PARIS: Interview with Alenia chief Giuseppe Giordo

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Finmeccanica's aeronautics business is aggressively pursuing its restructuring plan, looking to the future with renewed legacy products and new-generation unmanned platforms to be developed under multinational programmes, says Alenia Aermacchi chief executive Giuseppe Giordo

What are the latest developments in Alenia Aermacchi's restructuring plan?

The restructuring plan our company is aggressively pursuing under Finmeccanica guidelines is moving ahead much better than expected, as testified by our parent company's published 2012 results. We have fully completed in advance the engineering and industrial process integration between the former Alenia Aeronautica and Alenia Aermacchi companies, while site rationalisation is evolving well, as well as the introduction of efficiencies at all levels. Headcount rightsizing is progressing according to plan in parallel with reduction of the workforce's average age to 40, compared with the initial 46 years, while the direct and indirect procurement cost efficiencies are proceeding better than expected with overall costs reductions of about €250 million ($330 million). Thanks also to the achievement in M-346 and C-27J proprietary production contracts and higher production rates for aero-structures, in 2012 the company registered an 11.4% increase in revenue to €2.9 billion and a €104 million EBITA adjusted figure compared with the negative results of 2011. The achievements for the first quarter of 2013 are even better, with a 15% revenue increase compared with the same period in 2012, together with better EBITA figures, the best way to celebrate the 100th anniversary of the Italian aeronautics industry.

guiseppe giordo

 Alenia Aermacchi

Alenia Aermacchi is participating in both the European Eurofighter Typhoon and US-led F-35 Joint Strike Fighter combat aircraft programmes. How is it plotting a course in the manned and unmanned combat and surveillance platforms sector?

In the past decade, Alenia Aermacchi has gained great experience with the Sky-X and Sky-Y unmanned platforms and related control suites, which opened the way to a regional public land-monitoring project and the international programme for the Neuron unmanned combat air vehicle, which flew for the first time in late 2012. Today, we are working on a new generation MALE (medium altitude long endurance) UAS, development of which could not be launched outside a government-to-government agreement. However, such a platform could see the light in the 2017-18 period, while for an operational derivative of Neuron UCAV, it will be necessary to wait until 2020-22. On manned platforms, the Eurofighter consortium is transforming the Typhoon into a potent multirole combat platform, providing E-scan radar, a plethora of advanced-guided weapon systems, and net-centric warfare capabilities. Among hot international sales campaigns, the Middle East region offers opportunities in the United Arab Emirates, Qatar, Saudi Arabia and Kuwait, where Alenia Aermacchi is leading the consortium's efforts. In the F-35 JSF programme, our company is working alongside Lockheed Martin to put into service and manage the second worldwide aircraft final assembly and check-out facility. As second source supplier for F-35 wing components and assembly, Alenia Aermacchi recently received a $141 million contract as part of a wider strategic agreement for up to 800 wings, recognising our knowledge in advanced aero-structures. Additional contracts are foreseen for the assembly and support of F-35s in the European Continental-Mediterranean area.

Does the recent prototype accident impact on the M-346 advanced/lead-in trainer platform's achievement of full operational capability? What about other training segments? Alenia Aermacchi has also worked hard to relaunch the C-27J tactical transport as a proprietary product. What are the next steps?

The recent M-346 master prototype accident is not expected to delay the aircraft's certification as a full trainer later this year. We have found the issue and developed a recovery plan, although I won't release further information and the aircraft will stay on the ground until official investigations are complete. Production of aircraft for the Republic of Singapore and Israeli customers is progressing according to schedule, while all of the Italian air force's first batch of aircraft are close to leaving the assembly line. We expect to compete for the T-X programme in the USA, where Boeing's still-to-come solution is not seen as a competitor. We offer complete training solutions with aircraft, including the glass cockpit SF260TP and a renewed basic jet trainer design, to be unveiled at Le Bourget. In the transport segment, thanks to efficiencies in the production process, we compete worldwide with the C-27J tactical aircraft now at lower costs and with much better performance than our competitor. We therefore recently launched a multirole version capable of accomplishing a range of missions, from ISR to gunship. To enter the market in 2014, the gunship version under development with ATK has successfully completed the first firing trials with a 30mm gun in the previous months to the air show. In addition to hot sale campaigns in the Middle East, South America and Canada, the US Department of Defense recently published an open request for information, to which we responded, about the possible production of the C-27J, based on the 2012 US Congressional language, which required to spend the remaining $818 million of funding allocated to the programme and already subjected to sequestration.

The commercial aircraft business of Alenia Aermacchi is destined to increase both in terms of new platforms and advanced aerostructures development and production. How is the company looking to compete in both sectors? Where are the opportunities for the special missions sector after successful restructuring of the Turkish programme?

While successfully continuing to sell and deliver the -600 series family though the ATR joint venture with EADS, we believe there is an important market segment to be covered with a new-generation, 90-passenger turboprop aircraft. We are confident to be able to launch, together with our partner, the business plan for the new platform development by the end of 2013. The new ATR 72-600 platform forms the basis of our maritime patrol and antisubmarine warfare solutions, which are being marketed around the world. Our commitment towards the customer helped us to relaunch the Turkish Navy programme while meeting the schedule for delivering the first aircraft to the Italian defence ministry in 2014. Moreover, the recent agreement with Turkish Aerospace Industries enlarges the marketing possibilities of the platform, offered with both Finmeccanica and Thales mission suites. Leading the SuperJet International joint venture responsible for Sukhoi Civil Aircraft 100-seat Superjet 100 marketing, sales, training and aftersales support in the western world, we are exhibiting at Le Bourget the first aircraft in the full colours of Mexican airline Interjet. There is no better selling ace than the operator which will use and supports the aircraft every day as soon as it enters into service. We are continuing to invest in advanced aero-structures, a process which enabled us to overcome Boeing 787 component difficulties, while increasing production rates in the international programmes we are committed to. We renegotiated Dassault and Airbus contracts to fulfil higher delivery rates, while continuing to discuss current and future programmes with Boeing, and achieving the programme schedule on the Bombardier CSeries aircraft family.