Aligning Civil Aviation and Aerospace with EU Defence Readiness 2030

As Europe moves toward a unified regulatory framework for rapid mobility and the EU implements the €800 billion ReArm Europe initiative, the line between civil and military aerospace is blurring. Our latest analysis explores the 2026 landscape, examining how Ireland’s €1.7 billion defence plan and the EU’s SAFE Instrument are creating new pathways for airlines, lessors, and space industries. Our Aviation, International Asset Finance team looks at the two critical pillars for stakeholders: the regulatory impact of enhanced cross-border transport and the surge in funding for dual-use technologies in satellites, drones and cybersecurity.

Executive Summary

• A unified regulatory framework by 2027: The EU aims to create a seamless mobility area for the transport of military and civil protection assets. For civil aviation, this means a new regulatory structure (EMERS) that distinguishes between normal operations and emergency measures, requiring a closer look at risk allocation and insurance.
• Dual-use synergy: There is a growing focus on "dual-use" assets - infrastructure and technology (like satellites and heavy lift cargo) that serve both civilian and military purposes. This opens new revenue streams for private aviation and aerospace firms.
• A multi-billion euro funding shift: The SAFE Instrument and the European Investment Bank (EIB) are mobilising hundreds of billions in capital. EIB annual investment in drones, quantum tech, and cyber is expected to double to roughly €2 billion.
• Ireland’s evolving neutrality: Ireland is modernising its stance, distinguishing between military and political neutrality. With a €1.7 billion national defence plan and €170 million committed to European Space Programmes, Ireland is positioning itself as a strategic hub for tech-driven defence support.
• Contractual implications for lessors and owners: Enhanced civil-military cooperation brings questions of asset requisition and "loss of use" to the forefront. Stakeholders must begin reviewing lease agreements and security measures to mitigate risks associated with military mobility mandates.

The opening months of 2026 have been marked by persistent assaults on global peace, leaving little doubt that the international security environment has fundamentally shifted. The EU White Paper for European Defence Readiness 2030, published in December 2025, opens with the statement “Europe faces an acute and growing threat. The only way we can ensure peace is to have the readiness to deter those who would do us harm”.

“Readiness” means being prepared, willing and equipped to take action, with timely access to the necessary resources, including mobile assets and infrastructure, to respond to situations that may arise. The core activity and actors in the area of defence will be the State. The Irish Government announced details of the State defence spending plan of €1.7 billion in December 2025. In addition, there is an evolving role for private industry engaged in aviation and aerospace supporting critical systems such as infrastructure, drones, satellites and cybersecurity.

The key question for the aviation and aerospace sector is whether evolving Irish and EU policy will have consequences for the industry, including airlines, aircraft lessors and space-related businesses.

In examining this issue, we focus on two areas. First, the potential impact of military mobility initiatives on civil aviation stakeholders. Second, the opportunities for growth in defence-related business activities, including access to funding for critical industries that have functional overlap and interoperability across the civil and military aviation and aerospace sectors.

Mobility as a crucial enabler

Military mobility has been identified as a crucial enabler in the EU White Paper. Back in 2024, only half of the EU Member States were fully compliant with the five working day commitment.

The EU’s Military Mobility package presented in November 2025 sets out a unified regulatory framework to facilitate the transport of equipment, goods and passengers for military or civil protection purposes across Europe. The aim is to create an EU military mobility area by 2027 and move closer to a ‘Military Schengen’.

The proposed Regulation is consistent with the Joint Communication of 26 March 2025 on the European Preparedness Union Strategy. The Joint Communication called for enhanced civil-military cooperation, with improved interaction between civilian and military actors. It recognised the dual-use of civilian infrastructure and mobile assets in military transport operations. This is without prejudice to the responsibility of EU Member States for safeguarding national security and defence, and to their power to protect other essential State functions, including ensuring the territorial integrity of the State and maintaining law and order. The EU does not address the issues of requisition or compulsory acquisition of assets or infrastructure at national level. We assume that this will be handled either by voluntary engagement with the private sector and/or by the national states through public service initiatives and legislation. The issue of requisition and loss of use is dealt with in many contracts between owners and operators. That said, however, the issue of insurance and additional security measures as risk mitigants may need further attention in due course.

