Overview
Portugal’s aerospace and defense industry has a small but increasingly capable industrial base across engines and MRO, aerostructures, cabin/interiors, electronics, tools/support technologies, advanced materials, and production. The sector is strongly export-oriented and tightly integrated into European and global aerospace supply chains.
The organization of the Portuguese Air Force is based on a vertical rank structure, founded on functional, technical, hierarchical, and coordinative authorities, reinforcing responsibility across operational, logistics, and personnel areas.
The Chief of Staff of the Portuguese Air Force (CEMFA) is also the National Aeronautical Authority (Autoridade Aeronáutica Nacional) and is the principal collaborator of the Ministry of National Defense and the Chief of the General Staff of the Armed Forces (CEMGFA) on Air Force matters.
The current CEMFA is General João Guilherme Rosado Cartaxo Alves. He took office on 25 February 2022 and was reappointed for an additional two-year term in February 2025. There are currently 14 active squadrons: 101, 201, 301, 501, 502, 504, 506, 551, 552, 601, 751 752, 802, and 991.
The Aerospace, Defense, and Space (AED), created in 2016, continues to be positioned as a strategic ecosystem-builder for the sector. AED Portugal cluster currently has over 160 entities that export around 87% of its production, generating a turnover of more than €1.7 billion euros.
The national space strategy, Portugal Space 2030, sets new targets for developing the sector. In 2019, the Government created “Portugal Space” (the Portuguese Space Agency), a private, non-profit organization to promote and strengthen Space in Portugal, its ecosystem and value chain for the benefit of society and economy in the country and worldwide. Portugal Space acts as a business and development unit for universities, research entities, and companies, as stated in the Portugal Space 2030 Strategy.
The United States remains a major supplier and partner in aerospace and defense, but U.S. exporters should plan for strong competition from European suppliers and the general EU preference to strengthen European industrial capacity.
Portugal has expanded the Air Force’s role in rural wildfire aerial operations and related capability development, including multi-year procurement/contracting authorities for firefighting-related aviation goods and services.
Nevertheless, US exporters should be aware that, like in many EU countries, there is a push to buy European. Engaging with the Portuguese Government and identifying local partners as early as possible is highly recommended.
MPL
Portugal’s Military Programming Law (LPM) 2023–2034, approved by Parliament in 2023, establishes the largest military investment framework to date, with a total allocation of €5.57 billion, representing a 17.5 % increase compared to the previous programming law. The LPM structures invest across 35 military capabilities, encompassing more than one hundred projects and around 400 sub-projects. For the first time, the law formally covers the five operational domains, land, maritime, air, cyber, and space, reflecting a broadened strategic approach. The cyber and space domains receive dedicated funding, with approximately €70 million allocated to cyber defense and €50 million to space capabilities. Funding under the LPM is primarily provided through State Budget allocations, complemented by limited own-revenue mechanisms. The law supports Portugal’s broader objective of increasing defense expenditure in line with its commitment to reach 2 % of GDP by 2030, as reaffirmed by the government.
In June 2025, Prime Minister Luís Montenegro announced that Portugal will increase its defense investment by €1 billion by the end of the year, accelerating goals set in the Military Programming Law. This funding will target equipment procurement, infrastructure upgrades, and human resource development within the Armed Forces.
The move aligns with NATO’s newly approved target for member states to allocate 5% (3.5% core defense and 1.5% dual-use) of GDP to defense by 2035. Portugal stated it would pursue a credible trajectory and aimed to reach 2% in 2025 ahead of its prior timeline.
MPL - Air Force
Air Force modernization priorities continue to emphasize air defense C2/radar/IFF, aircraft modernization and sustainment, pilot training systems, SAR capability upgrades, and transport/ISR capabilities consistent with the LPM’s domain priorities.
The recent developments include:
- C-390 Millennium (Embraer): Portugal ordered five aircraft (2019). The first was delivered in October 2023 and the second was delivered in June 2024 (for operation by Squadron 506).
- P-3C Orion acquisition (Germany): The Portuguese Air Force acquired the German P-3C inventory package consisting of six aircraft.
- A-29N Super Tucano (Embraer): Portugal contracted 12 A-29N aircraft (announced in 2024). In December 2025, the Portuguese Air Force announced delivery of the first aircraft of the 12-aircraft fleet.
- Industrial cooperation (2025): In December 2025, the Portuguese government announced/signaled intent supporting an Embraer A-29N final assembly capability in Portugal (Beja), linked to national industrial development.
