In an industry first, Britten-Norman, the UK manufacturer of the Islander aircraft, and Cranfield Aerospace Solutions (CAeS), the UK pioneer in hydrogen-electric fuel cell propulsion technology, have signed a heads of terms agreement, signalling their intention to merge and create the world's first fully integrated, zero-emissions sub-regional aircraft for entry into service in 2026.

The merger is due to be completed in mid-2023, subject to final due diligence. In a funding round led by HydrogenOne Capital Growth, a consortium of CAeS investors comprising HydrogenOne, Safran Corporate Ventures (the corporate venture arm of Safran, a leading aerospace company) and the UAE-based investment firm Strategic Development Fund (SDF) will invest up to GBP10 million in the new company, including up to GBP5 million investment from HydrogenOne once the merger is finalised. Cranfield University and Motus Ventures will continue to retain shares in the new business. Britten-Norman's existing owners, including lead investor Alawi Zawawi, will also join the new business. The investment will anchor further funding that is currently being raised to support the growth of the merged entity.

The new entity is responding to the growing demand from airlines and operators for an OEM-backed aircraft that will enable the move to zero-emissions operations. By combining CAeS's pioneering development of a hydrogen-electric fuel cell propulsion system with the existing and proven Britten-Norman aircraft technology, a clear and unambiguous route to market has been created with certification for passenger-carrying service planned for 2026.

The Britten-Norman Islander, a nine-seat regional aircraft widely used by operators around the world for inter-island services and short hop operations, is in high demand for its proven ability to operate from smaller airports and short airstrips in all weather conditions, often providing vital lifelines for remote communities.

The company's ambition extends beyond the Islander and the sub-regional market, with the intention to design and manufacture new clean sheet aircraft up to 100 seats powered using zero carbon technology.

Paul Hutton, Cranfield Aerospace chief executive, says: “This deal accelerates our roadmap for the introduction of new zero-emissions aircraft. As other sectors decarbonise quickly, it is imperative that the aviation industry accelerates its own transition to new, clean aircraft. Looking to the future we will use the combined experience of Cranfield Aerospace and Britten-Norman to produce an entirely new aircraft design, optimised around hydrogen fuel cell technology.”

William Hynett, chief executive of Britten-Norman adds: “The merging of Britten-Norman and Cranfield Aerospace Solutions will create a new market leader in green aircraft manufacturing, bringing together joint strengths in aerospace manufacturing, certification and innovation. The investment will give a huge boost to UK aviation exports and will deliver the first original equipment manufacturer (OEM) sub-regional aircraft powered by hydrogen. This merger will create many new high tech and manufacturing roles across the new business and a host of opportunities for apprenticeships and graduate placements in the sustainable aerospace sector.”

The two companies have been collaborating on Project Fresson for over two years, a project set up to develop the technologies required to enable the hydrogen propulsion system for the Islander. The project has been backed by the UK government, via the UK Aerospace Technology Institute, and has secured over GBP14 million in private funding from global investors.

The combined entity will incorporate seven sites in London, Cranfield, Gosport, the Isle of Wight and Southampton in the UK, as well as Miami and Malta, and will employ around 220 people.