European aircraft manufacturer Airbus has sparked a wave of concern after announcing it could leave the UK if it leaves the European Union without a transition deal on single market and customs union.

The company, which employs around 14,000 people at 25 different sites in the UK, called the plan a ‘dawning reality’ rather than part of ‘project fear’.

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Airbus published a Brexit risk assessment report on Thursday, where it claimed the lack of a deal between the UK and the EU would ‘lead to severe disruption and interruption of UK production’. It added: “This scenario would force Airbus to reconsider its investments in the UK and its long-term footprint in the country.”

Airbus’s statement followed Prime Minister Theresa May’s decision to rule out staying in the customs union post-Brexit. The move would prevent the UK from benefitting from the EU’s duty-free area and its common import tariff for non-EU goods. According to outgoing CBI president Paul Drechsler, this would mean that sections of the UK industry would ‘face extinction’.

Reactions were mixed. A spokesperson for the UK Government said: “We have made significant progress towards agreeing a deep and special partnership with the EU to ensure trade remains as free and frictionless as possible, including in the aerospace sector, and we’re confident of getting a good deal that is mutually beneficial.

“Given the good progress that we are continuing to make in the negotiations, we do not expect a no-deal scenario to arise.”

But the Welsh Government issued a statement calling the announcement ‘extremely worrying’. A spokesperson said: “We have repeatedly warned that the UK cannot take the huge economic risk of cutting ourselves adrift from the single market and customs union. Particularly in the case of manufacturing sectors, which in Wales are so important in providing high-paid, high-skilled jobs.”

In its Brexit report, Airbus, which manufactures wings for the A320, A330/A340, A350 and A380 passenger planes in the UK, further said that the current transition period ending in December 2020, would be too short to allow changes to the supply chain. This would consequently lead the company to ‘refrain from extending’ its UK supplier base.

Airbus Commercial Aircraft chief operating officer Tom Williams said: “Put simply, a no-deal scenario directly threatens Airbus’s future in the UK.”

Conservative MP Stephen Crabb labelled the announcement a ‘wake-up call’ and tweeted: “The enormous Airbus factory in North Wales is one of the jewels in the crown of UK manufacturing. This is a wake-up call. A pragmatic, sensible Brexit that protects trade & jobs is vital.”

Welsh Labour MP Stephen Doughty also took to Twitter to comment: “When will this tin-eared government and PM listen to those employing tens of thousands instead of the extremists in their own party? This is deadly serious.”

Brexit secretary Sir Keir Starmer tweeted: “If proof was needed that the PM’s Brexit red lines need to be abandoned (and fast), this is it.”