Furthermore, regarding fifth-generation fighters, the Portuguese Air Force has consistently stated in public that the F-16 should be replaced by a 5th-generation aircraft, identifying the F-35 as the reference platform and warning that Portugal risks lagging allies already transitioning to it. By November 2025, the government emphasized the need for a competitive process between U.S. and European manufacturers and confirmed that no final decision had yet been taken, although Air Force leadership expects a decision on the F-16 replacement in 2026, alongside longer-term consideration of future sixth-generation systems.
MPL - Army
The Portuguese Army is prioritizing digitalization, mobility, and force protection. Key initiatives include the development of digital battlefield tools such as 3D terrain mapping for operational planning, training, and simulation, as well as the construction and modernization of training centers. The Army is expanding its use of unmanned and autonomous systems for logistics, surveillance, and reconnaissance, and plans to acquire UAS, mini-UAVs, and counter-UAS systems. Additional priorities include secure multifunctional tactical radios, replenishment of ammunition and war reserves, and the modernization of the PANDUR II 8×8 armored vehicle fleet through mid-life upgrades. These programs present opportunities for U.S. exporters specializing in sensors, communications, counter-drone technologies, autonomous platforms, armored vehicle subsystems, and NATO-standard munitions.
MPL - Navy
The Portuguese Navy’s modernization efforts focus on maritime security, anti-submarine warfare, and fleet sustainment. Under the LPM, the Navy is enhancing ASW capabilities through improved sensors and data processing, modernizing command, control, communications, and information infrastructure with an emphasis on virtualization and secure networks, and upgrading ship-to-shore communications, including HF systems. The Navy is also advancing a national combat management system, carrying out maintenance and mid-life upgrades of Tridente-class submarines, modernizing two Vasco da Gama–class frigates, and upgrading Lynx Mk95 helicopters. Complementary investments include auxiliary and logistics vessels and digital tools for fleet maintenance and lifecycle management. These initiatives align well with U.S. strengths in ASW systems, naval communications, combat management software, helicopter avionics, and sustainment analytics.
MPL - Space
In the space and cyber-related domains, Portugal’s investments are security-driven and largely dual-use, closely coordinated with NATO and European partners. The LPM emphasizes the expansion of Space Surveillance and Tracking capabilities, including the acquisition and integration of sensors and radars for low Earth orbit monitoring, as well as operational support for space situational awareness infrastructure. Additional efforts focus on developing cyber and space security training infrastructure, supporting R&D projects in space security and cybersecurity, and participating in cooperative programs within the European Defense Agency and NATO, including CapTech and NATO STO activities. These areas are particularly relevant for U.S. firms offering space surveillance technologies, data fusion and analytics, cybersecurity solutions, and advanced training and simulation systems.
Leading Sub-sectors
The best prospects for U.S. exporters exist in the following segments: commercial aircraft, business jets, turboprops, helicopters, UAVs, structures, propulsion systems, subsystems for aerospace vehicles; military aircraft, air defense systems, spacecraft, launch systems, communications systems; access control, identity management, integrated systems, security services.
There has been a recent increase in inference in small satellites as a global trend and their implementation as a complement to services provided by the larger infrastructure already in place stimulates further venues for access to space.
Opportunities
U.S. exporters should be aware that Portugal actively promotes European industrial participation and often favors EU-based solutions when capabilities are comparable. As a result, successful market entry typically depends on early engagement with Portuguese stakeholders and the establishment of partnerships with local industry, research institutions, or integrators. Portuguese procurement decisions place strong emphasis on long-term value, including technology transfer, training, sustainment, and local industrial involvement, rather than price alone.
Overall, Portugal’s defense modernization trajectory is stable, NATO-aligned, and accelerating, particularly in land digitalization, naval sustainment, and space-related security capabilities. While major platforms are increasingly sourced from European suppliers, significant opportunities remain for U.S. companies in high-technology niches, subsystems, software, sensors, sustainment solutions, and dual-use applications. For U.S. exporters, Portugal represents a strategically relevant market that rewards early engagement, technical differentiation, and a clear commitment to long-term partnership.
U.S. suppliers interested in the Portuguese market should connect with the U.S. Commercial Service in Portugal. Portuguese companies often seek technology that may add value to the projects they aim to deliver in Portugal and abroad. They are often proactive in reaching out to U.S. suppliers with specific requests for quotes.