Aero restructures its business into three divisions

Published: 12/28/1999

Over the last few months Czech producer Aero has undergone extensive reorganisation of its business with particular emphasis on its marketing capability. Last month, three marketing units were created to sell the products of the company" three operating business units: Military Aircraft, Commercial Aircraft and Aerostructures. The first business unit Military Aircraft will be responsible for the company"s light attack aircraft and trainers including the ALCA programme. The restructuring of the military area has seen the production of the ALCA consolidated at the company"s plant at Odolena Voda, after the collapse of a number of suppliers including Letov requiring Aero to acquire and transfer their production. This has resulted in all five of Aero"s military aircraft being produced and overhauled on the same production line. The business has however, been confronted by ongoing problems with the ALCA L-159 light attack aircraft with delays in live firing and other tests. Due, according to sources, to an ongoing dispute with the Czech Ministry of Defence on the level of payments for Mi-24s spares and the shortage of spare parts for the Czech Air Force"s Su-22, that has effective grounded the Czech"s 19 Su-25 close support aircraft. There have also been additional delays in processing the authorisation involved in getting weapon systems delivered for fitting and testing. Interestingly sources close to the company, report that Boeing, the major shareholder, has offered little in the way of assistance in resolving these problems with the US, which are said to involve ‘smart" weapons. For the Czech Air Force, the delays in the delivery of the ALCA could cause serious problems as their MiG-21MFs lives end in 2003, with the ALCA the only replacement capable of making the timetable. There has however, been some controversy regarding the adoption of the ALCA by the air force, which was reported as regarding the ALCA as not being capable of fulfilling the MiG-21MF role and would have preferred upgrading the Su-22s in service for longer service. The contract however, between the Czech government and Boeing requires the air force to take delivery of 72 ALCA or pay a penalty of $600 million. The first batch of aircraft is due to be delivered in 2000, with five aircraft being delivered to the Czaslav Fighter Wing. Given the delays in the programme it seems likely that the second and third batches of 16 aircraft may also be delivered in 2000. Given the delay in the delivery of the first batch of aircraft, the Czech Government and Aero are reported to be negotiating to lease L-39ZA"s not released to Nigeria to fill the gap. The recent rollout of the Ae-270, which the company is producing jointly with AIDC of Taiwan in the joint venture Ibis Aerospace has however, shed a little more light on the Czech producer. The ten seat single turboprop to be assembled at Odolena Voda from subassemblies manufactured in the Czech Republic and Taiwan, which will produce the wings. The marketing of the aircraft will be undertaken by the newly formed Commercial Aircraft marketing unit, which will be headquartered in the US, reflecting the major importance of the US to the aircraft"s success. Marketing in Europe will be covered by local Aero offices and AIDC will cover Asia. The aircraft is expected to fly in February 2000 with Czech certification and FAR Pt 23 being gained early in the middle of 2001 with the first deliveries at the end of that year. The third division of Aero, Aerostructures constitutes about 10% of the turnover of the company"s sales. Is targeted to double its turnover through production of tail planes for the Bombardier de Havilland Dash 8Q series programmes and co-production with Boeing on military and civilian programmes including the 747 and 757. Other customers are said to be in negotiation with Aero, although only Sikorsky has been publicly mentioned to date.

Article ID: 1252