In this article, a hierarchical approach is proposed for the design and assessment of a guided wave-based structural health monitoring system for the detection and localisation of barely visible impact damage in composite airframe structures. The hierarchical approach provides a systemic and practical way to establish guided wave-based structural health monitoring systems for different structures in the presence of uncertainties and to quantify system performance. The proposed approach is carried out in four steps: (1) determine optimal sensor placement for the target structure and its plausible impact scenarios, (2) set detection threshold for global damage index based on the noise level present in the required environmental and operations conditions, (3) detect damage in critical locations and quantify detection performance by calculating the probability of detection, probability of false alarm and detection accuracy and (4) locate the detected damage while also quantifying the accuracy of location estimation and the probability of correctly indicating if the damage is in an area critical to the integrity of the structure. The proposed approach is demonstrated in aircraft carbon fibre-reinforced polymer structures from coupon level (simple flat panels) to sub-component level (large flat panel with multiple carbon fibre-reinforced polymer stringers and aluminium frames) for the detection and localisation of barely visible impact damage.