23 June 2006

New Zealand has a future in the aviation industry as a “boutique service provider” – from testing, to modification design, to specialised maintenance, repair and overhaul operations. Dr Stephan Hollman, product support chairman of the American Institute of Aeronautics and Astronautics (AIAA), said a joint venture announced in April this year, which he helped to broker as a consultant for Investment New Zealand, was an example of New Zealand moving successfully into this area.

The venture sees German-based company FTI Engineering GmbH collaborating with Auckland-based Airwork NZ Ltd to create a new independent Christchurch-based company FTIQ. This company offers a flight test, integration and qualification service for international aviation customers. The deal has the potential to earn up to NZ$200 million a year for the New Zealand economy.

Stephan Hollman said the northern hemisphere is moving towards customisation in aviation supply chains and greater sophistication is required to complete each assignment to specification. He believes more aviation entrepreneurship is needed in New Zealand , with a preparedness to take risks to attract big returns.

Stephan Hollman was a speaker at the IMAPP Aerospace Symposium held in Christchurch from April 5 – 8. It attracted representatives from some of the largest international companies such as Lockheed Martin, Airbus, Boeing, and Pratt and Whitney, and gave New Zealand aviation companies an opportunity to network, showcase their abilities and tap into global developments. The symposium was organised by the AIAA and the New Zealand division of the Royal Aeronautical Society.

The symposium and FTIQ are both outcomes of the South Pacific Aviation Centre of Excellence Initiative (SPACE). The initiative is supported by Investment New Zealand and the Canterbury Development Corporation, and is the umbrella under which a number of international market-driven business growth and investment propositions are being developed. These propositions feature strong aviation industry technology, engineering, design, and development qualities.

Investment New Zealand aerospace manager, Guy Tapley, says the aviation industry, more than most industries, is built on trust. This is because safety and reliability are paramount requirements.

“In this environment New Zealand ’s reputation as being responsive, efficient, trustworthy and innovative in business counts for a lot.

Demand is growing. Airbus forecasts that over 20,000 new commercial aircraft will be needed worldwide over the next 20 years. These and older aircraft will drive maintenance, repair and overhaul business, as well as cabin refurbishment, upgrading and modifications.”

More manufacturers are modifying aircraft, such as converting long-haul passenger aircraft into freighters and tankers. Technology is making it possible to extend the life of an aircraft further than before.

Giant manufacturers such as Airbus and Boeing are exploring new supply chain structures, risk-sharing models and business cases. For instance, manufacturers are transforming into integrators that outsource much development and manufacture. Airbus alone works with more than 20,000 suppliers around the world.

“These factors provide opportunities for the local industry,” says Guy Tapley. Investment New Zealand is actively leading an industry engagement with Airbus to identify and exploit opportunities for New Zealand participation. “This strategic engagement is targeting a limited number of specific niches, where New Zealand and market-partner needs and capabilities are complementary.

For a start, New Zealand is well networked, geopolitically neutral, and an internationally respected jurisdiction. We have relatively low OECD knowledge-based labour costs in this country, acknowledged engineering expertise, a proactive Civil Aviation Authority regulator, and the support of well integrated university and innovative research industry.”

“We also have uncluttered airspace stretching from South East Asia to the Antarctic and a lightly-subscribed wireless spectrum for the operation of telemetry and other communication all of which is highly desirable for aviation testing,” he says.

The month of April also marked another event in New Zealand ’s aviation history - th e inaugural flight on April 12 of the first New Zealand-manufactured Alpha 160A two-seat aerobatic training aircraft. Hamilton-based Alpha Aviation has purchased the sole worldwide rights to manufacture the Alpha 2000 series aircraft, of which the 160A is an example, from the French company Apex Industries. Before purchasing the rights, Alpha identified a worldwide market opportunity for two-seat training aircraft. The company has made a substantial investment and expects to build at least 50 aircraft over the next year.