UK aerospace – Navigating transition and positioning for growth
Rahid Rashid, 16 October 2025
Rahid Rashid, 16 October 2025
The UK aerospace industry is entering a period of significant transition. Long recognised internationally for its strengths in innovation, engineering and advanced manufacturing, the sector now faces a new wave of pressures and opportunities.
Global events are reshaping demand, from rising defence spending in response to geopolitical instability to the growing urgency of meeting net zero commitments.
At the same time supply chain fragility and workforce challenges are testing resilience within many companies.
Considering the impact of these factors on corporate finance, we believe that the market will remain fairly robust as companies continue to pursue strategic investment, acquisitions and partnerships will play a crucial role as companies reposition for the future.
One of the strongest drivers of activity is defence. The wave of conflicts taking place worldwide has led to a surge in weapons production, particularly unmanned aircraft and the components linked to them.
Examples of this include the Global Combat Air Programme, a new collaboration between Italy and Japan to develop a sixth-generation fighter jet, which promises long-term contracts within the UK supply chain.
At the same time commercial aviation is evolving under the weight of net zero targets.
Airlines are under pressure to reduce emissions, creating demand for sustainable aviation fuels, hydrogen propulsion and lighter, more efficient aircraft.
The UK government has backed this transition with a £250 million funding pledge to support clean aviation technologies and supply chain development.
Specialist innovation in composites, sensors and digital technologies, such as predictive maintenance continues to open new niches for smaller firms as well.
Where next? Well, there is a growing interest in the space economy, as private business continues to expand in launch programmes, many of which require the UK’s aerospace expertise.
The opportunities are significant but so are the obstacles. Businesses in the sector must contend with:
Despite the challenges, aerospace remains one of the UK’s most strategically important industries. For buyers and investors, the focus should be on businesses that can align with government priorities in defence and decarbonisation, while managing supply chain and talent risks.
If you are considering investment, acquisition or restructuring in the aerospace sector, get in touch with Partner, Rahid Rashid (rahidrashid@lubbockfine.co.uk) to understand how to navigate the risks and position your business for long-term growth.
