Will Airbus Still Make Wings In The UK After Brexit?

Airbus has significant history and operations in the United Kingdom, dating back to the creation of the company. Recent political events however, namely the UK’s departure from the European Union, have called into question the company’s footprint there. Although nothing can be certain regarding the future of Airbus UK, the company is nonetheless concerned by Brexit.

Rolls-Royce Trent XWB on the Airbus A350-941
Core components of the Airbus A350 such as the wing and Rolls Royce Engine are manufactured and assembled in the United Kingdom. Photo: Julian Herzog / Wikimedia Commons

History and extent of Airbus in the United Kingdom

Since Airbus’ first project, the A300, the UK has been involved in the European aerospace enterprise. Although the level of UK involvement fluctuated over the years, Airbus UK was formed in the 2000s. The wholly-owned Airbus subsidiary specializes in the production and assembly of wings, among other core-components.

According to the company, Airbus employs 14,000 people at 25 sites and contributes £7.8bn to the UK’s GDP. Moreover, the company engages with thousands of UK suppliers, such as Rolls Royce, and has made significant investments in research, education, and development.

Brexit concerns

” We continue to look for further clarity, and the removal of uncertainty, as soon as possible, so that Airbus, like every business in the UK, can properly plan for the future” – Airbus Spokesperson

Featured Video:

When the United Kingdom held a referendum on its membership of the European Union in 2016, Airbus explicitly stated its preferences for continued EU membership. According to a publication by The Telegraph, the company even backed the official pro-EU campaign.

Airbus A300 Farnborough Air Show, 1986
Airbus has made many announcements at the Farnborough Air Show in the UK. This A300 demonstrator (1986) is only one example, and is accompanied by the A318, A340-200, and A380, among others. Photo: Ken Fielding/ Wikimedia Commons

Worried, and perhaps even unsettled by the result of the referendum, Airbus has published a Risk Assessment outlining the company’s concerns. The document, which underscores the company’s increasing concern “by the lack of progress on the Brexit process”, is broken up into ‘no deal’ and ‘orderly exit’ scenarios.

No deal

“we remain concerned by a potential ‘no-deal’ and continue to plan for that scenario as that is the only way any responsible business can plan” – Airbus spokesperson

In the case of the former ‘no deal’ scenario, Airbus foresees significant disruptions to its supply chain and production processes. In turn, the company predicts that delays and associated penalties will ensue a financial prejudice amounting up to €1bn of weekly losses in turnover.

German Air Force Airbus A400M
Airbus UK’s Filton site also assembles the Airbus A400M wing, as seen on this German Air Force (Luftwaffe) example. Photo: Julian Herzog/ Wikimedia Commons

As for UK investments and operations, the Risk Assessment states that a no deal scenario will “force Airbus to reconsider its footprint in the country [… and that] key competencies [will be] grown outside the UK”.

Orderly transition

As for an orderly transition, Airbus, like many commercial entities, would certainly prefer this option to no deal. That said, the company foresees significant amounts of risk associated with Brexit, especially the transition process.

Moreover, the risk report remains bearish on the consequences of Brexit post-transition.  indicating that Brexit might invariably increase costs and complexity for all operations.

The future of Airbus UK and its wings

While one can only speculate on the future of Airbus UK, the Risk Assessment, from 2018, is not particularly optimistic. While the tone of the Assessment may in itself be a public relations tactic, the use of the phrases “reconsider’ and “refrain”, in the context of investments and operational footprint, may be telling.

Airbus Wing in sunset
With increasing geopolitical uncertainties, will the sun set on Airbus’ British operations? Photo: islandjoe/ Wikimedia Commons

From an operational perspective however, Airbus may not have much choice on where its wings are produced. According to the 2018 Risk Assessment, the manufacturer’s “industrial capabilities are already running at full capacity”.

Given that aerospace is a capital-intensive industry, it is unlikely that Airbus could relocate the production of its wings, among other parts, in the near future. Let alone, during the Brexit transition period.

What do you think future holds for Airbus UK? Will the European manufacturer relocate its production sites? Will the UK provide key economic actors more assurances on the post-Brexit future?

