Going through changes

The UK’s aerospace industry is a national success story, turning over £31 billion annually and providing 128,000 high-value jobs. The anticipated growth in global aircraft traffic during the next 20 years will create demand for more than 33,000 new commercial aircraft worth $5.2 trillion, representing a major opportunity for UK companies.

To achieve this, industry and government have been working closely through the Aerospace Growth Partnership (AGP) to deliver a successful UK aerospace industrial strategy. This is a genuine collaboration providing increased investment in R&D, skills and productivity, all of which underpin UK competitiveness.

Through the AGP a number of initiatives have been implemented to ensure the aerospace industry can thrive. The development of the Aerospace Technology Institute is keeping the UK at the forefront of aerospace technology and innovation; the AGP’s Sharing in Growth Programme (SiG) and the National Aerospace Technology Exploitation Programme (NATEP) are both boosting the competitiveness of SMEs and the wider UK supply chain.

The success of the AGP is being borne out through the industry’s ability to deliver a year-on-year increase in aircraft production with productivity continuing to outpace national levels. The importance of this is best highlighted within the context of the commercial aircraft backlog which globally stands at 13,000 aircraft; worth more than £200bn to the UK’s aerospace industry, and around 9.5 years’ worth of work in hand.

For aerospace, last year’s decision to leave the EU is likely to have far-reaching implications. To ensure UK companies can continue increasing their valuable contribution to national prosperity, industry needs to help and support government in achieving the best deal from Brexit negotiations. The UK needs a relationship with Europe that retains access to the customers, suppliers, skills, R&D and influence that underpins the ability of aerospace to win in tough global markets.

A leading priority for aerospace is ensuring that the UK remains an influential part of the European Aviation Safety Agency (EASA), which certifies the safety of aircraft products for sale. Remaining a member of EASA is a far easier and less costly route than relying on the Civil Aviation Authority to develop the required certification.

The ability for UK companies to participate in EU R&D projects gives them a significant advantage in the global marketplace. The opportunity for collaboration, alongside access to funding and facilities, ensures UK companies can maximise connections to customers and suppliers.

Collaboration with European partners helps UK technologies to be highly competitive in the global market. Pooling expertise and funding, which the UK does not have access to on its own, develops technologies which can compete with products from established and emerging markets.

New customs and border controls are likely to increase administration costs and disrupt closely integrated supply chains. Negotiations should seek to ensure that the UK can retain membership of the Single Market or, at the very least, retain a customs union relationship with the EU.

Whatever shape Brexit takes, on exiting the EU, UK industry will need a transition period to manage the inevitable commercial consequences. The harder the Brexit, the greater the commercial risk, and so the longer that transition would need to be. To ensure industries with pan-European supply chains and customers do not lose global competitiveness the UK needs to use the two-year period following Article 50 to agree transition arrangements until a comprehensive Brexit deal is in place.

In the interim the pragmatic response means looking beyond political rhetoric and focusing on achieving the economic momentum and sustained investment needed so that UK companies thrive in a highly competitive global market.

www.adsgroup.org.uk