The last Farnborough 2016 Air Show, which took place immediately after Brexit, was also an opportunity for the UK’s aerospace sector to send a message of total confidence to the market: nothing relevant is going to happen in the industry, and investments are safe and welcome.
In my opinion, Brexit may have a significant long-term impact on the European defense sector, especially for the air forces.
It is well-known that there are numerous inefficiencies in the European defense industry. The great advantage of the US is that the whole industry is under the scope of the same government, directing the efforts in the same direction (another story would be if that direction is right or wrong), and giving a sense of strategy which is under a single flag.
In Europe, all nations consider defense as a strategic issue, and depending on budgets, history and politics, strategic national defense companies can be found in France, Germany, Spain, Italy, dedicated to the same products, but in an independent way.
About four years ago, there was a big opportunity to create a big champion in the European defense industry with the merger of EADS and BaE Systems, which finally failed due to the political interests of governments. BaE is probably the most powerful defense company in Europe, with a strong presence in the US market, and the merger could have been an ultimate step in the consolidation of a strong world-class giant of the defense industry.
Instead, Europe has evolved to the idea of a European Defense Agency (EDA) that will try to standardize requirements and eliminate industrial inefficiencies by organizing a currently atomized sector and individual national interests of the different countries. To summarize briefly: if the sector cannot join forces at company level, let’s create a supranational organization to align interests.
Fine. But separating the UK from the equation implies leaving out one of the most powerful pieces of the puzzle, and this can lead to further inefficiencies, complex interest maps, and eventually, a more fragmented European defense strategy.