Defence orders in a tailspin
[By R. Chandrakanth in Farnborough]
On the opening day of the Farnborough International Airshow—primarily a commercial aerospace show—a £50 million defence contracts were signed between a number of UK manufacturing companies and the Ministry of Defence. Did that deal set the agenda for more mega deals? The answer is a capital No.
While many deals were signed in the realm of defence, the writing was on the wall – defence budget cuts had impacted spending. The fact that one of the top five defence companies Northrop Grumman was not at the show is indicative of the gravity of the economic situation. Though Northrop Grumman said the decision of not being present at Farnborough was ‘in full alignment with its affordability and cost reduction goals. Northrop Grumman continues to focus its international business development activities and resources in areas that better support its customers’ needs.”
Other majors too were subdued exhibitors, while the commercial aerospace sector was placed in a relatively better position.
The UK Prime Minister David Cameron who inaugurated the airshow said, “In a hugely difficult time in the global economy UK aerospace is, quite simply, flying – employing more than 1,00,000 people, turning over more than £20 billion a year, holding a 17 per cent share of the global market. But there can be absolutely no complacency. International competition gets more fierce by the year. The UK has got to fight for every contract and every opportunity.
“That’s why we as a government are doing everything possible to get behind UK aerospace. We’ve established an Aerospace Growth Partnership to make sure that five, ten, twenty years down the line this industry continues to thrive and grow. We’re investing in skills, including 500 masters level qualifications in aerospace engineering over the next few years. We’re pulling every lever we’ve got to make sure those good, high-skilled jobs come to Britain and stay in Britain.
“The further development of Typhoon that we have been working on with our partners is good for the RAF who need this capability, good for our export customers who want it too and brilliant for the British manufacturers and British workers who are going to benefit.
“From this Government you will see nothing less than an unstinting, unrelenting, unflagging commitment to making Brit- ain the best place in the world for aerospace businesses to invest, design, manufacture and export.”
It was loud and clear that the aerospace industry (both military and civil versions) needed all the support to keep sailing in these difficult times. To prop the industry, the UK Ministry of Defence placed an order for 22 full flight simulators for the Airbus A400M. They will be designed and built by Thales in Crawley.
However, in this gloomy scenario, there were some purple patches. The Indonesian Air Force ordered eight A-29 Super Tucano highperformance military turboprop aircraft for light attack and tactical training from Embraer, besides a flight simulator for training military pilots. The President of Embraer Defense and Security, Luiz Carlos Aguiar said that “this decision shows the recognition given to the quality of the Super Tucano by the international market.”
In line with Asia-Pacific and some Middle East markets driving the defence industry, the Royal Air Force of Oman awarded Lockheed Martin a $23 million contract to provide additional sniper advanced targeting pods (ATP) for their F-16 fleet. Similarly, Goodrich Corporation got a foreign military sale (FMS) contract to provide its DB-110 airborne reconnaissance system for the Royal Saudi Air Force F-15S modernisation programme.
India seen as the next R&D hub
According to consultancy firm PricewaterhouseCoopers (PwC) which released a report at Farnborugh, China ranks as the number one country receiving the most (23) manufacturing investments by aerospace and defence companies, followed by India and the US. The UK ranks 7th. However, for R&D investments in the same period, India tops the charts, followed by the US, Russia and the UK.
The report identifies five key areas for programme managers to focus on success: getting systems integration right; solidifying partnerships and joint ventures; agility and speed in business processes; being world citizens in relationship management, and applying a collaborative approach to supply chain management. In the past, companies would specialise in one area such as solutions leadership, operational excellence or customer intimacy. But today’s environment means that
Boeing’s C-17 Globemasterer III
Static and flying display of aircraft