A resurgent Lockheed Martin Aircraft Argentina is looking towards its neighbours for expansion as economic growth builds across Latin America

Alberto Buthet has the relieved look of a man who has pulled off what amounts to a minor miracle. Against the odds and amid the economic turmoil that gripped Argentina for several years, Buthet has helped steer Lockheed Martin Aircraft Argentina (LMAA) through a storm of uncertainty to calmer and potentially prosperous waters.

In Cordoba, central Argentina, the hangars and workshops of the former Argentinian government's Fabrica Militar de Aviones site host a growing staff of around 1,000 people. They are working on upgrades to turboprop attack and transport aircraft, manufacturing jet trainers, performing airframe overhaul and maintenance work and repairing and overhauling turbo­fan, turbojet and turboprop engines.

Privatised in 1995 and sold to Lockheed Martin, the rebranded organisation forms one of the international operations of the US-based company's Aircraft & Logistics Centers group, which itself comes under the company's Technology Services division. Embracing extensive capabilities in aircraft maintenance, modification and upgrades, as well as manufacturing, and engine repair, overhaul and testing, it provides one of the few "one-stop shopping" centres of its kind in South America.

"Our intention is to be a company with certain capabilities for large-scale integration," says LMAA president Buthet. "It's not smart for us to compete against the first-level players." Now, armed with Argentinian defence contracts, plus additional work from its parent company, the mood at LMAA is buoyant as employment grows and the search begins for export work.

This all looked unlikely when the country teetered on the brink of economic meltdown in late 2001, just as LMAA had secured what appeared to be prime contracts to modernise Argentinian air force IA-63 Pampas and manufacture a new batch.

In December that year the country was torn by food riots and demonstrations after the government's attempts to put the economy back on track were derailed. Argentina had slipped into recession in late 1999, and had been forced to seek up to $40 billion in aid from the International Monetary Fund (IMF). In 2001, the value of the peso for imports and exports was pegged to the US dollar and euro combined, but problems mounted as debt rose and the IMF imposed tough restrictions.

Confidence rocked

Events came to a head in November 2001 when the government attempted to restructure the debt, putting it in default. Investor confidence was rocked, and depositors began a run on the banks, which immediately clamped down on monetary withdrawals. The IMF added to the confusion by insisting on a 10% cut in the national budget before making any further aid payments.

The country's president Fernando de la Rua Bruno was forced to resign. His successor was the former Peronist 1999 presidential candidate Eduardo Alberto Duhalde, who moved quickly to devalue the peso. Within hours, the Argentinian currency lost over two-thirds of its value, and the economy staggered along in disarray. "As a company we had been working as normal, signing contracts with all our suppliers and so on. After the problems, and the appointment of Duhalde in January 2002, we spent a year in negotiations trying to get it all going again," says Buthet, who also assumed his role as president that month.

The persistence of the LMAA team seemed to have paid off when, in January 2003, the government signed two deals. One covered a broad-based maintenance contract for air force aircraft, and the other the long-awaited revival of 12 Pampa trainer upgrades. It also covered manufacture of 12 new aircraft, although, unlike the original deal, this included just six for the air force, while the additional six were for international sale. This revised deal brought with it more input from LMAA, but "we had to do it, and make the investment to make it viable", says Buthet.

However, less than three months later, the political situation again interfered. Nestor Carlos Kirchner won the 2003 presidential election and his government insisted on reviewing all contracts issued by the former administration. "The package was renegotiated and signed by decree in February 2004," says Buthet.

"In the meantime we had adapted all the supplier contracts to the ‘devaluation' scenario, and after the contract was signed, we had to renegotiate with the suppliers. The main focus became the completion of the demonstrator, which was rolled out in December 2004."

The upgraded aircraft, renamed AT-63, builds on the foundations of the original IA-63 Pampa, 19 of which were built in the 1980s. The revised aircraft includes an Elbit-supplied weapon system, mission computers, an Elop head-up display, colour multifunction display, Honeywell embedded global positioning system/inertial navigation system and radar altimeter, and a mission planning system with digital map capability.

"The target is to start flying in June, and then we will have around six months for avionics certification and weapons delivery tests. In December, we aim to start deliveries of the first modernised aircraft, with the remaining 11 being handed over through the rest of the year," says Buthet. "In the meantime, we will be producing new aircraft, and we have to have a very low production rate because this is the way the government is working," he says. This means that tooling capable of producing up to two aircraft a month is scheduled to deliver only one aircraft every three months. This cloud has a potential silver lining, however. Buthet says: "This rate at least gives us a window of opportunity for third-party business."

Pampa potential

The first of the new airframes is to be handed over in 2007, says Buthet, who adds that talks are continuing with the government, which has a "nearly flat budget". The Pampa is ripe for the currently funded upgrade as well as potential new ventures, says Pampa project engineer Nicolas Topa. "It was originally developed with technical assistance from Dornier, and became a low-cost Alpha Jet. But there is lots of potential remaining, and the engine has continued to improve during the life of the programme," he adds.

The upgraded AT-63 will be delivered with the 3,500lb-thrust (15.5kN) Honeywell TFE731-2C in place of the original -2N, but could be offered in the future with 4,200lb-thrust TFE731-40.

Buthet believes the higher thrust will increase sales potential as well as decrease operating costs. He also believes it could improve the competitiveness of the Pampa against increasingly capable turbo­props such as Embraer's Super Tucano, the Pilatus PC-21 and Raytheon T-6 Texan II.

