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Aerospace - CEE - Czech Republic | |
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| Aerospace - Czech | |
| Market Overview | |
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| Aerospace - Poland | |
| Market overview | |
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| Overview | Top |
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The Czech Republic, Slovakia, Poland and Hungary are members of the EU and Schengen and these central & eastern European economies have grown rapidly over the last decade, with the region experiencing one of the fastest growth rates (in excess of 5% per annum) of GNP's in Europe.
The key engineering sectors within these countries include transportation (in particular automotive & aerospace), drives & controls, machine tools, electrical and electronic equipment, plastic components and metallurgy. Growth in the advanced engineering sector has been driven by foreign direct investments brought by some of the world leading manufactures who established local operations in the region and stimulated the components industry. Advanced engineering companies are constantly looking for better suppliers. The challenge is to demonstrate that newly offered products and services are equal or superior to those of the established suppliers and that for lower technology products exporters are willing and able to work with local partners. The opportunity also exists to enter supply chains or supply of spare parts. The key factors in competing are price, quality, reliability, and customer relationship, including after-care. Niche export opportunities exist for unique products - e.g. precision engineering components in the motorsport industry. The manufacturing industry accounts for a large percentage of regional economic output, for example it is 30% of the Czech economy (based on gross value added at current prices), where industrial production between 2000 to 2007 grew at an annual rate of 7.1%. |
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| Aerospace - Czech | Top |
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The Czech aerospace industry has undergone a major transformation over the last 19 years. Once the industrial pride of the Czech Republic, the sector nearly collapsed after the transition to a market economy following the tumultuous changes in 1989. From 1948 to 1989, the Czech aerospace industry produced over 6,600 fighter-training jets, 3,600 MIG fighters (licensed production) and 8,000 regional commuters and was solely oriented towards the Soviet Union and its allies. In addition to military planes and regional commuters, Czech aerospace producers also manufactured acrobatic and agricultural planes. The majority of all aircraft were equipped with Czech-made engines. At its peek the industry employed over 30,000 people and is now in the midst of a competitive resurgence, leveraging the benefits of lower-cost labour and a strong aviation heritage. The labour force has been reduced to 8,000 people creating a leaner and more flexible group of firms. Transatlantic alliances are considered critical to the growth of the Czech aerospace sector. Czech firms have cooperative relationships with Sikorsky, Boeing, BAE, Lockheed Martin, and Rockwell Collins. The aerospace industry is geographically concentrated in two centres; Prague and Southern Moravia. |
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Aero Vodochody is the largest aircraft manufacturer and defence company in the country employing more than 1,600 people. In January 2007, Penta (a Czech-Slovak private equity group) purchased Aero and immediately launched a significant restructuring to reduce the firm's debt, which totals over $450 million. Aero continues the modernization of the one and two-seat versions of the L-159, a single-engine subsonic advanced training and light combat aircraft. The company has contracts with Alenia Aeronautica for the production of parts for the C-27J transport aircraft. Apart from Alenia Aeronautica, Aero also cooperates on aerostructure programs with several other leading global aviation manufacturers including:
To date, GE has not manufactured small aircraft engines and Walter nicely fits this gap in their industrial capabilities. LET Aircraft Industries is a traditional producer of gliders and the turboprop commuter L-410. Once a heavily indebted company, LET was bought by the Czech consortium Aircraft Industries in 2005. The new owner restructured the company and developed a bold business plan. The company reported a positive cash flow and $3.5 million profit in 2007. Evektor-Aerotechnik is a producer of ultra-light and light sport aircraft. In 2003, the company began R&D work on a new regional aircraft. The four-seat Cobra is currently undergoing certification. The company is looking for a strategic partner willing to finance the Cobra project and simultaneously