The UK’s Britten-Norman and Cranfield Aerospace Solutions (CAeS) have signed a heads-of-terms agreement to merge and start delivering hydrogen-powered regional airliners in 2026. The company aims to achieve certification for both converted and new-build examples of the nine-seat Britten-Norman Islander aircraft.

Due for completion in mid-2023 after completion of final due diligence, the merger calls for HydrogenOne Capital Growth Plc (“HydrogenOne”), a consortium of CAeS investors consisting of HydrogenOne, Safran Corporate Ventures, and UAE-based investment firm Strategic Development Fund (SDF), to invest up to £10 million in the new company, including up to £5 million investment from HydrogenOne upon completion of the merger, which is anticipated in mid-2023. The new backing will build on an earlier £14.4 million funding round that was supported by the UAE's Tawazun Economic Council and California-based Motus Ventures.

Cranfield University and Motus Ventures will continue to retain shares in the new business. Britten-Norman’s existing owners, including lead investor Alawi Zawawi, will also join the new business. The new investment will anchor further funding to support the growth of the merged entity.

Longer-term plans at CAeS call for the conversion of a 19-seat regional aircraft to hydrogen power and for the eventual conversion of 100-seat airliners. It already holds a commitment from German regional airline Evia Aero to buy 10 of the conversion kits and leasing group Monte Aircraft has signed a letter of intent for another 40 units.

By combining CAeS’s development of a hydrogen-electric fuel cell propulsion system with the existing Britten-Norman aircraft technology, the companies say they have forged “a clear and unambiguous route to market.”

“The investment will give a huge boost to UK aviation exports and will deliver the first original equipment manufacturer sub-regional aircraft powered by hydrogen,” said Britten-Norman CEO William Hynett. “This merger will create many new high-tech and manufacturing roles across the new business and a host of opportunities for apprenticeships and graduate placements in the sustainable aerospace sector.”

The two companies have collaborated for two years on Project Fresson, a project established to develop the technologies required to enable the hydrogen propulsion system for the Islander. The project enjoys the backing of the UK Government, via the UK Aerospace Technology Institute, and has secured more than £14 million in private funding from global investors.

CAeS recently selected Evolito to provide the electric motor and inverters for its Project Fresson aircraft. Backed by venture capital groups B-Flexion and Oxford Science Enterprises, Evolito emerged in July 2021 as a spinoff from a company called YASA to harness aerospace intellectual property before Mercedes-Benz acquired its automotive activities. YASA—which stands for Yokeless and Segmented Armature—achieved prominence in aviation circles through its involvement in Rolls-Royce’s Spirit of Innovation project. UK-based Reaction Engines is providing its fuel cell cooling technology for the new powertrain.

"This deal accelerates our roadmap for the introduction of new zero-emissions aircraft," said CAeS chief executive Paul Hutton. "As other sectors decarbonize quickly, it is imperative that the aviation industry accelerates its own transition to new, clean aircraft. Looking to the future we will use the combined experience of Cranfield Aerospace and Britten-Norman to produce an entirely new aircraft design, optimised around hydrogen fuel cell technology."

The Islander, which has been in production since the 1960s, currently runs on a pair of either piston or turboprop engines provided, respectively, by Lycoming or Rolls-Royce. CAeS plans to replace these engines with fuel cells and electric motors that run on gaseous hydrogen.

Britten-Norman is currently the UK's only remaining manufacturer of passenger-carrying airliners. The combined entity will operate from seven sites including Cranfield Airport, London, Gosport, the Isle of Wight, and Southampton in the UK, as well as in Miami and Malta. 

Back in October 2020, Britten-Norman announced its intention of working on electric and hybrid-electric versions of the Islander, of which almost 1,300 units have been built and delivered. It has also explored the possibility of developing an autonomous version of the utility aircraft through a partnership with Blue Bear Systems Research.