The re-engining effort, which is supported by Honeywell, would involve conversion of the initial AT-63 Pampa upgrade demonstrator and will improve top speed from around 340kt (630km/h) to 390kt. Buthet believes the increase, combined with the AT-63's low-altitude capabilities, will dramatically increase its effectiveness as a light attack/fast trainer without significantly increasing cost.

Other possible elements of the next step could include a structurally strengthened wing to take loads up to +7g, a modified nose having a laser rangefinder, a stronger landing gear for increased take-off weight, a missile and radar warning receiver, conformal chaff/flare dispenser system and two more air-to-air missile hardpoints.

Multifunction displays

The current upgraded version, or the more powerful follow-on derivative, will be offered with dual multifunction displays in the front and rear cockpits, says Topa. If the company gets the go-ahead to develop the TFE731-40-powered upgrade, "then we will go back to the first demonstrator and use that", he adds.

The Pampa upgrade, and the development of a future path beyond the current configuration, stressed the commitment to build at least six additional airframes. They also indicate a growing confidence in the emergence of long-hoped-for foreign sales. Bolivia, Ecuador, Uruguay and even the Argentinian navy represent potential opportunities, says Buthet. Presidential talks between Kirchner and his Bolivian counterpart Carlos Mesa were held in 2004 with a possible view to selling up to 12 AT-63s to replace Lockheed T-33s.

LMAA already has close relationships with many of its South American neighbours through its maintenance, repair, overhaul and upgrade arm. The company undertook a life-extension modernisation of two Bolivian Beech T-34 Mentor trainers, having developed a US Federal Aviation Administration-approved inspection and repair programme for the aircraft's well-publicised main-spar problem. The upgrade is being offered to Colombia, and continues to be provided on a rotational basis to the Argentinian air force, which has taken 30 overhauled Mentors.

LMAA is also working on a mid-life update for the IA-58 Pucara ground-attack aircraft for the Argentinian air force, which operates 24 Pucaras, with 16 in storage. "As well as this very light modernisation programme, we are also conducting a structural inspection," says Topa. The mid-life update involves communication and navigation system improvements, and could eventually be extended to cover as many as 30 aircraft. "We are still not sure we will do it by 2007 because of the budget, but it will happen one way or another," says Buthet, who says the original work statement covers 18 options and 12 follow-ons. "The issue is how we will do it," he adds. The first upgraded Pucara was delivered in December 2004. "A decision on the upgrade schedule for the balance will be taken by the end of the year," he says.

Another mainstay of the maintenance business is the Lockheed Martin C-130, several of which are included in the air force transport fleet-modification programme initiated in 2004. The overall programme includes 17 aircraft of eight types, ranging from a Boeing 707 to a de Havilland Twin Otter. The upgrade will enable the fleet to meet civil airspace standards and includes the addition of cockpit voice recorders, emergency locator transmitters, enhanced ground proximity warning systems and traffic alert and collision avoidance systems.


 "We had a competition for the upgrade and Honeywell was selected," says Buthet, who says the contract is divided into large and small aircraft packages. "We are also working with Kelowna [of Canada] and negotiating with Honeywell to start the purchasing orders." The first aircraft to be upgraded will be a Fokker F27, and "we will be do four more aircraft this year", says Buthet. Work begins on four types in 2005 and three other models are set for 2006.

The company's 2004 delivery roster provides a snapshot of its broad-based maintenance capabilities for the air force. It included two Fokker F28s, three F27s, six IA-63 Pampas, three IA-58 Pucaras, one C-130 and three T-34 Mentors. In addition to the two T-34s for the Bolivian air force, it also turned around a C-130H for the Colombian air force. Two ColombianC-130s are in work, a C-130B for delivery in June and an H model for September.

Another vital plank is engine repair and overhaul for civil and military customers. The business has been running at a relatively low ebb through recent years, but "now we are going up again", says military engines manager Miguel Altarmirano. Last year the site delivered four overhauled Rolls-Royce T56s, 14 Turbomeca Astazou turbo­props, as well as five Honeywell TFE731 turbofans and three Pratt & Whitney J52 turbojets.

LMAA is keen to exploit its C-130-related engine work and perform more T56 refurbishments. "We will need to start negotiations with Rolls-Royce because the market for these engines is important both here in Latin America and around the world. We think Colombia will need more refurbished engines," says Altarmirano.

Much of LMAA's bread and butter income has been tied to the P&W J52 overhaul work for air force McDonnell Douglas A-4 Skyhawks, and more recently the upgraded -408A variants in the modified A-4AR version. The business has been augmented by recent Brazilian navy A-4 engine repair work, but LMAA hopes that this could expand to include major overhaul work.

The site is also focusing on expanding its P&W JT8D-9A/15 business, having just obtained its FAA certification for full overhaul, and LMAA is eager to add maintenance of the CFM International CFM56. "We are resurrecting our plan to offer the CFM56, after a two-year delay, but it will take another three or four years to get in place," says Altarmirano.

This work will require modification to the largest test cell, which is already built to take 50,000lb-thrust engines. The work could go alongside the expansion of the adjacent 5,000shp (3,725kW)-rated turboprop test cell, which will soon take Pratt & Whitney Canada PT6s. "We are working with P&WC to get authorisation to begin the process of overhauling these engines," says Altarmarino. "If everything comes together, we could be looking at a big expansion over the next two to three years."


Source: Flight International