It may still be Switzerland's state-owned aerospace and defence champion, but today's Ruag is a much more internationally focused and diversified business than the grouping of suppliers to the country's military that consolidated under a single banner a decade ago.

The Swiss armed forces remain an important customer for a range of land-and air-based products and services, but it is areas such as third-party maintenance, repair and overhaul, special mission aircraft and particularly spaceflight that are the real growth drivers for the next five years, says Peter Guggenbach, chief executive of Ruag Aviation & Space.

Ruag MRO, ©Ruag 
Ageing aircraft - such as the F-5 - fit very well into Ruag's strategy in military MRO. Picture: Ruag

Guggenbach, a former Mitsubishi executive in Japan and Swiss air force pilot, joined Ruag a year and a half ago with a mission to turn the company into Europe's leading tier one supplier of spaceflight equipment and technology - acquisitions in Austria, Sweden and Switzerland in 2008 and 2009 increased tenfold the size of Ruag's spaceflight business. He also "sharpened the strategy" of its aviation division by focusing on higher-value niche MRO segments such as corporate aviation, partnering with a number of manufacturers and service providers such as Rockwell Collins and ExecuJet.

The aviation and space businesses contributed SFr487 million ($487 million) and SFr228 million respectively to Ruag's 2009 revenues of SFr1.72 billion. Three other divisions service the Swiss armed forces' defence needs, from ammunition to weapon systems and command and control infrastructure. A fourth division, in the aerospace segment, is involved in aerostructures. Guggenbach's target is to increase the size of the two divisions he is responsible for to SFr700 million in the case of aviation and SFr400 million for space by 2015, even though last year's sharp downturn in business aviation has dealt his ambitions for that segment a short-term blow at least.

The aviation division covers three main areas: military MRO, business aviation, and special mission aircraft. Based at Emmen, south of Zurich, it operates from 12 sites including the former Dornier facility at Oberpfaffenhofen near Munich, and has 2,300 employees. In business aviation its portfolio ranges from avionics overhaul on Rockwell Collins kit, through providing authorised service for owners of Cessna Citation, Dassault Falcon, Hawker Beechcraft, Pilatus, Bombardier and Embraer Legacy aircraft. It is also extensively refurbishing a fixed-base operation in Geneva that it will run with fellow Swiss company ExecuJet.

Directing the strategy: Guggenbach sees business aviation as a future growth market. Picture: Ruag

While business aviation may be in the doldrums for the time being, military MRO is very much a dynamic sector thanks to the ongoing trends for armed forces to outsource complex refits and for original equipment manufacturers to back away from supporting veteran types such as the Northrop F-5 Tiger, around 600 of which are still in service with Switzerland and air forces around the world.

"Ageing aircraft fit very well into our strategy," says Guggenbach. "The OEM is not interested and we can offer our expertise here in Switzerland." Another service the business offers is a flare-based countermeasures retrofit for helicopters and transport aircraft. Although 70% of its military aviation MRO revenues currently come from the Swiss military, the aim is to pull in more work from abroad, giving that business an equal split between the domestic and overseas customers by 2015.

The third strand of the aviation business is special mission and commuter aircraft, centred on the relaunch of the Dornier 228 as the NG (or "new generation") variant. The original 228 was built in Oberpfaffenhofen between 1982 and 2002, when successor company Fairchild Dornier collapsed. Around 250 were delivered, mostly as commuter aircraft, and 150 are still in service.

The NG, which has a new glass cockpit and five-blade composite propeller, first flew last November and was certificated last month. The first was due to be handed over to its Japanese customer in the last week of September and deliveries of a further two will follow shortly. Ruag will build at least eight of the twinprop aircraft, says Guggenbach, a healthy niche addition to its business given that Ruag did not incur the development costs of the original aircraft.

While Ruag's aviation business has undergone a steady transition over the past two years, its space activities have been transformed. Acquisitions of Saab Space and Austrian Aerospace in 2008, followed by Oerlikon Space in Zurich last year have taken the division from around 100 to 1,100 employees and given it supplier positions on programmes from the Ariane 5 launcher to scientific and commercial satellites.

Its products range from payload fairings and separation systems for the likes of the Vega and Atlas V launchers - built in large hangars in Emmen - to digital electronics for on-board guidance and control computers and scientific instruments.

"We work with all the primes and are the number one independent supplier in Europe," says Guggenbach.

Now Ruag plans to develop its leading space position in Switzerland, Austria and Sweden further into other European institutional programmes and deeper into the US and Asia markets, where it has a niche presence. "A few weeks ago, we won our first contract in Japan. We have won others in India and Russia and we see opportunities in the USA," says Guggenbach. "We want to be a truly international business."

Source: Flight International