continues to develop a 14-passenger aircraft. Compared to the pre-1989 years, the Czech aerospace industry is only one-third the size it once was. The aerospace industry has experienced some lean years since 1989 with many firms adhering to one imperative; make smaller airplanes or perish. A portion of the industry is now staging a full-fledged recovery that benefits from this downsizing, turning its small aircraft focus into an asset. Domestic plane manufacturers have a 30% share of a small but growing ultra-light plane market in the United States. They also hold a similar position in the European market. In 2006, the Czech Republic produced approximately 500 ultra-light planes, though this production accounted for only a fraction of the overall revenue in the Czech aerospace totalling $412 million. Over 80% of aerospace sales in 2007 were export related. Eleven Czech companies, together with 30 companies from 13 European countries, are playing a significant role in the $49 million Cesar research and development project sponsored by the European Union. The Cesar (Cost-Effective Small Aircraft) project will ultimately lead to a give a birth to a 5 to 15 seat small commuter plane with low development and maintenance costs and a reduced environmental impact. |
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| Best Prospects | Top |
Airport development is an important aspect of the Czech aerospace market. Due to its rapid economic growth, rising incomes, and increasing market liberalization - not to mention its central location and popularity as a tourist destination - since 1990, the Czech Republic has realized a steady increase in both business and leisure travellers. The Czech Republic's current airport network consists of 10 international and 58 domestic airfields and runways mainly used for general aviation and taxi flights. The Prague Ruzyne Airport is the main international gateway. Regional airports with significant air traffic include:
Below are the numbers for passenger traffic at the regional airports in 2007 and the growth rate when compared with 2006 figures:
In the Czech Republic there are four main private jet operators. ABS Jets is the largest and it currently manages 6 aircraft - 3 Embraer Legacy 600s, 2 Cessna Citation Bravos and a Learjet 60 XR by Bombardier. Grossmann Jet Service is the leader in the charter service segment and in terms of international acceptance. Silesia Air, operating from Ostrava Airport, specializes in individual air passenger transport (air taxi). Prague-based Time Air has been operating three aircraft - a Cessna Citation C650 and 2 Beechcraft Super King Air BE-300s. Thecompany is looking to become active in a new jet travel segment by managing "very light jets" (VLJ). According to the National Business Aviation Association (NBAA), VLJs are single-pilot jets that weigh 5 tons or less and have five or six passenger seats. They cost one-half as much as the most inexpensive business jets. |
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There are approximately 65 aerospace SMEs in the country whose growth rates are remarkable with revenues doubling annually. These SMEs benefit from the strong aviation heritage that dates back to before World War II and low-cost labour.
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| Aerospace - Poland | Top |
The aerospace industry is an important sector of the Polish economy with a long tradition dating to the beginning of the 20th century. Major production plants including PZL Swidnik, PZL Warszawa, PZL Mielec, PZL Rzeszow were established before World War II and continued their expansion during the Cold War period through very close cooperation with the Soviet aerospace industry. The end of the Cold War brought rapid decline as orders from the former East block countries dried up. The industry suffered for almost a decade, laying off thousands of skilled employees. The situation began to improve in the late 90's. Significant growth of production in this sector resulted from cooperation with the world's largest aerospace companies. Currently, there are approximately 70 aviation companies in Poland employing over 20,000 people. 90% of Poland's aerospace production is exported. Poland is known for production and servicing of:
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| Market overview | Top |
| The aerospace industry is one of Poland's leading high- tech industries. The total value of production within this industry in 2006 was estimated at $700 million. A significant part of Poland's aerospace industry production is exported to the U.S., Canada, France, UK, Germany, Italy, and others. In 2006, Poland exported over $495 million in aerospace products (HS 8801-8805) while in the first three quarters of 2007, Polish exports of aerospace products reached over $126 million. Fluctuations within these figures are the result of single contracts of significant value.
