British Firm Aeralis Collapses in Bid for Red Arrows Jet Contract

A British aerospace company vying to build the next generation of Red Arrows jets has collapsed into administration, eliminating about 30 jobs.

Aeralis positioned itself as the only UK firm capable of delivering a new advanced jet trainer designed and built domestically. The company sought a government contract to replace the Hawk aircraft flown by the RAF's Red Arrows, set for retirement in 2030.

Administrators cited a sustained period of cashflow pressure from delays in the UK Defence Investment Plan and geopolitical factors impacting funding sources.

A Ministry of Defence 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."

The BBC learned that Barzan Holdings, the investment arm of Qatar's Ministry of Defence and Aeralis's main backer, pulled funding amid the US-Israeli war with Iran. A prospective deal to produce jets for the French government also fell through.

Aeralis filed for administration on Friday.

Joanne Milner of administrators Buchler Phillips stated: "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."

Chairman Robin Southwell said the move followed careful review of the company's position and recent funding shortfalls. "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."

In a pre-administration interview with the BBC, Southwell called delays in the investment plan very difficult for firms like Aeralis. He pressed the government to provide clarity and direction to the MoD, enabling companies to create jobs, opportunities, ambitions and exports.

Last year's Strategic Defence Review called for replacing the Hawks with a cost-effective advanced trainer jet and urged prioritizing British firms for economic gain. The MoD weighs options, including aircraft from BAE Systems, Leonardo and others, but has made no choices.

The investment plan to enact the review has faced major delays, with Prime Minister Sir Keir Starmer under pressure to release it. This week, he told MPs the plan was being finalized during the King's Speech.

Last month, Lord Robertson, the former Labour defence secretary who authored the review, charged Sir Keir's government with corrosive complacency on defence.

Southwell noted talks with France about local production, but Aeralis preferred designing and making parts at UK sites, with final assembly at Prestwick International Airport in Ayrshire, Scotland.

The firm projected 4,000 new UK jobs and £600 million in annual exports from the program. The aircraft exists only in digital design, pending government support for production.

Justin Bronk, a senior research fellow at the RUSI think tank, described the Aeralis proposal as purely theoretical, appealing mainly for promised UK jobs. "Its downsides include high programme and development risks, and long realistic timeframes until any serviceable aircraft might be delivered, compared to alternatives that already exist," he said. Bronk added that a strong fast jet training pipeline underpins all UK combat air capabilities, so modernization must proceed rapidly with high assurance.

A Leonardo spokesperson said: "We will work with UK industrial partners to provide a compelling, UK low risk solution to the RAF advanced jet training requirement based on our proven and highly successful International Flying Training System."