Sky's the limit for Irish aerospace industry

Sunday 20/08/2017 - Source: Macro World Investor

The Republic is already a leading centre for aircraft leasing and related services. Now it is ramping up efforts to build links with major manufacturers, writes Ciaran Brennan.

While the Shannon debacle highlights the current state of our airline industry, the State remains a leading centre for other facets of the industry.

At the start of the 1990s, most aerospace activities in the State were the ancillary activities of just two Irish companies - Aer Lingus and GPA.

Today, there are there are more than 160 companies involved in the aerospace industry in the Republic, employing about 5,000 people. This indicates that the scale, ownership and diversity of the industry has changed dramatically in the past 15 years.

On the back of a favourable regulatory and tax environment, the Republic has become a leading world centre for aircraft leasing and related services.

Nevertheless, in terms of employment, aerospace enterprise is still dominated by maintenance, repair and overhaul activities (MRO), with manufacturing activities still on a relatively small scale in volume terms.

MRO activity, which is largely controlled by foreign-owned companies such as Lufthansa Technik, Shannon Aerospace and SR Technics, accounts for about 70 per cent of the workforce.

In this respect, the Republic differs from the other EU countries that are major players in the industry, as their industrial aerospace activities include strong components of original equipment manufacture (OEM) activity.

"It is a scale business and globally the large-scale aerospace environment is dominated by a relatively small number of OEMs, such as Boeing, EADS - parent to Airbus - Pratt & Whitney, Rolls Royce; you're talking about around a dozen companies which dominate aerospace manufacturing, so you can't expect Ireland to suddenly jump in there," says Mark McAuley, executive of the Federation of Aerospace Enterprises in Ireland.

"There is no feasible way that is ever going to happen. The trick for Ireland is to create linkages with those players."

Such a concentration on MRO activity would seem to suggest that the aerospace industry in the Republic is not in the vanguard of research and development, fresh thinking or innovation.

However, McAuley says it would be a mistake to discount the importance of MRO activities - both in terms of their impact on the Republic's reputation in the aerospace industry and the scope of the activities. MRO activities in Ireland include specialist restorations of critical parts of aircraft engines and components, he says.

"These companies employ top-class engineers who are finding new repair solutions that can extend the longevity of engines and of components within engines. There is a huge amount of engineering and innovation going on there," he says.

At the same time, small but significant aerospace manufacturing activity has begun to develop, creating niches in areas such as aircraft composites, on-board internet access, in-flight entertainment technologies, digital documentation and other wireless applications.

Previous efforts by Irish companies to enter the traditional mechanical equipment supply side of the aerospace industry met with little success, not for lack of quality, but because of the country's remoteness from the traditional clusters of aviation activity such as Toulouse in France, according to Jim Lawler, director of industrial technologies commercialisation at Enterprise Ireland.

"Six or seven years ago, we started to look at the sort of things we could do," he says. "We identified that we should be able to grow on the back of the lead that Ireland appeared to have in communications and computer software technology and data management, and see if we could grow business out of that."

Irish companies such as AMT and Skypaq have developed electronic versions of the paper-based technical logs held aboard aircraft, while Airtel ATN supplies airborne and ground data communication systems to airlines, civil aviation authorities, avionics manufacturers and others in the aviation industry.

Unlike the mechanical supply side, which has many legacy companies to compete against, the barriers to entry in these areas of the industry are much lower, says Lawler.

"These are areas of new business and new facilities that didn't exist before. There isn't an incumbent supply base so you can break into that much easier."

Last December, Enterprise Ireland signed an agreement with European Aeronautic Defence and Space (EADS), aimed mainly at increasing the amount of business the group does with Irish companies.

The deal is also aimed at facilitating technology research and development projects between Irish companies and institutions and EADS and its divisions, which include Airbus. This could see annual sales to EADS by Irish companies increase to 35 million by 2012.

A significant part of the agreement is a research and technology collaboration between EADS and the centre for telecommunications value-chain research at Trinity College Dublin and NUI Maynooth.

Airbus and Irish company EireComposites have also agreed to co-operate in the development of innovative processing methods for thermoplastic composites.

"EireComposites is doing a superb job in developing world-class technologies," says McAuley. "That is the direction Irish aerospace needs to take."

EireComposites, which recently became only the second supplier of advanced composite structures in Europe to achieve Nadcap accreditation for composites processing, also won a $2.7 million (2 million) contract to supply aircraft components to Bombardier this summer.

As environmental considerations come increasingly into play, the company is capitalising on the trend toward the use of lighter-weight materials in aircraft.