24 comments
  1. They will. It is not so easy to start manufacturing wing elsewhere.
    It is about politics. So when the brexit will be done, then airbus has to deal with their government and the eu, what will be next.
    I think both side would like to maintain it like it is right now, so nothing will change.
    But when from some reason it will be much more expensive, then yes, they will start to build a new plant in EU.

  2. I don’t Believe it!

    The actual relocation called plan “Icare” by Airbus will be in France and Netherland.

    Brexit created some crack in did! it is so sad…

    We hope that the turbine from Rolls Royce will not move too, like the ” smoke ” is on !

      1. While some people “enjoyed” your article, I found it full of inconsistencies and written by somebody who HAS NO IDEA of facts. Firstly you say of Airbus “the company predicts that delays and associated penalties will ensue a financial prejudice amounting up to €1bn of weekly losses in turnover”. In 2018 their TURNOVER was €64bn for the whole year. Therefore this is obviously a stupid figure. Secondly regardless of how BREXIT happens, Civil Aviation goods are subject to 0% tariffs while trading under WTO rules. Therefore the wings manufactured in the UK and the engines also for the A350 are unaffected whatever the outcome may be. That is why Rolls Royce engines or any other UK manufactured parts on the 787 are not subject to tariffs also by the USA. This article has been written without fact checking and pandering to Tom Enders scaremongering on behalf of the German Government. When you ask Guillaume Faury the same question he will answer it truthfully as he already has done. He basically made it clear that BREXIT does not affect Airbus commercial aircraft programmes.

        1. Dear Mr. Dogg,

          Thank you for your comments, I am sorry to hear that you were not satisfied with the content of the article.

          While I reject any attacks on my person or my knowledge of “facts”, I would like to clarify some of the points you have brought up.

          On your point regarding turnover. Indeed, Airbus made €64bn in Revenue in 2018 per the latest financial results. While the terms “revenue” and “turnover” can be used interchangeably, it is my understanding that the use of turnover in the Brexit Risk Assessment refers to the utilization of assets (cash, labor, and inventory) not, revenue.

          To quot the Risk Assessment ( bottom of page one, link found in the article):

          “Every week of unrecoverable delay would entail material working capital impact, re-allocation cost, cost for inefficient work, penalty payments to customers and up to €1B weekly loss of turnover.”

          I apologize if my interchangeability of the words “of” and “in” caused any confusion – this was certainly not the intention.

          As for your second point, while civil aircraft components may be subject to WTO overview and tariff scheme, a point that Airbus has underlined is the regulatory and certification issues concerning products made outside EASA member states. Should the UK leave the EU without EASA membership or a regulatory scheme mirroring EASA regulations / certifications, the costs for the manufacturer could be significant. This will likely be true for all UK based suppliers.

          As for your third point and my supposed “pandering to Tom Enders”, I can assure you that this was most definitely not my intention, and reject any such presumptions. Concerning Mr. Faury’s comments on Brexit, i would refer you to our article on the matter found here: https://simpleflying.com/airbus-brexit-position/

          Again, I would like to apologize if you were not satisfied with the article. I can however assure you that we strive to produce nuanced analysis based on the information available to us. In an effort to improve our work, we continually welcome any feedback you may have.

          Best,
          Thomas

          1. The risk to Airbus of a “No Deal” Brexit is in military and non-civil aviation manufacturing and NOT civil aviation. I am an Airbus employee at Broughton wing factory. Everything here falls under CIVIL AVIATION. Those Belugas will continue to land here, collect wings and return to France/Germany without any hindrance whatsoever. Airbus have upgraded the runway here for the Beluga XL and spent millions on upgrades. This is because here in Broughton we know that a “no deal” Brexit has no bearing on Airbus operations except for a customs declaration. It is a 2 x A4 document that takes 5 minutes to complete and is handed to the each Beluga crew. Regarding EASA. This is NOTHING to do with the EU. The EU has 28 member states. EASA is a separate entity with 32 member states. Thomas….you really do need to do some homework on the subjects that you write about!!!