The increase globally in production of civil aircraft has resulted in new development and collaboration opportunities for Polish companies within this sector. Also, rapid growth in production resulted from significant investment by major foreign aerospace firms. There is also an increasing number of smaller local companies engaged in production of parts as Tier 2 suppliers. Increasing production and cooperation ties of the Polish aerospace industry have led to the creation of four engineering centers in Warsaw, Rzeszow and Bielsko Biala. They are involved in the design of jet engines and parts, including discs, turbine blades, airfoils and combustors; Testing of aircraft engines materials and structures; The design of aviation gearboxes and parts for turbine engines; The design and testing of turbine discs, blades, vanes, gearboxes, space propulsion parts. Several other aerospace related firms have initiated industrial cooperation programs in the field of aircraft service and maintenance. For example, LOT Polish Airlines and GE Engine Services have created the firm Central European Engine Services to service engines within the LOT fleet. Military Aviation Works (WLZ Nr1 in Lodz, WZL Nr 2 in Bydgoszcz, and WZL Nr 4 in Warsaw) are negotiating with foreign firms to cooperate in sectors related to engine testing as well as aircraft repair and maintenance. Best Prospects
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The numbers indicate 26% growth on average for 2004, 30% for 2005, and 22% in 2006. In 2007
regional airports recorded growth of approximately 25% (compared to 2006) with the following airports reporting much more significant growth:
The Ministry of Infrastructure (former Ministry of Transport) has confirmed that the existing airport infrastructure cannot handle forecasted growth and that Poland needs to build new airports. The regions targeted by the Ministry or by regional authorities for new airport construction are Mazury (North Eastern part of Poland, near Olsztyn), Podlasie (also North-Eastern part of Poland, near Bialystok), near the city of Lublin (South-Eastern part of Poland), near the city of Kielce (200 km South of Warsaw), Nowy Sacz, Gdynia, Sochaczew, Radom, and Kolobrzeg (North-Western part of Poland). Additionally, the Ministry confirmed that previous plans for construction of a new airport hub with a capacity of up to 50 million passengers were abandoned due to prevailing decentralization trends within the airport industry worldwide. This situation created a need for construction of an additional airport close to Warsaw, which would support, Warsaw Okecie Airport. A former military airport in Modlin (North of Warsaw) was chosen for low-cost carriers and charter flights. It is expected that Modlin Airport will commence operation in 2010. The airport in Bydgoszcz is the first Polish operational airport with shares bought by a foreign investor. In March 2008, Austrian consortium Meinl Airports International Ltd. (MAI) took over 24.9 % of shares of Bydgoszcz Airport with plans to increase its shares up to 49%. Earlier in February 2008 MAI became an investor in Mazowiecki Port Lotniczy Sochaczew (Sochaczew Airport) with plans to take over 40% of shares. Investment plans at regional airports have been limited in the past by financial limitations of regional self-governments (self-governments are partial owners of the regional airports). The situation improved when Poland joined the EU, thus opening access to EU structural and cohesion funds available for infrastructure projects. All Polish airports have major expansion/modernization plans to accommodate the growing number of passengers and cargo shipments. The schemes typically call for construction/expansion of passenger and cargo terminals, extension of aprons and runways and installation of Instrumental Landing Systems (ILS). Key Suppliers Most major international manufacturers of aircrafts and parts are represented in Poland. The Polish aerospace industry is characterized by a large number of small and medium sized companies located in the vicinity of major indigenous producers such as PZL Swidnik, PZL Mielec, PZL Rzeszow, PZL Kalisz. The top local aerospace companies include: WSK PZL Rzeszow - Activity: engineering and design; production transmission gears, engines and components for turboprop engines and jet engines; maintenance services.
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| Prospective Buyers | Top |
| The biggest and most important buyer is LOT Polish Airlines (www.lot.com) with its subsidiary companies Centralwings and EuroLot. Other airlines include Prima Charter and White Eagle Aviation.
There are also small local companies in Poland offering cargo flights and aero-taxi flights. PZL Mielec, PZL Swidnik, EADS PZL Okecie, and other smaller aircraft producers would likely be interested in purchases of various types of parts and equipment.
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| Market Entry | Top |
| For central & eastern Europe to be successful post EU accession, it must be able to compete effectively. Consequently, widespread modernisation of Central & eastern European manufacturing is required. In order to enable Central & eastern European companies to gain direct access to appropriate suppliers, and to create competitive tendering; the MSV initiative is being staged in Brno, from 13 - 17 September 2010 and is sponsored by the Confederation of Industry of the Czech Republic.
International suppliers are being appointed by Intec, who are one of the most prominent providers of export intelligence services for emerging markets world-wide. Approximately 2000 companies will be appointed in order to supply the key sectors. Over 100,000 decision-makers from companies throughout the region, operating within these sectors, will attend in order to meet with those participants who can most effectively supply their needs. Appointed suppliers upon the Programme will be provided with a complete logistical package, covering all the elements of participation specific to each company requirements, listing the following:- |
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Provision of interactive contact list support facility |
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Exhibition site complete with purpose built shell scheme, facia board and furniture |
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Bi-lingual interpreter/hostess |
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Four star hotel accommodation for two in a twin room |
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Transport to and from airport to the hotel and venue |
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All necessary badges, passes, security, cleaning and catalogue entry |
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In order to provide ATOL cover in the UK, flights from London to Prague are booked by Exhibition Travel Services Ltd., who are agents for Commodore International Travel Ltd., holders of ATOL licence no. 1607 |