Transcript Slide 1

The MRO Sector in the UK and
prospective areas for
collaboration
Alan Fisher
A|D|S
UK Membership,
International Sales and
Networking Support
11 February 2010
The premier Trade Organisation advancing UK AeroSpace, Defence and
Security Industries globally
About A|D|S
ADS Group Limited (A|D|S) is the trade organisation
advancing UK AeroSpace, Defence and Security
industries, with Farnborough International Limited as
a wholly-owned subsidiary. A|D|S also encompasses
the British Aviation Group (BAG).
Advancing UK AeroSpace, Defence and Security Industries
The premier Trade Organisation advancing AeroSpace,
Defence and Security industries globally
The A|D|S industry sectors are Europe’s number one and are second only to the US
globally. We employ around 500,000 people across the UK and generate around £60
billion per year to the UK economy and £25 billion in exports. Our industry will help
re-balance the economy away from its dependence on financial services to deliver a more
sustainable future for Britain.
Our industries offer an exciting future for the UK’s bright young minds and for the economy
as a whole as we spearhead the recovery from the recession. Whether it be creating new
technologies to support our armed forces and security authorities to keep us safe or
delivering innovation to reduce still further the emissions from aircraft and support
everyday activities or disaster relief from space.
Advancing UK AeroSpace, Defence and Security Industries
Civil Aerospace
Aerospace is an attractive
growth sector in which the
UK can continue its
winning ways.
Advancing UK AeroSpace, Defence and Security Industries
Defence
The UK defence industry
represents ten per cent of
the UK manufacturing, is
number one in Europe
and second only to the US
globally, employing over
300,000
people
and
generating over £35 billion
per year to the UK
economy.
Advancing UK AeroSpace, Defence and Security Industries
Security
The UK security industry
comprises 8,000
companies and ‘UK
Security’ employs around
6,000 people.
Advancing UK AeroSpace, Defence and Security Industries
Space
The space sector in the
UK grew 9 per cent per
annum between 1999 and
2007 and it is likely to
grow from £6bn in 2008 to
£40bn by 2030.
Advancing UK AeroSpace, Defence and Security Industries
A|D|S and the SME community
Delivering the SME promise
•
A|D|S represents over 800 SME Members
throughout the UK in the Aerospace,
Defence, Space and Security environment.
•
A|D|S has strengthened its position in how it
serves this diverse community best and how
it intends to enhance services so that A|D|S
can live up to its commitment to address the
challenges facing the SME industry, and
provide effective solutions.
A|D|S has produced two documents
outlining what A|D|S can do for SME’s
and our priorities for Government
Advancing UK AeroSpace, Defence and Security Industries
International Footprint
The international scope of A|D|S reaches beyond the
existence of A|D|S offices in countries outside of the UK.
Through memorandums of understanding with National
Trade Associations and located representatives we are
able to have close working relationships with many
international markets.
Advancing UK AeroSpace, Defence and Security Industries
International Footprint
International Office
MOU with National Trade
Association
Representative
Developing Country relationships
Advancing UK AeroSpace, Defence and Security Industries
In country support - Toulouse
Aims and Objectives
To facilitate business development opportunities
through value-added services to meet individual
company objectives.
To provide representative facilities in Toulouse
with a view to generating market access
opportunities for business development
activities.
Advancing UK AeroSpace, Defence and Security Industries
In country support - India
Purpose:
•Setting up your company’s operations in
country
•Building a distribution channel
•Identification of potential customers and
partners
•Due diligence activities
•Dissemination of market intelligence and
opportunities
•Promotion of products and services
•Raising profile of your company at trade
shows, conferences, seminars, through
publications, media
•Expansion of your reach globally
•Ensuring your company’s voice reaches the
target audience, both at international forums
as well as individual organizations
Advancing UK AeroSpace, Defence and Security Industries
Farnborough International Ltd
Farnborough International Ltd (FIL) is a subsidiary
company of A│D│S, the trade organisation advancing
UK AeroSpace, Defence and Security industries. FIL
has a three-strand business as the organiser of the
biennial Farnborough International Airshow (FIA),
operator of Farnborough International Venue and
Events (FIVE), and as international consultants for civil,
defence and business aviation events including Bahrain
International Airshow 2010 (BIAS) and India Aviation
2010.
Advancing UK AeroSpace, Defence and Security Industries
The Future of UK Aerospace
Maintenance, Repair, Overhaul
and Logistics (MRO&L)
Advancing UK AeroSpace, Defence and Security Industries
Introduction to the Sector
• Vibrant and dynamic
component of the overall
UK aerospace industry.
• Critical capabilities in
aircraft maintenance, aero
engine and component
repair and overhaul
• Operational and logistics
support enabling safe
efficient aircraft operations
in both civil and military
environments.
• Provides profitable, longterm business growth.
