TransDigm Group might not be an aerospace name that resonates, but the manufacturer is headed for billion-dollar annual turnover via a strategy of making small components that a passenger never considers, but are nonetheless vital in getting an aircraft to function. Electro-mechanical actuators, pumps and valves, electric motors, audio systems, latches and locks - the product range rolls on.

Cleveland, Ohio, US-based TransDigm has been stealthily climbing the Top 100 for several years - from 72 in 2008 to 69 in 2009 and 64 in the latest rankings, with sales of $828 million in 2010.

Delving into the product range gives clues as to why: TransDigm claims more than 95% of its products as proprietary items to which it owns the design. About 60% of its revenue comes from aftermarket sales: even if orders for both the civil and military aircraft sectors were to slow simultaneously, airlines and squadrons would still have to keep their existing equipment in the air. As an added benefit, notes TransDigm, aftermarket revenues historically produce a higher gross margin.

Sikorsky CH-53
  © Sikorsky
The Sikorsky CH-53 is one TransDigm destination

TransDigm has traditionally looked to acquisitions to increase revenues, and 2010 was no exception. The firm bought four companies in the calendar year - two beyond its fiscal year, which ended on 30 September. The assets picked up were valve maker Dukes Aerospace, sensor specialist Semco Instruments, the actuators business of Teleflex and, ­largest of all, McKechnie Aerospace, a holding company consisting of seven major operating units that primarily sell proprietary engineered components. McKechnie joined the TransDigm fold in a $1.27 ­billion deal.

In its annual report, TransDigm notes that "our market research tells us there is no shortage of good prospects" in both the near and long-term, and that its acquisition policy would continue. Among 2010's highlights were development work on the Airbus A380 and A350 cockpit security systems, which in turn led to a contract award for the cockpit security door module for the Mitsubishi Regional Jet.

Mitsubishi MRJ
 © Mitsubishi
Work for Airbus led to a Mitsubishi Regional Jet contract for TransDigm

The company also completed development work on the digital audio system and several other components for the Boeing 787.

In the military sector, the company won contracts to enhance the capabilities or extend the operational life of several helicopter types, including the Boeing CH-47 Chinook and Sikorsky CH-53.

In the fixed-wing sector, TransDigm won work on the Boeing P-8A Poseidon maritime patrol aircraft and the Northrop Grumman RQ-4 Global Hawk.

TransDigm believes its ­momentum will continue through 2011.

AT A GLANCE

  • Top 100 rank - 64
  • HQ - Cleveland, Ohio
  • Aero revenues - $828m
  • Sales growth - 8.7%
  • Operating margin - 43.8%
  • ROCE - 14.2%
  • Employees - 2,400
  • CEO - Nicholas Howley

Source: Flight International

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