In a significant blow to British aerospace innovation, Reaction Engines has entered administration following unsuccessful attempts to secure vital funding, marking the end of its ambitious vision to revolutionise air travel through hypersonic flight technology.
PwC, appointed as administrator on Thursday, confirmed that 173 of the company’s 208 employees have been made redundant, with the remaining staff retained to complete existing orders and assist in winding down operations.
The collapse poses substantial challenges for several Formula One racing teams utilising Reaction’s innovative cooling technology in Mercedes-Benz-supplied engines. Mercedes F1 has initiated dialogue with administrators to safeguard hardware supply for the 2025 season, as the technology remains crucial for optimising engine performance across Mercedes F1, McLaren, Williams and Aston Martin teams.
The company’s demise comes after failed negotiations with shareholders, including the UAE-based Strategic Development Fund, regarding a £20 million cash injection. Strategic backers, including FTSE 100 giants BAE Systems and Rolls-Royce, showed reluctance to commit additional funding.
Established in 1989, Reaction’s flagship Sabre technology merged jet engine fuel efficiency with rocket power capabilities. The company’s pre-cooling technology, preventing engine overheating at hypersonic speeds, had attracted significant commercial interest, leading to licensing agreements with Mercedes and US aerospace group Honeywell.
The collapse raises serious questions about the future of a UK-led military project focused on reusable hypersonic air vehicle technologies, where Reaction Engines played a crucial role alongside Rolls-Royce, the Royal Air Force, and the Defence Science and Technology Laboratory.
Prior to its downfall, the company had raised £150 million, including a £40 million funding round led by SDF in January 2023. Key financial investors Artemis and Schroders had previously written down their stake values in August 2023, signalling early warning signs of the company’s financial struggles.
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