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FARNBOROUGH: Challenges remain for Canada's aerospace sector

Was Airbus taking majority ownership of the CSeries on 1 July good or bad for Canada’s aerospace sector? It depends if your pint glass is half full. The upbeat take on the deal is that the European manufacturer will secure the future of a clean-sheet programme that, while brimming with innovative technology, has struggled for orders in the 10 years since its launch – and safeguard tens of thousands of Canadian jobs.

Those of a half-empty persuasion will suggest Bombardier, and the Ottawa government, have been humiliatingly forced to sell the farm at a knockdown price after a failed attempt to break into the Airbus/Boeing duopoly.

There seems little doubt that the decision to set up the CSeries partnership – handing Airbus a free majority stake with no debt obligation – was the only way to save the Pratt & Whitney PW1500G-powered CS100 and CS300. The Quebec government had already bailed out the programme and deliveries this year had slowed to a trickle as Boeing lawyers challenged an order from Delta Air Lines in the US courts. Duopolies do not take kindly to interlopers and the chances of Bombardier struggling on alone were close to zero.

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So where does the Airbus deal leave the country’s aerospace industry? While the Beaudoin family and Bombardier's other shareholders have been left with a 31% stake in the CSeries, that is better than 100% of potentially nothing. They also still control the rest of a still very much alive and kicking Bombardier. Aside from the rail transportation business, it now comprises the rump of the commercial aircraft division – the CRJ regional jet family and Q400 turboprop – and a business aviation arm consisting of the Learjet, Challenger and Global brands. An aerostructures operation is based largely outside Canada.

BACK IN BUSINESS

The business aviation division appears to be thriving once again, thanks largely to the in-development Global 7500 ultra-long-range, large-cabin jet, a new version of the Global 7000 that was introduced at the EBACE event in Geneva in May. Bombardier, Gulfstream and Dassault are the only manufacturers competing at this end of the market. The Global 7500 features new Rolls-Royce Pearl engines and becomes the longest-range business jet in the world. It sits alongside two other Global variants and the smaller Challenger 650 and 350 family, as well as Wichita-based Learjet, a venerable brand in a struggling segment.

In a report published as the CSeries transaction was being finalised, the Aerospace Industries Association of Canada and Department of Innovation, Science and Economic Development estimated that aerospace was worth C$25 billion ($19.1 billion) to the economy in 2017 and contributed 190,000 jobs. As well as Bombardier, Montreal-based CAE is the world leader in flight simulation and training, while Pratt & Whitney Canada, a subsidiary of US group United Technologies, is a powerhouse in engines for regional, business, and general aviation aircraft.

While the aerospace sector ranks as the fifth-largest in the world in terms of turnover – after the USA, the UK, France, and Germany – the AIAC says the government cannot be complacent. "We are also seeing some decline in the industry," says AIAC president and chief executive Jim Quick. "More work needs to be done to ensure that Canada remains a place which attracts and retains investment in this sector, which is so essential to innovation and the future of our economy."

Pratt & Whitney Canada, based in Longueuil, near Montreal, secured its latest customer for its range of business jet engines earlier this year when Dassault announced that a version of its PW800 turbofan would power its latest Falcon 6X, after the French manufacturer abandoned plans for a similarly sized 5X with Safran Silvercrest engines. It was the second major deal for P&WC in the sector, after the PW800 – which shares technology with Pratt & Whitney's PW1000 geared turbofan – was chosen to provide the engines for Gulfstream's soon-to-enter-service G500 and G600 in 2014.

P&WC has been an autonomous unit of the Connecticut-based propulsion giant, and part of Canada's aerospace heritage since before the Second World War and has more than 13,000 customers and some 63,000 engines in service. Many of these are the ubiquitous PT6 turboprop family, introduced in 1963, although turbofans such as the PW300, PW500 and PW600 are still strong sellers. The company – which also offers a range of auxiliary power units – employs 9,400 staff, almost 6,000 of them in Canada, including at a technical centre in Mirabel, Quebec.

TRAINING CENTRE

The Montreal area is also home to CAE, the world's largest manufacturer of flight training simulators for the airline, military and business jet markets, and now also the largest independent training provider in the industry. CAE has been one of Canada's star aviation performers in recent years as it has transformed from a largely manufacturing-led business into one that makes the majority of its revenues from the services sector.

Another notable Quebec player is Héroux -Devtek, which has evolved over the past decade from a supplier of landing gear components and landing gear for regional airliners to a strong number three in the mainliner market, alongside United Technologies and Safran. Its breakthrough contract came in 2013 when it won the contract to design and manufacture the main and forward landing gear for Boeing’s new 777X, as well as current 777 models, from United Technologies. To support the assembly of the component, Héroux-Devtek opened a factory in Cambridge, Ontario in 2015.

The company this month expanded its US footprint with the acquisition of Beaver Aerospace & Defense, a Michigan-based manufacturer of ball screws and actuation systems, largely for defence customers. It followed its agreement late last year to buy CESA, a Spanish Airbus subsidiary specialising in landing gear, actuation and hydraulic systems. In its latest full-year results statement in May, chief executive Gilles Labbé said the company was "in a healthy financial position to pursue our next expansion phase", and "well positioned to obtain a number of contracts on several aircraft programmes".

The other major aerospace player in the Montreal area is Bell. The Textron subsidiary has assembled 4,900 commercial rotorcraft in the country since establishing its Mirabel facility in 1986 – it also has a site in Calgary – and claims to support 8,800 Canadian jobs through direct employment and the supply chain. In 2016, the Montreal aerospace industry got a significant boost when Bell announced that it was transferring production of its 505 Jet Ranger to Mirabel.

While Montreal is Canada's largest aerospace cluster, employing some 40,000 across more than 180 firms, Ontario, and particularly the area around Toronto, runs it a close second. Bombardier is a major employer in the city and other notable employers in the province include Diamond Aircraft in London, business aviation maintenance and completions house Flying Colours in Peterborough, and modifications specialist Field Aviation in Mississauga.

One of them, Magellan Aerospace is a major supplier of aerostructures to Airbus and Boeing. In April, the company, which is traded on the Toronto stock exchange and has manufacturing facilities in the UK and the USA as well as Canada, secured a suite of contracts with Boeing, including for the manufacture of titanium wing fittings for the 787, and winglet components for the 737 Max. In April, Airbus awarded Magellan a five-year contract to supply A330 wing ribs.

Another Ontario-based company, MDS Aero Support, is to build a new gas turbine engine test facility for Rolls-Royce in Derby, featuring, it says, the largest indoor testbed of its type in the world. MDS worked with the National Research Council of Canada on the aero-acoustic features of the centre, which will be operational by 2020. The company, which has been in the market for more than 30 years, has also worked with Pratt & Whitney, General Electric, Siemens and MTU.

While the industry around Toronto and Montreal are the main centres of Canadian aerospace, there are also industrial clusters in the maritime, central and Western provinces of the country, with Calgary in Alberta being a particular stronghold. The Alberta presence at Farnborough this year features 11 of the roughly 50 aerospace companies based in the province. These include Viking Air, the company that resurrected the de Havilland Canada Twin Otter utility turboprop as the Series 400 and which has manufacturing facilities in Calgary and Victoria, British Columbia.

Get all the coverage from the Farnborough air show on our dedicated event page

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