What Is BAE Systems? Europe’s Defence Giant — Eurofighter, Submarines, and the GCAP Fighter

BAE Systems posted record sales of £28.3 billion in 2024 — 14 percent growth — and holds a £77.8 billion order backlog that keeps its factories busy for years to come. The company makes the rear fuselage for every F-35 on Earth, designs the nuclear submarines that carry Britain’s strategic deterrent, and leads a three-nation consortium building the West’s next sixth-generation fighter.

Company Overview

BAE Systems was formed on 30 November 1999 through a £7.7 billion merger of British Aerospace (BAe) — itself a product of earlier nationalizations and consolidations of British aviation — with Marconi Electronic Systems (MES), the defence electronics subsidiary of GEC plc. The merger created the United Kingdom’s dominant defence prime and one of the world’s top five defence companies by revenue.

Product Portfolio

Eurofighter Typhoon

BAE Systems is the prime contractor and systems integrator for the Eurofighter Typhoon — the frontline combat aircraft for the UK, Germany, Italy, Spain, Saudi Arabia, Qatar, Austria, Kuwait, and Oman. Production is shared among BAE Systems (UK), Leonardo (Italy), and Airbus (Germany/Spain).

2024 brought two major new Typhoon orders: Spain contracted for 25 aircraft (the Halcon II tranche, December 2024) and Italy ordered up to 24 aircraft. Active export campaigns are underway for Turkey (up to 40 aircraft), Qatar, and Saudi Arabia — a combined potential ceiling of more than 150 new Typhoons. BAE CEO Charles Woodburn has publicly confirmed the Turkey campaign, which is being pursued with UK government diplomatic support.

F-35 Lightning II — Fuselage Partner

BAE Systems manufactures the rear fuselage section for every F-35 built anywhere in the world, at its Samlesbury facility in Lancashire, England. In 2023, the site delivered its 1,000th F-35 rear fuselage — a milestone that underscores the depth of BAE’s integration into the global F-35 supply chain. This contract runs for the life of the F-35 program, providing long-term revenue visibility independent of UK defence budgets.

Hawk Advanced Jet Trainer

The BAE Systems Hawk has been the world’s leading advanced jet trainer since 1974, with more than 1,000 built for over 18 nations. The Red Arrows, the UK’s famous aerobatic display team, fly the Hawk. The T-45 Goshawk variant is the U.S. Navy’s standard carrier pilot trainer. The Hawk’s longevity reflects its role as a trusted bridge between basic training and front-line fast jets.

Astute Class Nuclear Attack Submarines

Built exclusively at BAE Systems’ Barrow-in-Furness shipyard, the Astute class represents the pinnacle of British submarine engineering. Seven boats are on contract; all are nuclear-powered attack submarines armed with Spearfish torpedoes and Tomahawk land-attack cruise missiles. The May 2018 contract awarded £1.5 billion for the seventh boat, HMS Agincourt, keeping the Barrow workforce continuously employed.

Dreadnought Nuclear Ballistic Missile Submarines

The Dreadnought programme will replace the four Vanguard-class submarines that carry the United Kingdom’s entire nuclear deterrent. Four boats are being built under the Dreadnought Alliance — a tripartite management structure between BAE Systems, Rolls-Royce, and the MOD. Construction began with a steel-cutting ceremony on 5 October 2016 at Barrow. Each boat will be 153.6 metres long and displace 17,200 tonnes submerged — the largest submarines ever built in the UK.

GCAP — Sixth-Generation Fighter

The Global Combat Air Programme (GCAP) is BAE Systems’ most consequential future program. A UK-Italy-Japan collaborative effort announced on 9 December 2022, GCAP will produce a sixth-generation manned combat aircraft to succeed the Eurofighter Typhoon. The program’s industrial joint venture — Edgewing — was formally established on 20 June 2025, headquartered in Reading, UK. BAE Systems, Leonardo, and Japan Aircraft Industrial Enhancement Co Ltd (JAIEC) each hold an equal 33.3% stake.

As of mid-2025, BAE Systems was two-thirds through the structural manufacturing of a crewed supersonic demonstrator — the first crewed supersonic combat demonstrator developed in the UK in over 40 years. First flight is expected in the 2026-2027 timeframe, with the production aircraft entering service in the 2040s.

CV90 Infantry Fighting Vehicle

Produced under the Hägglunds brand, the CV90 family is Europe’s most widely exported infantry fighting vehicle. Nine nations operate CV90s — Sweden, Norway, Netherlands, Switzerland, Finland, Denmark, Estonia, Slovakia, and Ukraine. The vehicle’s modular design allows continuous upgrades; ongoing programs in multiple nations keep BAE’s Swedish facilities busy and generate long-term sustainment revenue.

Bradley and AMPV — US Army Programs

BAE Systems is the primary contractor for the U.S. Army’s Bradley Infantry Fighting Vehicle modernization programme and for the Armored Multi-Purpose Vehicle (AMPV) — a new platform replacing the aging M113 family across five mission roles. In February 2025, BAE Systems received a $181 million contract for 31 Amphibious Combat Vehicle (ACV) medium caliber cannon variants for the U.S. Marine Corps.

Electronic Systems and Cyber

BAE Systems’ electronic systems division covers electronic warfare, signals intelligence, cybersecurity, and advanced avionics. The APKWS (Advanced Precision Kill Weapon System) — a low-cost laser-guided rocket conversion kit — has become a combat-proven counter-drone and light-vehicle weapon used across multiple conflicts.

The Turkey Typhoon Campaign

Turkey’s potential Typhoon acquisition is the single largest outstanding export opportunity in the Eurofighter programme. Following its expulsion from the F-35 programme in 2019, Turkey has been actively seeking an alternative advanced combat aircraft. The Eurofighter Typhoon is the leading candidate, with discussions covering up to 40 aircraft — making it potentially larger than any other single Typhoon export contract since the original Saudi deal.

BAE Systems CEO Charles Woodburn has publicly confirmed an active campaign. The UK government is involved diplomatically. However, the deal requires unanimous approval from all four Eurofighter partner nations — meaning Germany, Italy, and Spain must also agree, complicating the path in the context of Turkey’s ongoing S-400 dispute with NATO partners.

Turkey has operated the BAE Systems Hawk trainer for decades, giving it an existing relationship with the company. Both nations see the Typhoon sale as a potential reset for bilateral defence relations.

Strengths and Risks

Strengths

• GCAP leadership: As prime contractor and system integrator, BAE Systems is positioned to dominate the West’s next combat aircraft generation
• Record financials: 14% sales growth and £77.8B backlog in 2024 demonstrate momentum rare in the sector
• Nuclear deterrent monopoly: No other company can build UK nuclear submarines — permanent revenue floor
• US market depth: Bradley, AMPV, M109, F-35 fuselage — embedded in U.S. Army and Navy programs at scale
• Typhoon export momentum: Spain and Italy 2024 orders plus Turkey/Qatar/Saudi campaigns represent 150+ potential aircraft

Risks

• Typhoon sunset: F-35 sales pressure is eroding Typhoon’s export market; the GCAP bridge decade requires careful management
• Turkey uncertainty: The most valuable single export opportunity is caught in geopolitical cross-fire between NATO partners
• UK budget pressure: BAE’s primary domestic customer faces persistent budget constraints that can delay or reduce programmes

Sources

• BAE Systems 2024 Full-Year Results — Official investor release, February 2025
• Astute and Dreadnought Contracts — BAE Systems press release, May 2018
• BAE Systems 2024 Strategic Review — Nordic Defence Review analysis

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