Aviation does not take off without support: world examples and a lesson for Ukraine
Kyiv • UNN
World experience shows that without state support, the aviation industry cannot function effectively, and investments in it create thousands of jobs.
The aviation industry is a strategic industry that creates thousands of jobs, stimulates the development of new technologies, education, related industries, and the service sector. All leading aviation nations ensure the sustainable development of the industry through state orders, subsidies, preferential lending, and investments in research and development. Without proper state support, the effective functioning of this sector is practically impossible. This experience is confirmed by world practice – and Ukraine must take it into account in today's conditions, writes UNN.
Global Cases: Eurofighter Typhoon – Why Production Stagnates Without Orders
When the state reduces support for strategic industries, industry and trade unions react actively, forcing governments to reconsider their decisions and find ways to preserve production and jobs.
A striking example of the importance of state orders for the aviation industry was the experience of Great Britain. In recent years, the government has not placed new orders for the Eurofighter Typhoon multi-role fighter in the Tranche 5 version. As a result, production at the BAE Systems plant in Warton virtually stopped. The Unite trade union publicly announced staff reductions and the loss of key production competencies that had been formed in the country for decades.
The Typhoon was developed and is supported within an international partnership between Great Britain, Germany, Italy, and Spain, being a joint project, so the situation with reduced orders caused concern in all participating countries.
This situation demonstrated how critically important stable state support is for preserving high-tech production. As a result, in 2025, Great Britain and Germany concluded a new intergovernmental contract to promote joint exports of military aircraft, including Eurofighter Typhoon aircraft and Airbus A400M transporters. The decision was aimed at preserving production capacities, jobs, and technological sovereignty of both countries in conditions of declining domestic orders.
Another case is Boeing's case. One of the world's largest aviation and defense contractors found itself in a deep financial crisis in 2024-2025: the company suffered billions in losses in the civil, military, and space segments due to problems with fixed-price contracts, employee strikes, and production delays. The decline affected even strategic areas such as the 777X, MQ-25, KC-46 aircraft, and the Starliner manned spacecraft. In response, Boeing was forced to announce a 10% staff reduction, and the government had to take additional anti-crisis measures to avoid disruptions in critical defense and aerospace programs. This example demonstrates how vulnerable even a global company can be without stable state support – and how important it is for countries to protect their strategic industries in time.
In addition, most countries use targeted state support programs that compensate for market risks and stimulate technological breakthroughs for the aviation industry. The EU implements large-scale research programs Clean Sky and Clean Aviation, funded through Horizon Europe. This is a public-private partnership between the European Commission, industry, and research institutions, with a total budget of over €4 billion. The programs are aimed at developing innovations in aviation (advanced structural design, new engines, environmental technologies) that the private sector would not be able to implement independently due to high risks or long-term payback.
The USA uses the mechanism of state export guarantees through the Export-Import Bank, which provides loans, insurance, and guarantees for concluding large contracts for years to come. Corresponding cooperation with Canadian EDC demonstrates the possibility of joint financing of large cross-border deals.
In Ukraine, the launch of similar state guarantee schemes for aviation companies could provide competitive advantages in the international segment.
Lesson for Ukraine: aviation support is not an expense, but an investment
Ukraine inherited one of the most powerful aviation schools in the post-Soviet space. Thanks to preserved technologies and engineering competencies, it was possible not only to maintain but also to develop a number of aircraft manufacturing areas. Before the full-scale invasion, Ukraine had its own aviation industrial base – An-140, An-148, An-158, An-132, An-26, and An-178 aircraft, as well as An-225 "Mriya" – the world's largest and most powerful transport aircraft, and the currently modernized heavy transport aircraft An-124-100 "Ruslan", which became Ukraine's calling card in the international market. Helicopter operation was supported, and unmanned solutions and promising developments were developed. The industry was supported by state programs, integrated with related sectors (mechanical engineering, composites, IT), contributed to exports and the development of educational and engineering schools.
