SFO shows its metal with £497m fine for Rolls-Royce
Black cloud over engine manufacturer should now start to lift
The Serious Fraud Office’s (SFO) five year investigation of Rolls-Royce has finally come to a conclusion, with a verdict that shows the SFO is getting tough on corruption, but one which should hopefully allow the dark cloud over Rolls-Royce to start lifting.
Read more...New tanker and fighter jet ready for take off
F-35 declared combat ready and KC-46 ready to enter production
August may traditionally be the month of days spent by the beach and long summer evenings, but it seems life has been somewhat busier at Lockheed Martin and Boeing in August 2016. Last month saw the companies achieve major milestones for the F-35A and KC-46 tanker respectively. The F-35A has now reached Initial Operating Capability (IOC) and the KC-46 has been approved to enter production. These are significant achievements because the products have both had eventful development phases and both aircraft should be important drivers of profitability going forward, at not only the prime manufacturers but for suppliers as well, notably BAE Systems with its significant programme share.
Read more...What does the future hold for NATO?
Trump and Corbyn refuse to support Article 5
9/11 was the first time that NATO’s article five – an attack on one member state is an attack all – had been invoked. It sent a powerful message about the strength of the alliance. Every member of NATO, no matter how small, provided assistance to the United States during the campaign in Afghanistan. Fifteen years on and the alliance is arguably in its weakest position since its formation in 1949. Politicians in six major member nations have questioned the point of NATO and only five of the twenty-eight states spent the guideline 2% of GDP on defence. Could this be ‘make or break’ for NATO? And if so what could this mean for the defence industry?
Read more...The rise of the activists
A look at the impact of activist investors on the Aerospace and Defence sector
Last week it emerged that the activist investor, Elliott Capital Advisors, now holds a 5% stake in Meggitt. This makes Meggitt the third European Aerospace & Defence company to have such an investor on its shareholder register and it led me to ponder what is driving these activists? Why the interest in Aerospace and Defence? And what are they trying to achieve?
Read more...Geared Turbofan engine too hot to handle?
Teething problems for Pratt & Whitney's new narrowbody engine
Pratt & Whitney’s struggles to deliver correctly functioning Geared Turbofan engines for Airbus A320neo aircraft is a reminder that aircraft development is always fraught with risks. Airbus clearly signposted in January that 2016 neo deliveries would be back loaded into the second half of the year. It is targeting 56 aircraft this year but as of the end of July has only delivered 11, so it has its work cut out in Toulouse. Where has it gone wrong?
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Have you heard of GKN?
Making things work for more than a quarter of a millennium
Watching a BBC documentary of a behind the scenes look at the opening ceremony of the 2012 Olympic games reminded me of how the industrial revolution was a centre piece of the performance, creating the illusion of the Olympic rings being forged from steel. Had it happened back in the latter part of the 18th century as new processes changed Britain for ever, those rings may well have been forged in iron by one of the UK’s greatest global brands. GKN’s forebears have been making things happen for over 250 years and the company Guest, Keen & Nettlefolds was formed via merger in 1902. The company is one of our leading global manufacturers, and yet it is hardly a household name.
Read more...The end of the road for the A380?
A look at why the business case for the A380 has gone wrong
Airbus launched the A3XX aircraft (which would become the A380) in 1997 based on winning 650 orders over the next twenty years. It claimed to be in consultation with 20 leading airlines about their requirements for a new double-decker aircraft. Nineteen years on, the A380 has won just 319 orders from 18 airlines. So where has it all gone so wrong for what is Airbus’ flagship aircraft? In addition, with the announcement last week at the Farnborough Air Show that the production rate has been cut to twelve per year, what does the future hold for the programme?
Read more...The rain fell mainly on the planes
Farnborough Airshow 2016 rant, sorry round up
When considering my view on the Farnborough International Airshow 2016 it is tempting to focus on the chaos of the first couple of days at the show. Monday’s washout was spectacular, and when we were eventually cleared from the site at around 5.30pm there was hardly anybody left. Even the ice cream van had gone home!
Read more...Can aerospace & defence weather Brexit
Impact of lower GDP growth on the aerospace & defence industry
I am a firm believer that GDP growth is the most important driver behind the health of the aerospace & defence sector. A strong economy increases people’s propensity to travel, and defence budgets are set as a percentage of GDP. I acknowledge that the two sides of the sector are both affected by a number of other factors (the oil price, new technologies, geopolitical tensions, etc) and both industries are global. However, the Treasury’s projection that in two years’ time UK GDP will be 3.6% lower than if we had remained in the EU forces me to pause for thought as to the possible impact of Brexit on the sector over the long term.
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