It has been an incredible 2025 so far for Rolls-Royce (LSE: RR). Last year saw a massive share price gain, as did the year before – but already in 2025, Rolls-Royce has moved up 35%.

But something has put me off investing in the stock – and the past several days have reminded me of why I decided not to buy Rolls-Royce shares at anything like their current price.

Civil aviation is a complex business

As the old saying goes, one way to become a millionaire is to start off as a billionaire and buy an airline.

Civil aviation is a highly complex business. There are huge numbers of moving parts and the potential knock-on effects of even a small event can be significant. Yet there is often little or nothing that airlines can do about it.

The past several days’ travel chaos resulting from a fire near Heathrow airport is an example. That is totally outside British Airways owner International Consolidated Airline Group’s control – but will surely hurt its business.

Rolls-Royce faces risks it cannot control

That brings me to Rolls-Royce.

One of the things that has long concerned me about its business model is the centrality of civil aviation. Yes, power and defence are also part of Rolls’ business. But civil aviation remains critical and so if it does poorly, it is hard for Rolls to do well overall.

That matters because civil aviation is prone to sporadic unforeseen challenges that can shut down demand almost immediately.

The closure of Heathrow is a small example, but it serves as a useful reminder of far more wide-ranging issues, from volcanic clouds to terrorist attacks and pandemics.

All of those can hurt passenger demand significantly, leading airlines to scale back spending on new engines or servicing existing ones that are being used less than usual.

Lots to like, but not the price

Why does that matter to me as an investor?

After all, Rolls has proven it can bounce back from such a challenge. The pandemic brought the venerable aeronautical engineer to its knees. But the Rolls-Royce share price has soared 548% in five years and reinstated its dividend.

A combination of solid business performance, tight financial discipline, and aggressive target-setting has helped excite investors about the long-term potential for the company.

All of that looks good to me too – and I would happily buy into Rolls-Royce if I could do so at what I see as an attractive price.

But it is trading on a price-to-earnings ratio of 27. I see that as racy for a mature industrial company operating in a historically cyclical industry that itself has a long track record of big swings in performance.

With the right margin of safety that would be something I could live with. As the Heathrow meltdown has shown once more, however, civil aviation is a fragile industry prone to significant disruption at zero notice that it outside airlines’ control.

That poses a demand risk for Rolls-Royce and the current share price offers me an insufficient margin of safety to reflect that risk, in my view. So I have no plans to invest.