FIA 2026: Honeywell Aerospace targets expansion following June spin-off

Honeywell Aerospace used its first appearance at Farnborough International Airshow 2026 as an independent company to set out plans for organic and inorganic growth, with executives pointing to record defence budgets and mounting demand for precision-guided munitions as catalysts for development.

Speaking to journalists ahead of the show, Jim Currier, president and chief executive of Honeywell Aerospace, described the 15-month separation from parent company Honeywell as demanding but rewarding. The spin-off was completed on 29 June 2026.

“The timing could not be any more perfect for us.” - Jim Currier, president and CEO, Honeywell Aerospace.

Record defence demand drives investment

Currier said around 40% of Honeywell Aerospace’s business was defence-related, of which roughly 30% comprised international sales made directly to ministries of defence, NATO allies and international primes, rather than through US foreign military sales channels, which the company classified as domestic transactions.

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The company signed a framework agreement in March 2026 with the US Department of Defense, RTX and Lockheed Martin, covering around 30 products across 11 precision-guided missile systems, according to Currier. The agreement was accompanied by a US$500 million capital commitment to expand production capacity. 

Currier said output on some of those systems would need to increase by between two and four times current levels, though he characterised the scale of that challenge as more manageable than the headline figures suggested, as Honeywell’s inertial measurement units (IMU) are produced on shared commercial and defence lines. The company manufactures around 100,000 IMUs annually, of which only around 10% are currently diverted to defence applications.

Honeywell Aerospace’s international defence strategy is distinct from its domestic approach, Currier said, reflecting growing demand among European governments for sovereign, non-ITAR (International Traffic in Arms Regulations) technology developed and manufactured domestically. The company employs around 1,000 engineers across the EU dedicated to non-ITAR product development, a strategy reinforced by the September 2024 acquisition of Italian navigation specialist Civitanavi Systems, which added European manufacturing capacity.

The company also used Farnborough to announce a collaboration with Shield AI. Under a Memorandum of Understanding, Honeywell Aerospace will develop a trusted autonomy software stack based on Shield AI’s Hivemind software development kit, integrating its Anthem avionics, navigation and sensing technologies.

Matt Milas, president of defence and space at Honeywell Aerospace, said the partnership was intended to help bridge the gap between autonomous flight capability. “Autonomy software can fly an aircraft, but trust has to be engineered into the architecture, not bolted on after,” he said. “Our role is to build the certified, design-assured foundation that lets a warfighter, a regulator and a fleet operator all trust the same platform.”

Acquisition strategy targets differentiated technology

Despite prioritising organic growth – underpinned by a backlog Currier said stood at a record $19 billion, up 20% year-on-year – Honeywell Aerospace has not ruled out further acquisitions. Currier set out four criteria guiding its M&A activity: whether a target’s technology is differentiated; whether that technology sits in a high-growth, high-demand segment; whether the target serves customers Honeywell does not already reach; and whether Honeywell can scale the business faster than the target could alone.

The September 2024 acquisition of CAES, an electromagnetic and electronic warfare specialist, was cited as an example, having given Honeywell entry into the maritime market and an international sales channel for a business that had previously sold exclusively within the US. Currier described the company’s current M&A pipeline as more robust than at any point he could recall, though he declined to disclose specific targets.

Currier said Honeywell Aerospace had spent around $3 billion over the past three years addressing vulnerabilities in its industrial supply base, shifting from single-source suppliers toward multi-sourcing, dual-sourcing and in-sourcing of manufacturing capability. He attributed part of the fragility to a decade-long push, predating the COVID-19 pandemic, to consolidate suppliers and outsource production, which he said had blurred the distinction between core and non-core manufacturing capability.

Multi-year procurement commitments would also be critical, Currier added, as they provide suppliers further down the value chain with the confidence to invest in additional capacity for missile and munitions production.

Counter-uncrewed aerial systems (CUAS) were also identified as a growth area for the business. Currier confirmed increased demand for Honeywell’s CUAS products, particularly cooling technology used in directed-energy and laser-based systems.

The Shield AI collaboration will see the companies planning to evaluate opportunities in UAS programmes and autonomy requirements among allied nations seeking sovereign capability.

Shephard’s Farnborough International Airshow coverage is sponsored by MBDA

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