IAe sells last batch of NC212s & plans new 19-seater

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Indonesian Aerospace (IAe) aims to develop a 19-seat passenger aircraft, possibly in cooperation with other Southeast Asian countries, as part of a new five-year business plan.

Chief executive Edwin Soedarmo says the new project is being pursued to offset the upcoming shutdown of IAe’s NC212 production line. IAE plans to stop license-building the CASA-developed 26-seater after delivering a final eight aircraft next year, four to the Indonesian police and four to Indonesian charter carrier Sabang Merauke Raya Air Charter.

Soedarmo says Sabang Merauke, which already operates two NC212s, recently signed a deal to buy four NC212s to be finished next year and one NC212 which is already in IAE’s inventory and will be delivered shortly. IAe has built almost 100 NC212s since 1976 for civilian and military customers, as part of a licensing agreement with Spain’s CASA.

Soedarmo says IAe is now courting partner countries in Asia, who “would share in building the [new 19-seat] aircraft and would be committed to buying the aircraft”.

A consortium consisting of Brunei, Indonesia, Malaysia and Thailand is “one possibility” under discussion, according to Soedarmo. He says IAe, which is owned by the Indonesian government, is also discussing forging a partnership with a Chinese company.

“We’re looking to strengthen the market,” he says. “The best way to do this is to cooperate with other Asian countries.”

He says IAe prefers not to partner with a Western company but acknowledges some technology may have to be imported from outside Asia.

IAe also plans to continue manufacturing CN235s, but only the military variant.

The CN235, seating up to 44 passengers, was developed as part of a joint venture between IAe and CASA. About 50 aircraft have been built, mostly for military customers.

“The 235 can be civilian or military. For civilian, we tried our best, but I think the 235 is much more suitable for the military,” Soedarmo says.

He explains the aircraft is too heavy for the civilian market and a structural modification would have to be pursued for the aircraft to be sold to airlines. He says IAe may later do such a modification if there is market demand but right now there is no interest for such an aircraft.

IAe also aims to expand its aerostructures business as part of its new five-year business plan. Soedarmo says the company is now bidding for a BAE Systems contract covering Airbus A320 leading edge components.

IAe already manufactures small components for the Airbus A380 and Boeing 757. The company also has an aircraft maintenance division that services military helicopters, military transports as well as airline-operated NC212s and CN235s.

The company is seeking $73 million in short-term loans from banks to complete existing contracts and another $100 million in the medium-term to pursue its new business plan. IAE is also in talks with several Asian countries over possible equity stakes.

The new five-year business plan envisions a 3,400-employee workforce and annual revenues of $150-$200 million, up from the current $120 million. IAe had 9,600 employees prior to a company-wide shutdown in July that resulted in all workers being suspended.

IAe quickly rehired 2,700 employees and re-opened for business after ten days. This month the company agreed to rehire another 2,200 employees who passed a reselection test. But Soedarmo says 1,500 of these employees will be redirected this week to an IAE-paid redeployment programme, where they will be trained for non-aerospace jobs.

Soedarmo acknowledges the resulting workforce of 3,400 is too many, but says IAe wants to keep extra employees “to ensure we have the capability in hand” for expansion.

“We expect within the first quarter to get some additional workload,” he says.

Soedarmo took over as IAe’s CEO in August and was tasked with preparing a new business plan and leading a massive restructuring effort. He has worked at IAe, formerly known as IPTN, for over 20 years, the last three as head of its engineering and research group.