by Richard Pettibone, Aerospace & Defense Companies Analyst, Forecast International.
With new management at the helm, Aero Vodochody is looking back to its future. Under the guidance of new CEO Giuseppe Giordo, formerly of Leonardo (née Alenia Aermacchi), Aero Vodochody is looking to revitalize its training aircraft operations.
Under his strategy, the company is looking to regain its stature in the military training market. Key to this effort is redesign of its L-39 trainer, some 3,000 of which were produced during the Cold War. The new design – the L-39NG – updates the jet with a new engine and avionics. With air forces around the world looking for affordable pilot training options, Aero’s new CEO sees an opportunity for a proven, relatively inexpensive aircraft. In various interviews, Giordo has stated that he sees a market for some 5,000 planes over the next 15 years and believes Aero could capture some 250-300 of that need.
The goal is not unrealistic, as the new design could prove attractive to many former users of the L-39. Further enhancing the prospects is a package for retrofit of many of the upgrades into existing L-39s. This option has scored initial success, landing three orders in 2015 – from the state-owned LOM Praha, which trains Czech Air Force pilots; from Draken International; and from the Breitling Display Team. At present, the company reports that it is in talks with at least two potential buyers.
The firm’s other trainer, the L-159, briefly re-entered production in order to fulfill a contract for the Iraqi Air Force. A single two-seater variant was manufactured as part of Iraq’s order of 14 aircraft. The remainder will be refurbished from Czech inventory and reserves.
After years of sitting in storage, the 36 Czech L-159s have slowly been taking to the skies, thanks to orders like the one from Iraq. Another success came from the U.S. when Draken International purchased 21 aircraft. Draken plans to use the aircraft in its commercial adversary combat pilot training services, which it offers on a contract basis to the U.S. military. Having the company’s aircraft in use not only will be good publicity, but it will also boost maintenance and service needs for the model. Finally, the selection by Draken could open up some export potential, most likely in Latin America, where Aero sees some opportunity.
Meanwhile, commercial aircraft component manufacturing will remain a core part of Aero Vodochody’s diversity. Most recently, the company has landed package positions on the A400M and A350 programs. Previous examples include two risk-sharing packages for the design of fixed leading edges – one in partnership with Belgium’s SONACA for the Bombardier CSeries, and another with Embraer for the KC-390. Other programs include airframe production of Sikorsky’s S‑76 and the production of landing gear for the Airbus A320 under a contract to Messier-Bugatti-Dowty.
While it works to re-enter the trainer market, Aero Vodochody will need to continue its commercial subcomponent push and become a “go to” second-tier manufacturer for industry primes. The quality and lower costs of manufacturing in the Czech Republic could very well drive growth for the firm in the years to come.
The Defense & Aerospace Companies series focuses on worldwide aerospace and defense prime contractors and subcontractors. Concise reports provide data on individual corporations regarding recent mergers, restructurings, and joint ventures, along with a Strategic Outlook that examines the company’s strengths, weaknesses, and opportunities. Also included in each report are financial and industrial segment data, snapshot coverage of major programs, and recent U.S. Department of Defense contract awards.
For 50 years, Forecast International intelligence reports have been the aerospace and defense industry standard for accurate research, analysis, and projections. Our experienced analysts compile, evaluate, and present accurate data for decision makers. FI's market research reports offer concise analysis of individual programs and identify market opportunities. Each report includes a program overview, detailed statistics, recent developments and a competitive analysis, culminating in production forecasts spanning 10 or 15 years. Let our market intelligence reports be a key part of reducing uncertainties and mastering your specific market and its growth potential. Find out more at www.forecastinternational.com