  3. Businesses generally don’t like to be totally reliant on a single supplier, because it makes them vulnerable; and, yet, this is exactly the situation that has arisen as regards Airbus wings. In this case, the supplier is a country rather than a company, but the vulnerability is just as valid. Some examples:
    – Thailand produces 25% of the world’s hard disk drives (HDDs). When Bangkok experienced severe monsoon flooding in 2011, and several HDD production facilities were affected, the worldwide price of HDDs increased by more than 100% for a period of two years.
    – China produces most of the world’s rare earth metals. The recent trade dispute between China and the US has revealed this severe point of dependency, and various countries are now looking at the possibility of re-commencing old mining operations in their own territory so as to create some measure of independence.

    It’s frightening to think that every Airbus plane relies on a key component that is currently manufactured in only one country (the UK), and that the country in question is openly acrimonious toward the EU. Remember that UKIP won the UK’s European Elections, that it’s the largest national political party in the European parliament, and that its members literally turned their backs on the rest of the European parliament last week. Boris Johnson is openly hostile toward the EU, and is quite capable of abandoning logic in his Quixotic quest to re-instate the “Rule Britannia” era of UK history. What could he do? Well, for example, Japan is considering putting hefty export duties on certain goods exported to South Korea…Boris might take a leaf from that book.

    In my opinion: Airbus urgently needs to start some wing manufacture outside the UK, e.g. in Hamburg.

    1. Dear Nigel,

      I agree with your comment above.

      Indeed, businesses take a risk when being overly reliant on a particular supplier/ geography/ country, etc. However, that centralization can lead to efficiencies and economies of scale. Airbus seems to have found itself in a (previously) commercially excellent position which has unfortunately been threatened by political events.

      I’d be surprised if the UK put export duties on key manufacturing. Certainty, such an economic policy would be counter to any sound strategy put forth by the Secretary of State and the PM’s office.

      We will be sure to follow up on things to come.

      Best,
      Thomas

      1. Hi Thomas,
        Although many people might think that it would be illogical for the UK to apply export tariffs to aircraft parts, I concurrently think that most Europeans have given up any expectations of logic when it comes to the UK’s Brexit behavior. A cornered cat can do strange things! If a future UK government is finding it tough to negotiate favorable deals, then they may resort to draconian measures. We have many examples in recent months of a confrontational approach to trade issues, where actions seem to be determined by short-term thinking; in the long term, this may lead to “the child being thrown out with the bath water”, but time will tell in that regard.
        Note that we do actually have somewhat-related precedent in this matter, with regard to the US trade embargo against Iran. Although that embargo hurts Boeing (several billion dollars of orders from Iran), the US State Department nevertheless thinks that it serves a greater interest. An export prohibition is just a more severe version of an export tariff.

        1. Nigel you are now going miles off subject. Far from being a cornered cat, the situation regarding Brexit is the most crazy game of poker. The player with the very clear winning hand has been convinced by the player with the bum hand that they have a better hand even though the UK can see they have the best hand. The EU have become emboldened by all the brainwashed remainers. How do Singapore, Australia, New Zealand, Canada and so many other countries have such a great standard of living yet they are many places down the table from having the 5th largest economy in the World? And Remainers are convinced the UK cannot somehow stand on its own feet! The mathematics behind the EU is that we get a BUM DEAL. The “free trade” or “single market” value has been way overstated when you consider the economic and social cost of unrestricted free movement from the EU. It is an undemocratic gravy train. The EU was formed as a free trade zone and not a Federal Europe. The Irish and a few other countries are getting so brazen as they think the EU has their backs. They clearly don’t want to have to be net contributors into the EU fund for the 1st time in their lives! The threats from the EU are becoming more obvious by the day. A 2nd referendum will be won by LEAVE by an even greater margin. Roll on Brexit!

    2. Nigel…..Firstly Airbus is NOT the EU. The UK is not acrimonious to Europe…they are just wakening up to the undemocratic EU that is a supposed economic block within Europe. Why should the UK pay towards infastructure upgrades to Ireland, Romania and God knows how many other EU countries? The ‘benefits’ of being in the EU are certainly lost on the UK. Secondly the UK as a country does NOT produce the wings….the wings are produced in the UK by Airbus employees. You seem to have overlooked totally the A350 with its sole supplied Rolls Royce engines. Except it is not a vulnerability and nor can Airbus suddenly go to a US supplier as buying US is no different from buying UK is it, and GE are totally in bed with Boeing. Last but not least I will draw your attention to the shareholder structure of Airbus. While the French Government own 11.1% and Spanish Government 4.16% and German Investment funds on behalf of German Government own 11.0%, a GRAND TOTAL of over 43% of Airbus is owned by UK investment and Pension funds via the city of London on behalf of UK based individuals. Maybe you need to process this info into all the nonsense that you currently come up with. Also read my response further up to the writer.

