On the opening day of the Farnborough International Airshow—primarily a commercial aerospace show—a £50 million defence contracts were signed between a number of UK manufacturing companies and the Ministry of Defence.

Did that deal set the agenda for more mega deals? The answer is a capital No.

While many deals were signed in the realm of defence, the writing was on the wall – defence budget cuts had impacted spending. The fact that one of the top five defence companies Northrop Grumman was not at the show is indicative of the gravity of the economic situation. Though Northrop Grumman said the decision of not being present at Farnborough was ‘in full alignment with its affordability and cost reduction goals. Northrop Grumman continues to focus its international business development activities and resources in areas that better support its customers’ needs.”

Other majors too were subdued exhibitors, while the commercial aerospace sector was placed in a relatively better position.

The UK Prime Minister David Cameron who inaugurated the airshow said, “In a hugely difficult time in the global economy UK aerospace is, quite simply, flying – employing more than 1,00,000 people, turning over more than £20 billion a year, holding a 17 per cent share of the global market. But there can be absolutely no complacency. International competition gets more fierce by the year. The UK has got to fight for every contract and every opportunity.

“That’s why we as a government are doing everything possible to get behind UK aerospace. We’ve established an Aerospace Growth Partnership to make sure that five, ten, twenty years down the line this industry continues to thrive and grow. We’re investing in skills, including 500 masters level qualifications in aerospace engineering over the next few years. We’re pulling every lever we’ve got to make sure those good, high-skilled jobs come to Britain and stay in Britain.

“The further development of Typhoon that we have been working on with our partners is good for the RAF who need this capability, good for our export customers who want it too and brilliant for the British manufacturers and British workers who are going to benefit.

“From this Government you will see nothing less than an unstinting, unrelenting, unflagging commitment to making Britain the best place in the world for aerospace businesses to invest, design, manufacture and export.”

It was loud and clear that the aerospace industry (both military and civil versions) needed all the support to keep sailing in these difficult times. To prop the industry, the UK Ministry of Defence placed an order for 22 full flight simulators for the Airbus A400M. They will be designed and built by Thales in Crawley.

Purple patches

However, in this gloomy scenario, there were some purple patches. The Indonesian Air Force ordered eight A-29 Super Tucano highperformance military turboprop aircraft for light attack and tactical training from Embraer, besides a flight simulator for training military pilots. The President of Embraer Defense and Security, Luiz Carlos Aguiar said that “this decision shows the recognition given to the quality of the Super Tucano by the international market.”

In line with Asia-Pacific and some Middle East markets driving the defence industry, the Royal Air Force of Oman awarded Lockheed Martin a $23 million contract to provide additional sniper advanced targeting pods (ATP) for their F-16 fleet. Similarly, Goodrich Corporation got a foreign military sale (FMS) contract to provide its DB-110 airborne reconnaissance system for the Royal Saudi Air Force F-15S modernisation programme.

India seen as the next R&D hub

According to consultancy firm PricewaterhouseCoopers (PwC) which released a report at Farnborugh, China ranks as the number one country receiving the most (23) manufacturing investments by aerospace and defence companies, followed by India and the US. The UK ranks 7th. However, for R&D investments in the same period, India tops the charts, followed by the US, Russia and the UK.

The report identifies five key areas for programme managers to focus on success: getting systems integration right; solidifying partnerships and joint ventures; agility and speed in business processes; being world citizens in relationship management, and applying a collaborative approach to supply chain management. In the past, companies would specialise in one area such as solutions leadership, operational excellence or customer intimacy. But today’s environment means that they, and their programme managers, need to be top of their game in all three and deliver innovation and affordability in tandem.

Neil Hampson, PwC’s global A&D leader said: “Our report reveals that companies will need a different kind of programme management ‘mindset’ in which partnership, internationalism, inclusivity and innovation rank as highly as ‘getting it out the door’ approach.

“We are in an era of fierce international competition. The winners will need to demonstrate they can use innovation as a key competitive advantage as well as anticipate, understand and match customers’ needs.”

Internationalisation is an important theme in the evolving world of programme management, according to participants. In the report, French defence firm DCNS said whereas exports accounted for only 15 per cent of revenue a decade ago, they now account for 35 per cent and are set to jump up to 70 per cent in the next decade. Similarly EADS’ defence division, Cassadian, has seen its export share rise from 10 per cent to 35 per cent today with a target of around 55 per cent in the next decade.

Russian twist

Amidst all the economic gloom, Russia seemingly is reworking its strategy of propping its industry. There appears to be concerted efforts on various Russian entities to get a rebranding and this was spelt out at a media briefing of United Aircraft Corporation (UAC). One of the strategies mentioned by UAC President Mikhail Pogosyan was that the business model would prop commercial, reducing defence. UAC’s defence revenues, he said, would be brought down from the current 80 per cent to 58 per cent by 2014. UAC, he added, was looking at a more balanced business plan across its three sectors – defence, commercial and transport.

Russian Helicopters, a leading global designer and manufacturer, made its presence felt, announcing a collaboration with AgustaWestland to produce a new light helicopter and showcasing the latest Mi-171A2. It also introduced to the international market for the first time the multi-role medium Ka-62 helicopter. There was a media blitz on their capabilities.

Situational awareness

ITT Exelis, Moog Controls, FLIR Systems and others showcased situational awareness capabilities. Moog unveiled its new intelligence, reconnaissance, surveillance (ISR) and targeting pod, the ProtectIR, which integrates forward-looking infrared (FLIR) imaging systems with an integrated moving map.

ITT Exelis won a $19.6 million contract to provide software enhancements for Integrated Defensive Electronic Countermeasures (IDECM) ALQ-214 on-board jammer for the US Navy’s F/A 18 aircraft.

FLIR Systems broadcast enlivens proceedings Farnborough International Ltd, Flightglobal and FLIR Systems had teamed up to broadcast live coverage of the flying displays. For the first time at any airshow ever, the broadcast included air-to-air footage of the displays, thanks to the FLIR Systems Star Safire 380-HD sensor, mounted on the company’s Pilatus PC-12 aircraft. FLIR Systems which specialises in imaging solutions for airborne missions made an emphatic presence at the show.