Aeralis aerospace company falls into administration

Aeralis was banking on winning a UK Government contract to replace the Hawk jets currently flown by the RAF’s Red Arrows, which are set to retire in 2030.

The company had pitched itself as the only British firm capable of supplying a UK-designed and built advanced jet trainer.

However, around 30 jobs have now been lost after the company entered administration following a period of financial difficulty.

Joanne Milner, representing administrators Buchler Phillips, said: “Aeralis has developed a highly differentiated proposition within the aerospace and defence sector.

“We hope that the administration process will provide an opportunity to explore routes to preserve and develop that value for stakeholders.”

Aeralis chairman Robin Southwell said the decision to go into administration had been taken after “careful consideration of the company’s position and the funding challenges it has faced over recent months”.

“We will continue to support the joint administrators as they explore viable, sustainable options for the future of the business and engage with interested parties,” he added.

Why did Aeralis fall into administration?

BBC News reports that Aeralis’ main investor, Barzan Holdings, the strategic investment and procurement arm of Qatar’s Ministry of Defence, withdrew its funding amid the US-Israeli war with Iran.

Administrators shared the company had faced “a sustained period of pressure” on its cashflow after “continued delays to the UK Defence Investment Plan, combined with geopolitical factors affecting sources of funding”.

The Ministry of Defence (MoD) confirmed that the jet trainer procurement process is still underway.

An MoD spokesperson said: “The fast jet trainer programme is ongoing and no final procurement decisions have been made.

“More broadly, this government is backing British jobs, British industry, and British innovators – since July 2024, we have signed 1,200 major contracts, with 93% of the spend going to UK-based companies.”

Aeralis estimated that its programme could have created 4,000 new jobs in the UK and generated £600 million in annual exports.

However, the design remained digital-only, pending government support to move into production.

The company had planned for parts of the jet to be designed and manufactured at sites across the UK, with final assembly at Prestwick International Airport in Ayrshire, Scotland.

Last year’s Strategic Defence Review recommended that the RAF’s ageing Hawk jets be replaced with a “cost-effective, advanced trainer jet,” and advised that MoD procurement should benefit UK businesses.

In an interview prior to the company’s collapse, Mr Southwell urged the government to provide direction to help unlock industry growth.

Other contenders believed to be in the running to supply the next trainer aircraft include BAE Systems and Leonardo.

Aeralis had also explored producing jets in France but had prioritised a UK-based model focused on jobs and exports.