leonardo Helicopters' output at Vergiate, Avio Aero's civil engine workshare at Rivalta di Torino and Cameri, and ATR tier supply through Pomigliano and Foggia. On defence, we have direct experience with MBDA Italy's complex weapons programmes, Fincantieri naval, Leonardo defence electronics and aircraft, and the new Iveco Defence Vehicles footprint at Bolzano.

We understand the relationship dynamics that define the Italian market: the Leonardo position assessment that every serious supplier must do, the pace at which Italian procurement relationships develop, and the industrial cooperation structures that determine how overseas companies participate.

Read more about our sales representation services, our European aerospace coverage, our European defence coverage, or our country-by-country coverage map. If you are considering the Italian market, or looking to deepen an existing relationship with Leonardo or its supply chain, please get in touch.