Geoff Thomas
For many years, Sweden's Volvo Aero was geared toward producing engines and their ancillaries for domestic military applications. But now it has an extensive range of activities including sales of spare parts for engines and aircraft; sales and leasing of aircraft engines and aircraft; and the overhaul and repair of aircraft engines.
Speaking at Farnborough, Volvo Aero's president and chief executive Fred Bodin explained how the change of emphasis came about.
"Interestingly, our involvement in producing components for the GE F-414-GE-400 engines on the Boeing F/A-18 E/F Super Hornet is the very first time that we've been involved in a military engine that's nothing to do with our domestic air force."
Bodin says that he intends to develop both strands of the business ¡ components and service ¡ in the same way, through a combination of organic growth and acquisitions.
Multi-service
We can never pretend to be a full service provider as we're simply not large enough. However, we describe ourselves as a multi-service provider and we have certain skills in our ability to persuade operators to work with us. For instance, we have a jointly-owned engine leasing company where we're the 49% shareholder along with majority shareholders Mitsubishi and the Bank of Tokyo. "Volvo Aero also owns 86.4% of Florida company AGES which is active in sales and leasing of aircraft engines, engine parts and aircraft parts with representation in 17 countries worldwide."
With Volvo's experience in automobile manufacture it's not surprising that Bodin and his management team have looked closely at whether anything can be learned from car production.
Now that the car business has been sold, to Ford parent company Volvo AB is cash rich and acquisitions are very much on the agenda. "We're talking to several companies," says Bodin, "but there won't be any announcements this week."
Bodin says that the creation of EADS will undoubtedly make a difference to his business ¡ mainly by simplifying the points of contact. He is also keen to continue developing Volvo Aero's relationship with the 'big three' engine makers, as well as with Snecma and MTU. The company is already heavily involved in the CFM-56 that powers much of the international Boeing 737 fleet and when US carrier Southwest Airlines placed an order for up to 290 aircraft, Volvo Aero's share of the $4.5 billion order was a cool $14 million!
On the military front, Volvo Aero's business in this sector accounts for about 14% of the company's total sales. It still supplies technical support for the RM6 engines for Austria's Saab Drakens while it also supplies technical support for the RM8 engines for Sweden's Saab Vigens. But today's main volume is producing and maintaining the RM12 engines for the JAS 39 Gripen ,which will be produced until at least 2007 for the Swedish air force and any export customers like South Africa, which ordered 28 Gripens for its air force last year. Potential buyers include Brazil, Chile, Poland, the Czech Republic and Austria.
Source: Flight Daily News