After February 24, 2022, the civilian aviation segment practically stopped – the airspace was closed, and air traffic was suspended, with the exception of isolated special flights coordinated by the military. Despite this, Ukrainian aviation enterprises did not stop working – equipment modernization continues, unmanned systems are being developed, combat aviation is being maintained, and the engineering and production potential of the civilian fleet is being preserved. Such a combination of defense and civilian areas of the industry creates a holistic ecosystem: the experience of servicing civilian aircraft directly flows into the support of combat aircraft, and vice versa – military technologies inspire new civilian solutions. The synergy of the civilian and military segments of aviation plays a key role in this process, allowing the fleet to be maintained in combat readiness and providing a stable basis for development even during the war.
The industry remains a center of gravity for dozens of related sectors and creates a multiplier effect for the economy – investments in aviation create added value in mechanical engineering, education, logistics, and security.
"The aviation industry has not just survived – it holds on despite everything, even in difficult wartime conditions. Today, it is the core that can become the locomotive of both mechanical engineering and the entire economy of the country. Without its own production, the country will not be able to exist for long either (...) According to statistics, one job in the aviation industry creates from 8 to 12 jobs in related sectors of the economy – from education and metallurgy to logistics and other production and service areas," says Yarema Zhugaievych, Head of the Trade Union of Aircraft and Machine Building Workers.
This is also confirmed by the results of a study by the Ukrainian State Flight Academy and an analytical review by The Financial Analyst, which state that supporting aviation is an investment in the national economy, defense capability, and human potential.
A frivolous approach is costly
The achievements of the Ukrainian aviation industry in recent years are the result of systematic work, despite the war, destruction, loss of markets and resources. Withstanding the blow, retaining specialists, ensuring the operation of defense aviation, and developing unmanned technologies is not an accident, but a consequence of decades of efforts and the remnants of state support that was still in effect until early 2025.
However, today the industry is on the brink. As of January 1, 2025, the key tax and regulatory preferences that allowed aviation industry enterprises to remain at least partially competitive were terminated. At the same time, a new legislative regime – "Defence City" – is being formed, which should provide special conditions for enterprises of the defense-industrial complex.
However, as the Aerospace Association of Ukraine warns, in the current versions of the draft laws, the aviation industry is practically excluded from the list of potential residents of Defence City. This creates a risk that one of the most strategic sectors – aviation – will remain outside the scope of state support during a critical period when it is not only about recovery but also about survival. The industry remains alone with the challenges of war, a closed market, and growing competition from international manufacturers.
In the current situation, frivolity in government decisions can cost Ukraine decades of technological advantage. And this is not just about the past. It is about the future that can still be protected today.
What is needed today so that tomorrow aviation does not become the second lost space industry
Mykhailo Pinkevych, advisor to PrJSC "Aviakompaniya Konstanta" and member of the Supervisory Board of the Ukrainian Air Transport Association, outlines three critical challenges for Ukraine's aviation industry. First, the abolition of tax benefits from the beginning of 2025 significantly complicated the activities of enterprises – it is necessary to restore the exemption of airlines and manufacturers from income tax, VAT, and land tax to maintain competitiveness and the production base. The second problem is the duty on imported components, which increases costs and hinders the repair and modernization of equipment – its abolition would stimulate the development of both civil and military aviation. Finally, a significant part of aviation equipment needs updating, and production facilities need modernization. The deployment of a re-equipment program and the development of new solutions would become the basis for the sustainable development of the sector.
In turn, Viktor Popov, President of the Aerospace Association of Ukraine, emphasizes that the industry can avoid a crisis only if the previously existing preferences are returned, and Defence City is currently the fastest possible way to return them. Without this, even industry flagships such as "Antonov" or "Motor Sich" will not meet the requirements and will remain without support. He also draws attention to the importance of the amendments that have already been submitted to the draft laws: in particular, reducing the defense profitability threshold to 50%, using the list of aviation enterprises already approved by the government, and applying preferences without mandatory financing from the state budget, which will allow companies to invest the saved funds in new developments and production upgrades.
Thus, the experience of leading countries, the realities of Ukrainian aviation during the war, and the position of industry experts unequivocally indicate: the aviation industry cannot survive without state participation. The abolition of benefits, the lack of a systemic policy, and exclusion from key support programs threaten not only the industry itself but also the strategic capabilities of the state. To avoid repeating the fate of lost space, Ukraine needs to return preferences, adapt the legislative framework, and launch production modernization today. Otherwise, the country risks losing another industry that forms not only economic but also national security.