Nestled at the heart of ITP Aero’s campus near Bilbao is a timber-framed farmhouse – a caserio in Spanish or baserri in the local Basque language – a hint at the Zamudio site’s bucolic origins amidst the rolling hills on the city’s eastern edge.
In fact, with its roadways lined by ancient oak trees and green spaces dotted with picnic tables, it feels more like a public park than a manufacturing hub.
Externally there are few hints at what is actually made here; the only clue is the large aero engine – a Rolls-Royce Trent 1000 – installed inside a large glass structure, located, for maximum contrast, right next to the centuries-old farmhouse.
It is in part ITP’s relative youth that explains the surroundings. Founded just 36 years ago, in 1991 it was one of the first tenants of the technology park it now calls home, with the caserio retained as part of the construction (ITP now uses it as a meeting space).
In addition to the headquarters building, there are three manufacturing shops on the site - fabricating casings, turbine discs and blades, for example – with another four sites of varying sizes in the greater Bilbao region alone.
Founded in 1989 as Industria de Turbo Propulsores – the ITP Aero moniker has since been adopted – its creation was spurred by Spain’s entry into what became the Eurofighter programme.
Initially a joint venture between Rolls-Royce and Spanish engineering firm Sener, ITP was the country’s contribution to the Eurojet EJ200 that powers the multirole type.
While Rolls-Royce eventually acquired its partner’s stake, when Covid-19 decimated its revenues in 2020, the UK engine maker took the strategic decision to sell assets to raise cash.
One of the businesses divested as part of that fire-sale was ITP, with private equity firm Bain Capital acquiring the firm in 2022 for €1.7 billion.
Eva Azoulay, ITP chief executive, says without the presence of Rolls-Royce in the background, working with other engine makers has become easier.
“There’s an independence that opens doors for us to work with other OEMs, or to expand with existing OEMs, with a different mindset.
“We are not owned by a competitor in part or in whole and that really changes the dynamic of the conversations.”
This shift has helped to fuel the company’s revenue growth, she argues, although acknowledges that the “foundation was there previously” – built on the company’s successful positioning on multiple commercial engine programmes.
While the Rolls-Royce Trent series is the most obvious – ITP builds the low-pressure module alongside other key components for the widebody powerplants – it is also a risk and reward sharing partner (RRSP) on the Pratt & Whitney geared turbofan family of narrowbody engines.
Bain has also championed investment in its new asset: just weeks into its ownership, the private equity firm signed off on a €25 million project to establish a new research and technology centre on the Zamudio campus.
Called ADMIRE, the facility was inaugurated in February, with the final capabilities to be added over the coming months.
But Bain’s backing for ADMIRE is not a one-off, says Azoulay, but part of a concerted investment programme: since taking over in 2022, it has pumped €235 million into ITP’s global industrial footprint, updating facilities in Spain and Queretaro in Mexico. It has also sanctioned annual R&T spending of around €100 million.
Bain also signed off on last year’s acquisition of Dallas-based repair shop BP Aero, giving ITP its first toe-hold in the US MRO market. It remains keen on further “bolt-on acquisitions”, says Azoulay, although any target has “to be a good fit and increase [our] capability”.
While she cannot comment on its owner’s long-term intentions, “the general feedback is that they are very pleased with ITP as a company”.
“They have a lot of trust in the company and are willing to support the investment levels that we have.”
She says Bain is has a “longer-term view” and is “not in a hurry” to cash out: “They see value and growth potential and see we are executing on that growth.”
Execution is a key message for Azoulay: she repeats the word, or variations of it, several times over the course of our conversation, even referencing it as one of ITP’s biggest challenges.
“It’s all about the execution,” she says, in this instance referring to an ambitious five-year plan that targets a doubling of profits by 2030 – a figure that has already almost tripled since the Bain acquisition.
Last year, EBITDA stood at €295 million on revenues of €1.61 billion, substantially above 2022’s figures of €104 million in EBIT and €1.04 billion in revenues.
