OGMA hopes defensive strength can bring stable 2009

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Privatisation has brought changes to the corporate culture of Portugal's big maintenance and manufacturing company

In October, Portuguese maintenance and component manufacturing company OGMA won a 10-year extension to its contract to maintain the French air force's 14-strong Lockheed Martin C-130 fleet. The by-the-hour contract covers maintenance, fleet management services and logistical and engineering support, and represents bread-and-butter business for a company with 20 years of C-130 experience and a 90-year history in aircraft and engine maintenance.

PRIVATISATION CHANGES

However, recent years have brought a change in direction for OGMA. In 2003, a decision was taken to privatise what was then a fully state-owned company, and two years later a 65% stake was sold for €11.4 million ($15.1 million) to Airholding, an Embraer-EADS consortium in which the former company held 99% and the latter 1%. EADS has since increased its stake in Airholding to 30%.

Privatisation brought changes to the corporate culture. Additionally, the new owners established a priority to grow its aircraft maintenance business, in civil as well as defence aviation. Where the C-130 and Lockheed P-3 are the main drivers of volume in OGMA's traditionally strong defence maintenance business, the Airbus A320 and Embraer's E-Jets and ERJ-145 are the focus of civil efforts.

In airframe manufacturing, meanwhile, OGMA's main programme is the Pilatus PC-12 single-engined turboprop. Since 1994 it has been producing the fuselage, wings, empennage, rudder and composite fairings for the aircraft, delivering on 18 November the 900th PC-12 assembled at its Alverca, Lisbon base.

ogma 
 © OGMA
Defence aviationaccounts for 35% of OGMA's business

Early this year OGMA reorganised its activity into five business units. Defence aviation maintenance accounts for 35% of business, engine maintenance (30%), aerostructures (24%), civil aviation (8%) and components (3%). Chief executive Eduardo Bonini expects the company will increase its involvement in composite parts manufacturing and aerostructures. "The market demand is high, and composite materials are not so available," he says.

OGMA is also investing in its hydraulic component capabilities. "There we see an opportunity not only to repair and overhaul components coming in with the airplanes that we maintain, but independently support OEMs or customers that need repairs in components," says Bonini. Traditionally a "build-to-print" manufacturer, OGMA aspires to gain programme involvement as a "design-to-build" one, perhaps through a military programme or small executive jet.

Bonini identifies advantages associated with a Portuguese location, including a high level of support from government, strong relations with African nations and cost competitiveness with other European countries. The drawback, as he sees it, is a lack of specialist manpower, which OGMA is seeking to address by working with the education ministry to develop training courses for high-school leavers.

OGMA is cautious in its plans for 2009. "Our main goal is to be stable," says Bonini. "Some airlines we are dealing with are facing difficulties in maintaining their operations. If we can be stable next year like we were stable this year, it will be enough."

It will look to draw on traditional strengths. "We don't see this crisis affecting defence too much, we see it affecting civil aviation much more," says Bonini, who has yet to see any signs of decreasing business in those areas.