Honeywell Considers Aerospace Spinoff

Honeywell’s aerospace business produces components and systems for a wide variety of aircraft, rotorcraft, and spacecraft. [Courtesy: Honeywell]

Honeywell is contemplating the spinoff of its aerospace business, one of the world’s largest suppliers of components, systems, and services for commercial and general aviation, defense, and business aircraft, as well as helicopters, spacecraft, and advanced air mobility (AAM) designs such as electric air taxis.

The aerospace business is Honeywell’s largest and most profitable unit and counts some of the aviation industry’s titans, including Boeing, Airbus, Textron Aviation, and Lockheed Martin, as customers. For the 2023 fiscal year, the segment accounted for more than one-third of the company’s net sales and about 45 percent of profits.

“At the same time, we have been evaluating more transformational changes,” said Vimal Kapur, chairman and CEO of Honeywell, in a note to investors Monday morning.

The firm said it will provide an update on its plans in its fourth-quarter 2024 earnings release. Earlier this year, it sold its personal protective equipment business and announced plans to spin off its advanced materials unit.

Honeywell Aerospace Technologies sells everything from actuators and avionics, to engines, to radar and communications systems. It even produces docking and navigation systems for spacecraft. The company last year said its AAM unit—which targets electric, vertical takeoff and landing (VTOL), and other novel aircraft—has racked up $10 billion in contracts.

Last month, however, activist investor Elliott Investment Management disclosed that it bought a $5 billion stake in Honeywell. Elliott urged the company’s board to split up its aerospace unit from the core business, which according to analysts who spoke to Reuters would create a standalone company valued as high as $120 billion.

The move would echo General Electric’s decision in 2021 to split up its aerospace, healthcare, and energy businesses.

“We believe the portfolio transformation Vimal and his team are leading represents the right course for Honeywell, and we look forward to the upcoming completion of the review and to supporting Honeywell as it implements the necessary steps to realize its full value,” Elliott said in a statement Monday.

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Jack DaleoAuthor

Jack is a staff writer covering advanced air mobility, including everything from drones to unmanned aircraft systems to space travel—and a whole lot more. He spent close to two years reporting on drone delivery for FreightWaves, covering the biggest news and developments in the space and connecting with industry executives and experts. Jack is also a basketball aficionado, a frequent traveler and a lover of all things logistics.