Despite scoring exceptionally well in the labor sector, the poor infrastructure and geopolitical risk involved, could impact future investments. Over the last few years, the aviation and aerospace industry has seen through a period of turbulence. The skyrocketing fuel prices and growing competition forced many companies to reduce their profit margins
FREMONT, CA: A recent report that assesses the attractiveness of aerospace manufacturing investments by nations ranked the U.K. in 4th place, making it the only European country among the top five. The U.S. topped the list, followed by Canada, and Singapore. Australia finished 5th on the list. The list critically analyzes multiple factors like cost, labor, infrastructure, industry, geopolitical risk, economy, and tax policy.
Despite scoring exceptionally well in the labor sector, the poor infrastructure and geopolitical risk involved could impact the future investments. Over the last few years, the aviation and aerospace industry has seen through a period of turbulence. The skyrocketing fuel prices and growing competition forced many companies to reduce their profit margins. The fall in oil prices and increasing demands from emerging markets aided the aerospace industry to return to normalcy. Lower commodity prices made flying cheaper than ever before; something consumers subsequently benefitted from.
The U.K. government seized on this opportunity and introduced multiple schemes and policies to promote investments in the aerospace sector. The government backed the new Future Flight Challenge initiative with a funding of USD 160 million. The initiative was directed towards the development of new technologies such as drones and urban vehicles. Despite the sustained economic and political turmoil that Britain has undergone, these initiatives played a significant role in establishing the U.K. as a major aerospace manufacturing nation.
Currently, the U.K. has one of the most strong aerospace and defense industries in the world. With annual revenue of nearly USD 46 billion, the U.K. aerospace industry stands above the rest of Europe. Recently, the U.K. Defense Ministry announced a USD 2.5 billion funding through 2025, for the next generation of British fighter jets, the Tempest. Britain is also looking for other partners to invest in this project, which would further strengthen the aviation and aerospace industry.
Britain's ability to access skilled labor, well-maintained infrastructure, and a developed and mature overall A&D industry places them over the other European countries. Both the U.S and Canada are geopolitically stable, and Singapore has one of the lowest tax rates, putting them ahead of the U.K. Unlike the other nations, Britain's aviation and aerospace industry is an export centric one. Unfortunately, Brexit is likely to affect the industry in the future adversely.
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