      1. Thanks for that pro-Brexit rant…it was thoroughly enjoyable 🙂
        The WTO agreement that you refer to relates to IMPORT duties…not to EXPORT duties.
        And I didn’t overlook the RR engines issue…but the article is about wings, not engines.
        Perhaps a cup of camomile tea would be a good idea?

        1. The US have imposed tariffs on China and China have acted in return. Civil aviation is not included as it is exempt from WTO tariffs with the exception of clear state subsidy. It would be counter productive for the US to start imposing tariffs on Airbus as there are many US made parts. Secondly Donald Trump is pro-UK so is going to think hard about hurting UK jobs. For your info…Donald Trump is a UK passport holder along with his US nationality. If your imagination thinks there is a possibility of a circumstance change you seem to somehow ignore the fact that the A320 series is 100% reliant on US engine input along with Avionics. That is Airbus’ cash cow. Remainers seem to shut down when confronted with facts just like you have. with your last answer.

          1. It seems that you’re a little behind on your reading, so here’s some enlightenment for you:

            https://www.aerotime.aero/aerotime.team/22543-us-eu-threaten-tariffs-amid-airbus-boeing-dispute

            https://jonostrower.com/2018/04/us-proposed-tariffs-china-imports-includes-aerospace-products/

            Anyway, there’s no need for concern, is there? As you know, there are LOADS of other industrial employers in the Broughton area…so, if Airbus pack their bags and leave, I’m sure you’ll easily get a new position elsewhere.

        2. The threat of US tariffs on Chinese aerospace goods falls into the category of state aid. The Chinese aircraft manufacturer COMAC is state owned. Its a viable reason. Airbus no longer falls into that category as it is not state owned. Secondly regarding my job at Broughton. Airbus will not shift production. You can convince yourself all you like but I have already explained on this thread that 43% of Airbus shares are held via Investment and Pension funds via the city of London on behalf of UK individuals which means that should Airbus decide to do a move out of the UK that doesn’t make sense, they could and WILL be held accountable at their AGM by the Fund managers for wasting money due to a false pretence. You can keep trying mate. Your stance is made on assumptions. Mine is made on FACTS!!

        1. You must be referring to the ignorance of this Nigel chap. He has totally failed to grasp that there are NO tariffs on civil aviation FULL STOP regardless of EU. That is why Air France are able to buy Boeings with GE engines and not suffer import duties from the EU. A remainer (Remoaner) who totally doesn’t have a clue!! And for your info i’m an Airbus employee at Broughton. Anything else Nigel needs schooling on??

          1. It seems that some people don’t realize that what applies today needn’t necessarily apply tomorrow.
            For example, a few months ago there were no mass US tariffs on Chinese goods, whereas today there are!
            Isn’t it amazing how things can change in a short span of time?!

    3. Referring back to your comment above about how businesses don’t like to be reliant on a single supplier. Did you totally overlook that Airbus is NOT reliant on a single supplier for its wings? It actually makes its own wings IN HOUSE at Airbus facilities in Broughton. What you means can be considered in the context of the engines on the NEO’s. It amazes me how people like you who have no clue come on here attempting to add your tuppence worth except it isn’t even that…it is ZERO worth as you haven’t got facts correct. You along with many millions of other Remoaners are frustrating the democratic will of the UK on the basis of info that is downright incorrect.

  4. I wonder if things would change if the UK created a tax free zone for all aircraft manufacturing, would Airbus consider creating a final assembly plant at Bristol if they did not have to pay any corporate taxes on their profits of such a business ?

    1. Change like what? Airbus won’t be leaving the UK. If you read the replies to this thread you’ll realise it’s all scare stories. Besides Airbus already pay the lowest taxation in the UK of all their plants…maybe with the exception of Mobile in Alabama.

      1. Obviously I forgot the stupid plant in China that gives away technology and know-how to the Chinese for free. You couldn’t make it up.

Leave a Reply

Your email address will not be published. Required fields are marked *

Recommended Stories: