Fides CF | Insight on Aerospace & Defence Sector

The aerospace and defence industry is at a historic turning point. The convergence of geopolitical tensions, European rearmament, technological revolution and production reshoring is creating a structural growth cycle that will extend for at least a decade.

For Italy, this cycle represents a unique opportunity to consolidate its role among the major defence industrial powers. Leonardo and Fincantieri have ambitious and credible industrial plans; the GCAP programme projects the country into the exclusive club of sixth-generation air platform producers; the fabric of specialised SMEs in the Italian aerospace supply chain represents a national strategic asset.

The GCAP, in particular, is shaping up as the cornerstone programme of Italy’s industrial projection in the sector for the coming decades. Full access to system know-how – unlike in the F-35 programme – and the “equal partnership” principle offer the Italian ecosystem the opportunity to close the technological gap accumulated in stealth, advanced propulsion and AI applied to defence. The award of the first joint contract worth GBP 686 million in April 2026 confirms the programme’s substance and its transition from the negotiation phase to the execution phase.

However, the realisation of this potential is not without risks. The fiscal sustainability of rearmament, supply chain fragility, the shortage of qualified human capital, trade policy uncertainty and governance risks of multinational programmes require constant attention from industrial operators, investors and policymakers.

On the M&A front, the sector offers fertile ground for consolidation, vertical integration and technology capability acquisitions. Italian SMEs in the aerospace and defence supply chain, with their specialist know-how and integration into the programmes of major OEMs, represent highly valuable targets for strategic and financial buyers, both domestic and international.

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