Italy special: Venetian vision

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Alenia subsidiaries Superjet International and Aeronavali are aiming to benefit as Venice prepares to be the Russian regional jet's second home

It is perhaps fitting that a city as dependent on keeping up appearances as Venice has been chosen to host the completion centre for Westernised versions of the Sukhoi Civil Aircraft (SCAC) Superjet 100 regional airliner. All is not what it seems behind the elaborate facades of the city's historic buildings, as any nighttime visitor can see for themselves. The tourist trade is thriving, but the lights are off in many of the apartment blocks because relatively few people now live in the old city.

But behind the scenes at Superjet International - the Alenia/Sukhoi joint venture set up to certificate, sell and support the Superjet in Western markets - there is plenty of activity.

Despite the fact that Venice was not the first choice for the new company's headquarters (the partners initially favoured Toulouse), it has a lot to offer, not least of which is the opportunity to form a symbiotic relationship with Alenia-owned maintenance and modification specialist Aeronavali, which has its headquarters in Venice.

"It's well known that the original idea Alenia had was to directly involve ATR in this business," says Alessandro Franzoni, chief executive of Superjet International, which is 51%-owned by Alenia. "The first step was to make sure Alenia could buy the other 50% of ATR [from EADS]. This was not possible, so we looked around to see what other capabilities we had in our system that made sense to involve in Superjet International."

Green Superjets will be flown to Venice for cabin completion work. They may also have upgraded avionics fitted

The Aeronavali facilities at Venice Marco Polo airport offer sufficient spare hangar capacity to accommodate the Superjet completion line, as well as a paintshop and office space for the marketing venture's headquarters staff. "Last but not least we have also got [Aeronavali's] competencies and skills," says Franzoni.

Aeronavali has experience of the engineering tasks that need to be completed to obtain a supplemental type certificate from the European Aviation Safety Agency, for the completion work that Superjet International will perform on aircraft arriving from Russia. "These skills are close to the ones we need - probably closer than anywhere else within Alenia Aeronautica. Once it proved to be not feasible to buy out ATR, we managed to convince our partners this was a very good solution," says Franzoni.

The green Superjets will be purchased by Superjet International and flown from Sukhoi's Komsomolsk factory to Venice for cabin completion work, and may have upgraded avionics fitted. Alenia has also signed an agreement to acquire a 25% plus-one share of SCAC.

SUPPORT NETWORK

Franzoni says that although the original plan was for Superjet International to use the ATR support network in Toulouse, the new Venice-centred approach will work because "we have knowledge of ATR in Superjet International. The main reasons for us to use synergies from ATR we can satisfy anyway."

But there are no plans to transfer ATR employees seconded from Alenia back to Italy. "We don't want to affect the business of ATR. We envisage very few [ATR staff] - three to four maybe - might be asked to join us, but there is not competition on resources," says Franzoni.

More people are likely to move between Aeronavali and Superjet International, however. Current plans envisage Superjet International's workforce growing to 350 in the next few years, of which 100 will work in the Russian support branch.

Of the remaining 250 Superjet International staff, there "might be a significant number coming from Aeronavali...50 to 100 that would be from Aeronavali and moved progressively to Superjet International. The total number of [Alenia] employees in Venice is going to increase, by a small amount," says Franzoni.

 
© Aeronavali
Aeronavali became a certificated E-3A repair station in 1986

The Superjet 100 is due to fly for the first time by the end of this year. First delivery to Russian launch customer Aeroflot is set for October 2008. The first handover from the Venice delivery centre will be to ItAli Airlines, the Western launch operator, in December 2009.

The arrival of Superjet International in Venice should help Aeronavali to smooth out the cyclical peaks and troughs in demand that it faces in its traditional markets. "The business where Aeronavali is engaged now is very competitive - it's not very easy today to compete in that kind of business," says Franzoni.

SHARED RESOURCES

"We can help by sharing administrative resources, and by saturating the existing [Aeronavali] facilities. The hangar for completions after the initial stage will be dedicated to us. We will talk about transferring the asset to us. When we reach our 'steady state' situation, what I envisage is that we will have our own resources."

In the initial ramp-up phase, however, the Superjet completions will be performed by Aeronavali. "Certainly if in the next three to five years the business of Aeronavali will have a limited downturn, I don't see any problem in more than compensating for that in terms of how the growth of our business is concerned," says Franzoni.

Alenia and Sukhoi estimate Superjet International's sales to Western customers will account for around 70% of Superjet-family production. Faced with a downturn in the military sector, the Superjet work "will make it easier to go through this very difficult period of time for Aeronavali. In the eurozone it will be hard for everybody right now to compete," adds Franzoni, in reference to the problems the weak dollar is causing for European aerospace firms.

Alenia and Sukhoi are targeting sales of 1,800 aircraft from the Superjet family over the next 20 years, from a total potential market for jets seating up to 120 passengers of 6,800 units. They also aim to secure orders for around 300 aircraft from Western customers through Superjet International by 2010.

 
Franzoni: Superjet will help peaks and troughs

In addition to marketing and supporting the Superjet family in Europe, the Mediterranean, North and South America, Africa, Oceania and Japan, and customising aircraft for operators in these markets, Superjet International will be responsible for developing VIP and cargo variants and selling them worldwide. The latter products will take the business even closer to the core competencies of Aeronavali.

"The cargo version in particular is a typical line of business for Aeronavali," says Franzoni. "This might be a subcontract to Aeronavali, for example. We are just in the process of defining our business modelwhat will be a 'structural buy' from Aeronavali?"

Aeronavali: a brief history

  • 1947 Founded at Lido airport, Venice
  • 1963 Becomes US Federal Aviation Administration-approved repair station
  • 1968 Moves to new facilities at Venice Marco Polo International airport
  • 1981 Acquired by Aeritalia (known today at Alenia Aeronautica)
  • 1985 Exclusive licence for McDonnell Douglas DC-8 cargo modifications
  • 1986 Certificated as NATO Boeing E-3A support and repair station
  • 1991 Exclusive licence for McDonnell Douglas DC-10 cargo modifications
  • 1994 Acquires Capodichino plant in Naples, with Boeing 707 tanker and Alenia G222 programmes
  • 1995 European Joint Aviation Authorities maintenance approval
  • 2000 Acquires Brindisi plant, with Lockheed Martin C-130H maintenance programme
  • 2002 Begins Boeing 767 tanker work
  • 2003 Gains exclusive licence for 767 cargo modifications
  • 2003 Strikes C-130J maintenance agreement with Lockheed
  • 2006 New company name and logo