Advancing UK AeroSpace, Defence and Security Industries
Size of the Sector
Global Annual turnover is $120bn
In the UK alone:
• Annual turnover in excess of
$10bn representing an 8% share
of Global Market
• 30% of UK Aerospace Revenues
• Over 450 companies operate in
this Sector in the UK
• Over 30,000 people employed
Advancing UK AeroSpace, Defence and Security Industries
Global breakdown of Revenues
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Line maintenance $40bn
Engine overhaul $26bn
Airframe related $25bn
Component Overhaul & Repair $22bn
Advancing UK AeroSpace, Defence and Security Industries
Sustainability of the MRO&L Sector
Whilst the air transport MRO&L
sector did decline in 2009 due to
the recession, the recovery is
expected to drive a long-term
global growth of 3.2% per annum
(in constant 2009 $). In military
MRO&L, despite the slow decline in
the fleets, the continued retention
of older aircraft and the increasing
cost of keeping these aircraft flying
means a small positive growth is
expected.
Advancing UK AeroSpace, Defence and Security Industries
The UK and the MRO&L Sector
The UK plays a significant role in
the global MRO&L market and
the sector represents a
significant component of the
overall UK aerospace industry.
Sustaining and improving the
competitiveness of this sector
remains highly desirable.
There are a number of major
trends changing the dynamics of
the MRO&L business.
Advancing UK AeroSpace, Defence and Security Industries
Market Trends, Opportunities
and Challenges
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Supply Chain Globalisation
Technology Developments
Increased Outsourcing
Service Orientation
Advancing UK AeroSpace, Defence and Security Industries
The Indian Civil Aviation Market
• Indian economy growing at the
rate 8.5% per annum.
• Aviation market to grow at the
rate 25% per annum.
• India will become one of the top
5 civil aviation markets in the
world. Present ranking is 9th..
• India has 454 airports and
airstrips - 16 are international
airports.
Advancing UK AeroSpace, Defence and Security Industries
Indian Market Growth Potential
• Investment opportunities in civil
aviation by 2020 estimated us dollars
110billion
• Approximately $80 - $90 billions in
aircraft procurements and $20 billions
in airport infrastructure. (source;
Investment Commission of India)
• Boeing and Airbus Industrie both
forecast that approximately 1100
aircraft will be procured by India by
2025
• Passenger growth 18.7% per year - in
2010 passengers flown were 520
million.
Advancing UK AeroSpace, Defence and Security Industries
Indian MRO&L Market
• Global growth rate 4% per
annum by 2020 global
MRO market $65 billions .
• India’s MRO market $1.17
billion in 2010.
• Projected to grow to $2.6
billion per year by 2020.
Advancing UK AeroSpace, Defence and Security Industries
Indian Infrastructure Today
• Air India at Mumbai and Delhi.
• Jet Airways at Mumbai.
• Small aircraft and helicopters Air
Works Mumbai.
• Indemar for small engines and
systems.
• ‘C’ checks for single aisle aircraft at
HAL Bangalore.
• Max Aerospace Mumbai aircraft
systems and avionics.
Advancing UK AeroSpace, Defence and Security Industries
Proposed MRO Projects
• Boeing $100 million at Nagpur.
• EADS JV with NACIL at Delhi.
– EADS will invest $40 million in an
Airbus aircraft facility
• JV between Malaysian Airline (MAS)
and GMR Hyderabad International Airport
Limited (GHIAL).
– To be known as Hyderabad Aircraft
Maintenance Company (HAMCO).
– This will be involved in aircraft
maintenance for
commercial aircraft, avionics,
electrical wiring, including simulation
Advancing UK AeroSpace, Defence and Security Industries
Opportunities for UK/India
Collaboration
• MRO being a support industry to aviation industry as a whole, will grow
steadily with the growth in passenger and cargo traffic
– Increasing number of new aircraft requiring support
– The MRO infrastructure has to grow at speed to match these market
conditions
– This is in the area of all support fields i.e. airframe, aero-engines, avionics,
accessories, systems, etc
• India therefore has the great potential to become global MRO hub
– strategic location
– labour cost competiveness
– availability of pool of talents.
• There are Challenges though
– indirect taxes
– customs duty
– service tax etc.
Advancing UK AeroSpace, Defence and Security Industries
Conclusion
• Vibrant and dynamic component of the overall Aerospace
industry
• Indian economy growing at the rate 8.5% per annum
• India’s MRO&L market projected to grow to $2.6 billion per year
by 2020
• The UK plays a significant role in the global MRO&L market
• A|D|S committed to the Indian Market, offices in:
– Bangalore
– Delhi
• Willing to work closely with the Indian Government and
Industrial Organisations to address the challenges that exist
today
Advancing UK AeroSpace, Defence and Security Industries
Questions?
Advancing UK AeroSpace, Defence and Security Industries