“Ready when you are”

Over 2024, British defence company BAE Systems reported a 14% increase in sales, with their underlying operating profit rising to over £3 billion. Their recent success is closely related to the three-year-long war in Ukraine, a situation that only grows in complexity as US President Trump engages in backroom peace discussions with the Kremlin. 

Following Ukraine President Zelensky’s exclusion from these talks, European leaders are scrambling to form a cohesive bloc against an adverse deal for Ukraine. As the world watches on, BAE Systems stands ready to meet any increase in demand as Europe prepares to dig its spurs on defence spending.

As the UK’s largest defence contractor, BAE has already contributed to the IDF’s campaign in the Gaza Strip. According to CAAT, BAE has been particularly involved in the production of F-35 fighter jet parts, and the M109 self-propelled howitzer. 

Their part in the Ukraine war has been nowhere less significant; the instalment of a legal entity in Ukraine has allowed them to maintain L119 light artillery donated by the British army, and only recently in January they were granted a £61m contract to produce artillery barrels for the conflict. Such involvement can be expected to escalate through 2025, depending on the outcome of the ongoing peace talks.

Subsequently, the contractor has received backlash from left-wing political groups and figures in the UK, especially over involvement in the Gaza conflict. 

In October 2024, de-whipped Labour MP Zarah Sultana probed Keir Starmer on UK exports of F-35 parts to Israel, whilst pro-Palestinian activist groups have continued to scrutinise BAE’s participation, to the point of genocidal accusations. 

This even escalated to the blockading of BAE facilities in May 2024, with such protests repeating on the 20th February this year as a factory in the north of England was targeted. A BAE spokesperson has acknowledged the “devastating impact on civilians in the region” yet reminded the group that the company “operates under the tightest regulation and comply fully with all applicable defence export controls”.

Fortunately for BAE, the UK’s foreign policy on Ukraine has remained consistent despite the change to a centrist Labour government under Keir Starmer. In fact, the UK’s traditionally tough line on Russia has teetered on a deliberate “poking of the Russian Bear”.

In recent days, Starmer has expressed he is “ready and willing” to deploy British troops in Ukraine prior to an emergency summit in Paris hosted by French President Emmanuel Macron. This has provoked alarm from the Kremlin, who has deemed the presence of any European regulars in Ukraine “unacceptable”. 

France and Germany however, as the two long-standing bulwarks of the European Union, have prevaricated or else ruled out threats to put troops on the ground. Italy has also expressed doubts. 

Nevertheless, countries closest to Ukraine are already ramping up defence budgets - with Poland in particular spending at the 5% mark. BAE stands to benefit, as Trump pressures European countries to escalate defence, and the risk of fallout from a botched peace deal becomes ever apparent. Its backlog is at a record high, with operating earnings expected to rise by 8-10% over the course of 2025. 

There is little doubt that as the sentiment of abandonment increases in Europe over Trump’s negotiation tactics, Europe will arm itself no matter the lack of consistent policy between its leaders. 

Following the release of its new record profits, Charles Woodburn, Chief Executive of BAE, stated that “Today, nations are facing increasingly varied and complex threats to security”. In regards to BAE’s readiness to support an increase in armament, he echoes Starmer’s willingness, granted that “clear demand signals” are provided. The company’s preparedness to mobilise once long-term clarity is secured from Europe may be crucial to its performance this year.

Although Europe is yet to reach cohesion, BAE Systems is primed and ready to fire.