Paris Air Show 2025

The grandeur of the Paris Air Show 2025, while perhaps more subdued on the commercial deals front this year, has once again underscored the dynamic nature of the global aerospace industry. 

For UK businesses, the event served as a crucial bellwether. A strong marker for aircraft orders and also the growing importance of the defence sector to the nation’s economic prosperity.

Airbus Leads Muted Deal-Making

Airbus has been steadily racking up commercial orders, reaching an estimated $21 billion in firm and provisional deals. Highlights include a significant order for 10 long-haul jets from Taiwan’s Starlux Airlines and confirmed sales of two A350 freighters to MNG Airlines. This is on top of six A350-900s for EgyptAir.

This year’s commercial announcements were notably more restrained, partly due to Boeing’s decision to scale back new sales announcements following a tragic Air India 787 crash. 

Growing Demand

Despite the sombre tone, Airbus CEO Christian Scherer expressed confidence in growing demand, even hinting at higher dividends. The expected blockbuster deal with AirAsia, involving 50-70 A321XLRs and 100 A220s, didn’t materialise at the show but remains a strong prospect for the coming months.

Embraer also made its mark, securing an order for 60 E175 regional jets from SkyWest Airlines, with options for a further 50. Analysts noted a “different show” this year, with less focus on massive, headline-grabbing civil orders and more on strategic engagements.

A positive sign for manufacturers grappling with post-pandemic supply chain issues is Airbus’s report of a 40% reduction in production disruptions caused by delayed components since early 2025. This indicates a gradual easing of the pressures that have hampered  aircraft deliveries.

Defence Fueling UK Economic Growth

While commercial aviation garners headlines, the Paris Air Show also shone a spotlight on the critical and growing role of the defence sector. For the UK economy, the impact is profound and already being felt.

Recent research by Oxford Economics, in its ‘BAE Systems Contribution’ report, reveals that the UK government’s ambition to deliver a ‘defence dividend’ is taking effect. In 2024 alone, BAE Systems contributed a staggering £13.7 billion to the national GDP, accounting for an impressive one in every £200 of the UK’s total economic output.

UK Strategic Defence Review

This report comes on the heels of the UK’s Strategic Defence Review, where the Prime Minister outlined a plan to create “a defence dividend – that will be felt in the pockets of working people and the prosperity of the country, securing growth for generations to come.”

As Charles Woodburn, CEO at BAE Systems, emphasised, their work “delivers so much more” than just advanced defence capabilities. “We fuel economic growth, creating jobs and prosperity, with the impact extending far beyond BAE Systems to the thousands of companies we work with right across the UK, helping to support growth and a robust, resilient and innovative UK defence industrial base.”

UK Industrial Strategy

The UK government’s Industrial Strategy positions defence as central to both national security and economic growth, aiming to harness innovation and industrial power. BAE Systems is already delivering on this vision by:

• Supporting over 159,000 full-time equivalent jobs across the UK, including nearly 50,000 within its own operations.
• Driving economic activity through a vast UK-wide supply chain, collaborating with 5,800 UK suppliers and spending £5.8 billion, thereby supporting jobs nationwide.
• Creating opportunities in areas of highest need, with over 40% of its UK workforce residing in the most deprived fifth of local authority areas and directing £1.3 billion in spending to businesses within those regions.

Furthermore, BAE Systems is making significant investments in skills development, a crucial element for long-term growth. In 2024, the company invested £230 million in education and training, including over £150 million for 4,650 apprentices and nearly £50 million for graduate training. This direct support aligns perfectly with the government’s vision for job creation, skills development, and industrial capacity growth.

Looking Ahead

The Paris Air Show 2025 highlights a nuanced global aerospace market. While commercial aviation navigates its recovery and adapts to supply chain improvements, the defence sector is emerging as a powerful economic engine for the UK. All of this is great news for the aerospace supply chain here in the East Midlands.

The significant contributions of companies like BAE Systems underscore how investment in national security directly translates into jobs, economic activity, and a robust industrial base across the country. For UK businesses, understanding this dual dynamic – evolving commercial demands alongside the strategic importance of defence – is key to navigating the future of aerospace.

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