With no deal estimated to mean billions of pounds in extra costs, here’s what firms are doing

The British aerospace sector is bracing for a no-deal Brexit, which it estimates could mean billions of pounds in extra costs.

The impact on some goods could equate to 38% of their sale value, according to one no-deal Brexit scenario modelled by ADS, a lobby group for the aerospace and defence sectors.

The group estimates that new customs checks alone will cost an extra £1.5bn per year. While tariffs are less of an issue for the sector, as most finished aerospace parts are not caught by the levies, import VAT and tariffs on generic parts and raw materials could still add significant costs.

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That scenario also includes customs checks taking only 70 seconds per vehicle, which the Department for Transport estimates could cause six-day delays at the border.

“When you’re selling an aircraft you can’t have any parts missing,” the chief economist at ADS, Jeegar Kakkad, said. “One part stops the whole process.”

The output of British aerospace manufacturers fell for the first time in four years in 2018, according to the Office for National Statistics, with concerns around global growth as well as Brexit clouding the outlook.

Airbus, one of the UK’s largest aerospace employers at its wing factory and design centre, has warned that a no-deal Brexit could cost it €1bn (£875m) per week, while indicating that it could leave the UK altogether in the event of a disorderly departure. Kakkad added that smaller suppliers are likely to be more vulnerable to problems with cashflow.

The aerospace and defence sectors together employed more than 260,000 people in Britain in 2017, according to ADS figures but future expansion by non-British companies could be threatened if new frictions are introduced in the trade between the UK and the EU.

Kakkad said: “The issue isn’t about what we have now; it’s if we look halfway through the next decade when decisions are being made on the next set of wings; the next supply chain.”

Airbus

Facebook Twitter Pinterest The Airbus chief executive, Tom Enders. Photograph: Guillaume Horcajuelo/EPA

Rolls-Royce

BAE Systems

Facebook Twitter Pinterest Staff work on the Eurofighter Typhoon at BAE Systems’ Warton plant near Preston. Photograph: Phil Noble/Reuters

Bombardier Aerospace

Facebook Twitter Pinterest The Bombardier Aerospace plant in Belfast. Photograph: Brian Lawless/PA

Boeing

Babcock

Facebook Twitter Pinterest An attack submarine at Devonport, Plymouth, where Babcock works in partnership with the MOD and the Royal Navy. Photograph: David Levene/The Guardian

Cobham

Leonardo

Safran

Facebook Twitter Pinterest A technician works on the foundry wax production line for cluster assembly preparation at the Safran Aircraft Engines plant in Gennevilliers, France. Photograph: Benoît Tessier/Reuters

Lockheed Martin

Meggitt

Melrose

Facebook Twitter Pinterest Melrose took over GKN in 2018. Photograph: Hannah Mckay/Reuters

GE Aviation

QinetiQ

Facebook Twitter Pinterest QinetiQ scientific equipment in a laboratory. Photograph: PR handout

Marshall

Thales