 The UK aerospace and defense industries are inextricably intertwined. The UK aerospace industry is the second largest in the world, behind that of the U.S., and is an export-driven industry. In 2021, UK civil aerospace turnover totaled approximately $32 billion. The UK aerospace industry is the crown jewel for UK exports and, even though the UK does not produce large civil aircraft, 98% of domestic aerospace production is exported. In 2021, the UK defense industry turnover totaled approximately $33 billion, $15 billion of which was exported. In 2021, the UK space industry turnover totaled approximately $22 billion, $8 billion of which was exported.
Aerospace
The UK has a very mature supply chain and new entrants will need to dedicate significant resources to participate. The UK has a reputation as a global center of excellence for the design and production of engines, helicopters, wings, structures, and aircraft systems (including landing gear). The UK also designs and manufactures wings for all Airbus aircraft platforms. In addition to manufacturing, the UK has a thriving maintenance, repair, and overhaul sector (MRO), which provides services to the huge numbers of military and civil aircraft that fly through and from the UK every year.
More than 3,000 aerospace companies operate in the UK, and the aerospace sector has the largest number of SME companies in Europe, providing over 282,000 jobs directly and indirectly. Domestic companies include BAE Systems, Cobham, GKN, Meggitt, QinetiQ, Rolls-Royce, and Ultra Electronics. Non-domestic companies with a major presence include Boeing, Airbus Group, Leonardo (including its AgustaWestland and Selex ES subsidiaries), General Electric (including its GE Aviation Systems subsidiary), Lockheed Martin, MBDA, Safran, Spirit AeroSystems and Thales Group.
Airbus in Broughton assembles the wings for all Airbus civil aircraft, including the new A350 XWB. Boeing has a production facility in Sheffield, Boeing’s first manufacturing site in Europe, and GKN Aerospace produces the Advanced Technology Winglet for the Boeing 737 MAX. Rolls-Royce-manufactured engines power more than 35 types of commercial aircraft, and the company has over 13,000 engines in service around the world.
Drones are becoming an increasingly familiar aspect of life and work in the UK, playing a growing role in areas ranging from emergency services to construction and oil and gas. The rising use of drones in business and public services is predicted to be highly impactful and to deliver significant benefits to the British economy and society. Drones have seen a particularly significant uptake in the oil & gas industry. Drone use is also well established in the utilities industry, for the inspection of long, liner assets such as powerlines.
Defense
Defense cooperation between the U.S. and the UK is well established and the UK is considered a Tier one partner. As such, the UK has significant military capability and seeks to augment its current capability with the latest technology available. Most technology, if acquired from the U.S., requires an ITAR license and new suppliers need to be familiar with the licensing application process.
The UK is one of the top NATO countries in terms of defense spending. The UK met its spending target of 2% of its GDP in 2019, and 2020 and the UK Government announced in February 2022 its plan to invest $270 billion into the procurement of next generation military equipment over the next ten years. This investment is expected to strengthen the UK’s digital and cyber capabilities, along with air, land, and sea capabilities.
In March 2021, the UK released three strategic guidance documents: Integrated Review (IR) of Security, Defense, Development and Foreign Policy, Defence Command Paper (DCP), and the Defence & Security Industrial Strategy (DSIS). Highlights from the reports include:
Naval – $2.5 billion invested into the Royal Navy carrier force, the UK ship building industry, and development of greater missile capability. The UK will produce eight Type 26 Anti-Submarine Warfare Frigates, five Type 31 General Purpose Frigates, and a Type 32 multi-role frigate. $265 million will be spent on the Royal Marines to enable transition from amphibious infantry into a forward-based, highly capable maritime “Future Commando Force.”
Land – The British Army will reduce its troop strength (again) from 76,500 to 72,500 by 2025 by reorganizing into seven brigade combat teams. The British Army will create a Ranger regiment similar to the U.S. Army Rangers. The Warrior tank upgrade was cancelled and replaced with the wheeled Boxer (similar to the U.S. Stryker). $4 billion will be spent on new equipment such as long-range precision fires; air defense; tactical surveillance drones; and electronic warfare and cyberspace capabilities.
