UK Aerospace Industry
The aerospace sector faces a potential watershed as increasing market globalisation, escalating development costs and the absence of any plans for new design manned fast jet aircraft threatens the continued viability of the UK’s existing design, development and manufacturing capabilities. This will herald a considerable change both for industry and Government, demanding a significant shift in culture and ways of working. As an essential part of future combat air capability, the UK is examining the balance between manned and uninhabited aerial vehicles. Therefore, while there is no current requirement for a newdesign manned aircraft beyond extant plans, future procurements of uninhabited and/or manned platforms are envisaged. However, there is an enduring need to support and upgrade existing and planned fleets of manned aircraft, which are likely to have a service life of at least 30 years. Moreover, in order to preserve the ability of the UK to conduct operations without undue dependence on other nations it will be necessary to preserve a number of capabilities onshore.
Precisely because the current fleet and the new types being introduced are likely to have such long operational lives, the retention of an aerospace engineering and design capability is critical for through-life capability management, in order to provide for maintenance, major upgrade and integration of new weapon systems, avionics and defensive aids. Until now, traditional thinking has linked the phases of design and development inevitably with manufacture. This model now needs to change. The focus must be on through-life capability management and what is required to sustain this critical capability in the likely absence of large-scale manufacture, as these skills can no longer be assumed to be automatically transferred from new aircraft design.
The scale and degree of sovereign support required varies substantially, predominantly by type and use of aircraft. At one level, the UK might need a fit of special equipment to a limited number of aircraft for a specific mission. Alternatively the UK may need to conduct a major re-life program involving structural and mechanical changes as well as substantial and sensitive upgrade to the aircraft’s electronics. There is also a requirement to retain the ability to modify or upgrade aircraft on a case by case basis through-life for specific purposes to match UK Defence doctrine, which may not be reflected by other nations. For example, it is important that a UK-based weapon system integration and system interface capability exists in order to ensure safe operation of any UK air system, including the integration of new technology. Retention of this capability onshore also assists in sustaining an important intelligent customer capability for non-UK designed aircraft. In other areas the UK may be prepared to accept other solutions.
While the UK will have an enduring need for access to world leading technology across the range of aerospace systems, it is neither practical nor affordable to retain all the relevant skills and technologies onshore. Our focus, therefore, is to identify and preserve the key underpinning skills and technologies that will allow the UK to conduct operations and deploy new world-class systems without undue dependence on other nations. The preservation of carefully targeted world-leading skills, techniques and technologies will also allow onshore companies to provide key elements of future collaborative programs, so preserving UK strategic influence on those programs.
Consolidation has become a dominant theme. All tiers of the supply chain have been affected, although at the higher tiers the implications have been more severe. For example, BAE Systems has grown from the merging of 14 aerospace companies within the UK, and EADS combines the capabilities once housed within Aerospatiale, Matra, Dassault (France), CASA (Spain) and DASA (Germany), national companies which themselves were the product of previous mergers. These two companies now dominate the defence fixed wing aircraft market within Europe, primarily via the Airbus Military Company (A400M) and the Typhoon program. EADS also holds a major shareholding in Dassault Aviation, the manufacturer of Rafale. Similarly, BAE Systems holds a 20.5% stake in SAAB AB, the manufacturer of the Swedish Gripen aircraft.
There has been similar consolidation in the defence electronics sector. Following a series of agreements struck with BAE Systems, Finmeccanica has become Europe’s second biggest operator in the defence and security electronics sector, and the world’s sixth biggest through its three SELEX companies2 , and Smiths Aerospace has developed into one of the leading transatlantic aerospace equipment and systems companies, with more than 10,000 staff and nearly $2bn revenues split between Europe and North America.
The role of prime contractor is also changing to one focused more on development of systems architectures facilitating insertion of other suppliers’ sub-systems, rather than vertically integrated models. The UK will need to rely increasingly on specialist contractors for individual sub-systems and components for the insertion of new technologies and capabilities into the aircraft fleets. The major prime contractors are generally, by nature, defence companies and must remain focused on defence markets. They may have adjacent businesses in the civil sector, for example defence and civil aerospace interests, but these are largely driven by different business models. Further down the supply chain there is more scope for leveraging common technology and capability between civil and defence sides of the business and some businesses have highly diversified and often international portfolios. This implies that prime contractors may be more likely to face sustainment issues.
Rolls-Royce is one of the world’s largest military aero engine manufacturers following a number of acquisitions including the US Allison Engine Company and BMW’s aero-engine division. The US companies General Electric and Pratt & Whitney and the French company SNECMA are now the other major players in the industry. Power systems are central in the air, as well as at sea. In this field, Rolls-Royce are a champion within the UK defence industry, and a world leader in aero-engines, marine and land systems. 100% of British major warships and 80% of British aircraft are powered by Rolls-Royce engines.
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