Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
British aerospace pioneer Reaction Engines has collapsed into administration after failing to secure new funding, ending ambitious hopes of revolutionising air travel by making hypersonic flight a reality.
PwC, which was already on standby, was appointed as administrator on Thursday. The firm said Reaction, which had been developing a hybrid rocket-jet engine, had been “pursuing opportunities to raise further funds, but unfortunately these attempts were unsuccessful”.
The majority of Reaction’s 208-strong staff — 173 people — have been made redundant. The remaining staff will be kept on to complete a “number of existing orders and support in winding down operations,” according to PwC.
Reaction’s collapse could prove a challenge for several Formula One racing teams which use its innovative cooling technology in their engines supplied by Mercedes-Benz.
A spokesperson for Mercedes F1 said the company was in “active dialogue with the administrators to ensure the necessary hardware supply for the 2025 season”.
Reaction’s technology is part of the cooling system in the engines used by Mercedes F1 and supplied to McLaren, Williams and Aston Martin to help optimise performance.
The company’s demise could also trigger a battle over the ownership of the intellectual property of its cutting-edge technology, which PwC is expected to assess, according to people familiar with the situation.
Sarah O’Toole, joint administrator and partner at PwC, said it was with “great sadness that a pioneering company with a 35-year history of spearheading aerospace innovation has unfortunately been unable to raise the funding required to continue operations”.
Reaction had been locked in talks with shareholders, including the UAE-based Strategic Development Fund, over a £20mn cash injection for several weeks. Some of its strategic backers, which include FTSE 100 groups BAE Systems and Rolls-Royce, had been reluctant to commit to more funding, several people familiar with the talks had confirmed.
Rolls-Royce said on Thursday it was “saddened” that Reaction had gone into administration. BAE said it was “keen to explore potential employment opportunities which may be of interest for those affected”.
Founded in 1989, Reaction’s Sabre technology — short for Synergetic Air Breathing Rocket Engine — was designed to combine the fuel efficiency of a jet engine with the power of a rocket.
Key to Sabre was the company’s pre-cooling technology which dissipates heat and prevents engines from overheating. At hypersonic speeds, the temperature generated inside a conventional gas turbine would start to melt components unless they were cooled in some way.
Under chief executive Mark Thomas, the company had in recent years pivoted to licensing the technology to commercial customers such as Mercedes, as well as US aerospace group Honeywell. Honeywell was not immediately available for comment.
Reaction had already warned investors earlier this year that it needed to raise additional money. The company had previously raised £150mn, including £40mn in January 2023 through a fundraising led by SDF. Key financial investors, including Artemis and Schroders, subsequently wrote down the value of their stakes in August this year.
The company’s collapse raises questions over a UK-led military project to pursue reusable hypersonic air vehicle technologies.
Along with Rolls-Royce, the Royal Air Force and the defence research agency Defence Science and Technology Laboratory, Reaction was part of the consortium behind the project, which had hoped to fly a demonstrator vehicle as early as the middle of this decade.
The government said that it “closely monitors all of its supply chains to ensure the secure and continued delivery of key capabilities”.
Read the full article here