Four years ago, Aero Vodochody was fighting for its life. The Czech aerospace champion was back under reluctant government control after its one-time saviour Boeing ended an unhappy six-year relationship. Its two flagship programmes - the L-159A advanced light combat aircraft for the Czech air force and the Ae270 utility single-turboprop being developed with a Taiwanese partner - had stalled. With revenues plunging and the company deep in the red, despairing politicians fired the chief executive and warned that unless a buyer came forward, Aero Vodochody would be declared bankrupt.
The situation today could scarcely be more different. Celebrating its 90th anniversary at the Paris air show, Aero Vodochody (named after the village near Prague where its factory is sited) announced record profits in 2008 of $23.6 million on $250 million revenues. It also clinched the latest success for its growing aerostructures business: a deal to design, develop and manufacture wing fixed leading edges for the Bombardier CSeries, in partnership with Belgian manufacturer Sonaca. It joins contracts that include building airframes of the Sikorsky S-76C helicopter, the centre wing box for the Alenia Aeronautica C-27J and door subassemblies for Embraer's 170/190.
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ACQUISITIONS
The company - bought by Czech/Slovak investment company Penta in 2006 - is also looking at acquisitions with a view to creating an aerospace group in central and eastern Europe. It is competing on a shortlist of two against Italy's Finmeccanica for state-owned Polish helicopter manufacturer PZL Swidnik, with Warsaw due to make a decision in July.
Late last year, it made an unsuccessful attempt to buy Romanian supplier IAR Ghimbav and says it is still interested in opportunities in that country.
Two decades from the fall of Communism, several eastern European governments - including Poland, Romania and Ukraine - are still wrestling with what to do with large state-owned chunks of their aerospace industries, which despite a heritage of innovative product development and engineering skills, are often poorly managed and ill-equipped to compete on the world market.
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Aero Vodochody president Igor Hulak says his management team's experience in transforming an ailing state-run airframer into a first-tier supplier that can stand on its own feet globally makes the company an ideal platform for an "new aerospace holding based in the central European region", adding: "We can provide that restructuring know-how."
Although it had already started down the road of building parts for Western manufacturers the previous decade, the decision to firmly reorient itself from a predominantly military airframer to an aerostructures supplier in the mid-2000s secured Aero Vodochody's future. It was a route partly foisted on the company by the cash-squeezed Czech government's decision in 2004 to dispose of 47 of the 71 L-159s it had recently taken delivery of from Aero Vodochody, dealing a blow to export prospects.
Since then, the company has successfully built a portfolio of aerostructures contracts, winning work on the C-27J and the E-170/190, as well as with EADS (Airbus A320/A340 subassemblies) and Saab (Gripen JAS-39 Pylons). The CSeries contract takes the business a step further. "It is extremely important. It will be the first time that we have been involved in a major engineering project from the beginning, with complex design input," says Hulak. "The way into the future for us is in terms of co-operation with the OEMs. Five years ago, we were 80% dependent on the (Czech) military for our revenues. Today, that figure is 15-20%."
Hulak is quick to stress, however, that the Czech military - for which Aero Vodochody built its first military trainer, the A-1, in 1919 - is not being overlooked. "Our domestic business is small but important and we are working hand in hand with the government and air force to market the L-159," he says.
There has been some success of late, with an arrangement with EADS to swap five of the aircraft for a C-295 transport and with interest from Bolivia in acquiring another six. Any overseas sales are likely to mean welcome long-term support contracts for Aero Vodochody. Thanks to the transformation of the business, however, such deals are no longer make or break.
Source: Flight International