Much of the growth has been driven by commercial aviation’s post-Covid rebound and soaring airframer production levels, but Azoulay sees it as sustainable, noting that much of the future increase comes from “secured work, committed work, under-contract work”.
But to maintain that trajectory beyond 2030 is where the research taking place at the ADMIRE centre will prove critical.
“We are where we are today because of the decisions [taken] and the programmes we got on board 10 years ago,” says Azoulay. To ensure a repeat, it is “about making sure that we are well-positioned for that next cycle as it happens”.
Consolidating much of ITP’s R&T activity, ADMIRE brings together cross-disciplinary teams – engineers, software developers, manufacturing staff, data analysts – to develop the advanced manufacturing technologies and supporting digital infrastructure needed for the next generation of gas turbine engines or other propulsion systems.
Capabilities embodied in ADMIRE include forging and additive layer manufacturing – the latter has been used to ‘grow’ heat-exchangers with internal structures designed to maximise the heat transfer between two substances. Advanced repair processes and AI-driven component inspections are also being researched.
Investment in this “proprietary world-class technology” is vital, says chief technology officer Erlantz Cristobal, “so that by the time a new programme is launched we have a valuable position on those models”.
OEMs cannot do everything themselves, he notes, and rely on RRSPs like ITP to carry some of the load.
ITP is in “constant conversation” with its OEM customers, adds Mikel Lantero, executive vice-president civil business, to understand future product roadmaps. “What are their needs? Where can we bring value to those engines?” he says.
Those discussions help determine “what technology we should be investing in”, Lantero adds.
But while industry needs dictate that research into future gas turbine technology is ITP’s main focus, alternative propulsion systems are not being neglected.
Tests of an auxiliary propulsion unit burning gaseous hydrogen were recently conducted at ITP’s site near Madrid and as a next step, this will move to tests using liquid hydrogen, with all the thermal management challenges that presents.
Development of the wider ecoysystem notwithstanding, Cristobal says hydrogen combustion “could be a solution” for a future single-aisle aircraft, where the combustor technologies pioneered at its Hucknall site in the UK will come into their own.
But that is not all, he says, noting that thermal-management know-how will also be key. “That is one of the reasons that we have been spending effort in developing next-generation heat-exchangers, because in those new-generation platforms heat management is going to more relevant that today.”
ITP also sees thermal-management as being a “transversal” technology, one applicable to future gas turbines, military applications and alternative propulsion systems, including hydrogen – both fuel cells and direct combustion – and electricity.
Speaking of which, ITP will shortly commission new test benches for electrical powertrains – one at 70kW for urban air mobility applications and the other at 700kW aimed at regional use cases – as part of a project it is leading.
Cristobal says it is too early to say if ITP would offer an electric powertrain as a stand-alone product as it needs to see “how the market evolves”.
But it would also seem to require an evolution on ITP’s part, moving, in the commercial space at least, from a tier one supplier capable of designing and manufacturing engine modules, to one performing whole engine or system integration.
“I think we continue to evolve,” says Azoulay. “What we do on the defence side is that we play that role. So it’s not like we don’t play integrator where it’s been an opportunity for us.
“I do think commercial is much broader, and I think it’s going to take us, the OEMs and all the major tier one players participating.”
Funding for research into all these areas has come a variety of sources: at transnational level, ITP is in involved in Clean Aviation and European Defence Fund projects, while it has also received R&T money from the Basque, Spanish, and UK governments.
Despite its start as a defence-focussed company, ITP’s development over the last 36 years has seen commercial aerospace come to dominate, with around 85% of its revenues generated by this segment.
Azoulay sees the 15% share from defence remaining steady in the coming years, representing Spain’s interest on the engines for platforms including the Eurofighter and Airbus Defence & Space A400M.
Additionally, it is working alongside MTU Aero Engines and Safran Aircraft Engines – albeit outside the pair’s EUMET joint venture - on the propulsion system that will power the Future Combat Air System being developed for France, Germany and Spain.
“We are a solid player, we are well reputed and a preferred provider of the engine,” adds Azoulay.
