This paper discusses some trends and recent advances in model-based Fault Detection, Isolation and Recovery (FDIR) for aerospace systems. The FDIR challenges range from pre-design and design stages for upcoming and new programs, to improvement of the performance of in-service flying systems. For space missions, optimization of flight conditions and safe operation is intrinsically related to GNC (Guidance, Navigation & Control) system of the spacecraft and includes sensors and actuators monitoring. Many future space missions will require autonomous proximity operations including fault diagnosis and the subsequent control and guidance recovery actions. For upcoming and future aircraft, one of the main issues is how early and robust diagnosis of some small and subtle faults could contribute to the overall optimization of aircraft design. This issue would be an important factor for anticipating the more and more stringent requirements which would come in force for future environmentally-friendlier programs. The paper underlines the reasons for a widening gap between the advanced scientific FDIR methods being developed by the academic community and technological solutions demanded by the aerospace industry.