Brandenburg at the center of the fight for aviation innovation: how Germany is poaching strategic assets of Rolls-Royce

Where the Investments of Future Aviation Instrumentation Are Located

The development of the new demonstration UltraFan engine valued at £3 billion has become a crossroads of global competition among industrial nations. Rolls-Royce, the British aircraft engine manufacturer, faces a critical decision regarding the location of production and development of this advanced technology. The influx of capital and expertise into Brandenburg is gaining momentum as the German side offers attractive financial terms and strategic support.

The site in Dallwitz near Berlin has already proven its capability as an innovation hub. Over the past decade, German engineers have made significant contributions to the development of the UltraFan gearbox, as well as manufacturing a series of Pearl engines for business jets. This physical presence in Brandenburg creates a foundation for further expansion of manufacturing capacities.

Why Brandenburg Positions Itself as Europe’s Aviation Center

Brandenburg President Dietmar Woidke emphasizes regional advantages: the area is developing as a hub for small jet engines, attracting investments that are transforming the region’s economic landscape. The German government actively offers subsidies and tax incentives to expand Rolls-Royce’s manufacturing facilities in Dallwitz, aiming to transfer some British operations to Brandenburg.

This strategy did not happen by chance. Germany’s traditional industrial sectors are under pressure from globalization and competition from Chinese manufacturers. The aviation industry has become a reserve of economic resilience: by 2024, employment in this sector will reach 120,000 people compared to 105,000 ten years ago. Expanding engine production in Brandenburg could solidify the region’s role as a technological leader.

The Strategic Importance of Returning to the Narrow-Body Engine Market

Rolls-Royce plans to re-enter the profitable segment of single-aisle commercial aircraft engines, which it abandoned over ten years ago. Exiting this market cost the British company missed opportunities: popular Boeing 737 and Airbus A320 liners could have been powered by Rolls-Royce engines, but instead, they were produced by other manufacturers.

UltraFan offers a way back. The scaled design of the demonstration engine anticipates an efficiency increase of approximately 10% compared to current models. The design allows adaptation for both narrow- and wide-body aircraft, opening opportunities in military applications—from upgrading aerial tankers to developing compact engines for fighters.

Government Support as a Tool of Geopolitical Competition

Rolls-Royce CEO Tufan Erginbilgic actively advocates for government subsidies for the project. British ministers—Sir Kieran Starmer and Chancellor Rachel Reeves—made high-profile official visits to the headquarters in Derby, signaling political backing. However, the distribution of funding appears asymmetrical: Germany, increasing defense spending and modernizing infrastructure, can offer more substantial material incentives than the UK, which faces tightening public finances.

In the context of global instability, maintaining sovereign aerospace capabilities has become a matter of national security. Transferring technological expertise and manufacturing capacities abroad poses a strategic risk for the UK, as losing valuable knowledge could weaken the competitiveness of British aerospace industry for decades.

Implications for British Industry and International Competition

The debate over UltraFan’s future reflects a broader picture: in the globalized corporate structure of Rolls-Royce, the UK government has limited leverage. As a publicly traded company with international investors, it must balance commitments to shareholders with national interests of Great Britain.

European Reform Center analysts, including Sander Torduar, recognize that aviation is becoming increasingly important for economies traditionally focused on manufacturing. The German aerospace industry association prioritizes expanding engine production. However, the UK remains home to centers like Derby, where critical R&D and manufacturing operations are concentrated. Losing these high-tech jobs would have significant economic and political consequences.

Positioning of Rolls-Royce and Prospects for Cooperation with Brandenburg

Rolls-Royce emphasizes its long-standing partnership with Brandenburg and intends to continue developing this cooperation at a new level. Negotiations regarding the scope of German involvement in the production of UltraFan components remain open, but the trend is clear: Brandenburg positions itself as an alternative manufacturing hub.

While UK officials claim to maintain leadership in aerospace technologies, competition from Germany is intensifying. Resolving this dilemma will require strategic decisions from Rolls-Royce and the governments of the UK and Germany regarding the allocation of assets, technologies, and personnel in the field of aviation instrumentation.