The EU recognises that the armed forces of its Member States rely heavily on dual-use transport infrastructure and equipment. The proposed Regulation aims to strike a careful balance between facilitating military transport operations and mitigating the impact on civilians. It also aims to clarify the regulatory framework for civilian operators, such as passenger and cargo carriers, contracted by EU Member States’ armed forces, which account for the majority of military transport operations in the EU. By distinguishing between normal military transport rules and the emergency measures entailed under the European Military Mobility Enhanced Response System (EMERS), the proposed Regulation aims to adopt a graduated and progressive approach.

The EU measures strive to enhance predictability for civilian activities and provide opportunities for the civilian sector to contribute actively to improving military mobility in the EU. Overall, the aim is to foster a collaborative and mutually beneficial environment.

We recognise that this is a sensitive area, which will require much more detailed review and analysis in the areas of safeguards, risk allocation and potential compensation. The proposed Regulation will be considered by the EU Parliament and Council, and we will continue to monitor its progress and impact for aviation industry stakeholders.

Funding for defence

Defence spending in the EU is widely regarded as low by international standards. This has started to change, however. The Irish Government announced details of its defence spending plan of €1.7 billion in December 2025.

Until relatively recently, Europe had the benefit of a ‘peace dividend’, which resulted in lower levels of economic activity and production across defence and defence industries.

The EU recognises the interdependence between private industry and its Member States to assist with the acceleration of activity. It is currently working to implement a package of financial measures to create stimulus. Ease of access to funding is key to development and effective growth in this sector.

The EU’s ReArm Europe (Readiness 2030) initiative consists of investment of over €800 billion in defence spending within the EU through:

• National Escape Clause Activation: enabling increased national defence budgets within EU Member States.
• Security Action for Europe (SAFE) Instrument: a new EU financial instrument driving investment in European defence capabilities.

Due to the inherent geopolitical uncertainty, access to capital through private sector may be challenging. The EU defence paper focuses on financing requirements and the need for sources of finance to be accessible by the aviation and aerospace industry in a variety of sectors including technology, satellites, cybersecurity, and transport and logistics. A summary of financial measures includes (non-exhaustive):

• The SAFE Instrument, which provides up to €150 billion in loans to EU Member States for defence investments
• The measures aim to make existing EU instruments more flexible to allow greater defence investment
• Contributions from the European Investment Bank (EIB). The EIB Security and Defence Action Plan was an important first step and its implementation is expected to accelerate. Its annual investment is likely to double to c.€2 billion to fund projects such as drones, space, cybersecurity, quantum technology and civil protection
• Mobilising private capital.

Access to additional sources of funding by industries in EU member states should benefit all key areas and facilitate strategic research and development partnerships.

What about Ireland?

An Taoiseach Micheál Martin has consistently stated that Ireland’s military neutrality is being modernised and he distinguished between military neutrality and political neutrality. The Government’s Defence Policy Review (2024) highlights Ireland’s geographic position and the evolving global security environment, noting that Ireland must consider its own security and its responsibilities to like-minded partners more critically than ever. In 2025, the then Minister for Finance vetoed proposals by the Department of Defence that Ireland should consider borrowing up to €100 million for military projects under SAFE. An Tánaiste and Minster for Finance, Simon Harris signalled in February 2026 that the Government should look again at this issue if a further round of loans under the SAFE scheme becomes available.

Our geographic position on the western edge of Europe and the Atlantic seaboard results in our reliance and interdependence on EU and EETA member states, the UK and others for protection.

Industries across aviation, aerospace, technology, satellite services and cybersecurity may arguably contribute more significantly to Europe’s defence in the future. In addition to the €1.7 billion spending on defence, Ireland has committed €170 million to European Space Programmes between now and 2030. This funding is to help Irish companies grow in the fast-expanding global space industry.

While the future is uncertain, Ireland’s contribution to EU defence may occur in the areas of commercial partnerships between public and private sector aviation and aerospace industries in the core area of military mobility and supporting research and development of new technologies.

Conclusion

Looking ahead, Ireland’s aviation and aerospace industries may consider broadening their potential partnerships to include military and defence-related sectors, where permitted. There is also scope for Ireland’s aviation and aerospace sector to engage with EU initiatives in areas such as research, planning and development. We will continue to monitor Irish and EU policy developments, initiatives and programmes as they affect the aviation and aerospace sector in this dynamic and evolving area.

For more information and expert advice, contact a member of our Aviation & International Asset Finance team.

The content of this article is provided for information purposes only and does not constitute legal or other advice.