Air – Investing $2.6 billion in the Future Combat Air System. The RAF retired the E-3D Sentry in 2021, and it will be replaced with three Boeing E7 Wedgetails by 2023. The UK committed to purchasing more F-35s beyond its current order of 48, but no figure was specified. The UK, unfortunately, also announced its retirement of the C130-J Hercules, which will be replaced with 22 Airbus A400-Ms.
Space
The UK commercial space industry is rapidly growing, with an approximate turnover of over $22 billion in 2021. The stated ambition is to capture 10% of the global space market by 2030. Accelerating growth year on year, the UK is a world leader in nano and small satellites. 40% of all small satellites currently in orbit were manufactured in the UK. The UK commercial space sector has seen steady investments in new and existing space technologies and services, with funding coming primarily from industry and venture capital, with some government support. The market can be broken down into four main components. Over two-thirds of total market income is derived from Space Applications, followed by the smaller components of Space Operations, Space Manufacturing, and auxiliary services.
The UK has the ambition to be at the forefront of new developments in small satellite launch and sub-orbital flight, with seven launched sites planned within the UK. The UK’s long coastline and island location make it well suited to host different types of launch services. Scotland is the best place in the UK to reach in-demand satellite orbits with vertically launched rockets. There are also several aerodromes around the UK, each with its own unique geography and local infrastructure, giving the UK the capability to host a variety of different types of spaceflight activity including both horizontal and vertical launch. Industry and UK Government are working together to develop UK spaceports, as well as launch vehicle and small satellite technology. These technologies will be complemented by space services, such as test facilities.
U.S. companies looking to partner with British companies should look to the Harwell Space Cluster, which hosts 92 space organizations, including the UK Space Agency, RAL Space, the Satellite Applications Catapult, the Science & Technology Facilities Council and the European Space Agency's European Centre for Space Applications and Telecommunications.
Upcoming Events:
For companies seeking in-person opportunities to enter the U.K market, there are several upcoming events of interest:
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Farnborough International Airshow, Farnborough (greater London), UK. July 18-22, 2022
The Farnborough International Airshow is the second-largest show of its kind after the Paris Air Show, and includes over 1,500 exhibitors from 48 countries. It is a biennial week-long event to demonstrate civilian and military aircraft to potential customers and investors, and to announce new developments and orders.
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Space-Comm Expo, Farnborough (greater London), UK. September 7-8, 2022
This event showcases the manufacturing supply chain for products, services and solutions supplying commercial enterprises and developments in Space. Space-Comm Expo brings together the entire Space sector for business and networking, and provides industry and government speakers, a Meet -the-Buyer program, and face-to-face roundtables.
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MRO Europe, London, UK. October 18-20, 2022
MRO Europe is the largest event of its kind in Europe, where airlines, MROs, OEMs, lessors, suppliers and industry experts converge to explore and define the aviation maintenance industry. MRO Europe is the meeting place for all those looking to learn, connect and do business in the commercial aviation aftermarket.
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Three Counties Defence & Security Expo (3CDSE), Malvern, UK. November 2-3, 2022
3CDSE is a Special Forces-focused event, and is an active touchpoint for leading-edge technology. It brings together defense and security innovators to create a forum for commercial discussions between industry, armed forces, government, law enforcement and emergency services.
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DSEI, London, UK. September. 12-15, 2023
DSEI is a four-day international exhibition for civilian and military participants in the defense industry held biennially at the ExCel Center in London. DSEI will attract over 35,000 attendees from over 100 countries and will showcase over 1,000 defense and security suppliers, including all the major prime manufacturers.
We are located in U.S. Embassies & Consulates worldwide and major U.S. cities across the country. Contact us to learn more about how we can assist your exporting business.
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P.J. Menner, Aerospace & Defense Commercial Specialist
U.S. Embassy - U.K., London
PJ.Menner@trade.gov |
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