Alain Carcasses, Aeroconseil Groupe
Release Date: 2009-02-04
You joined Aeroconseil in May 2008 from Airbus and EADS, where as an aeronautical engineer you were in charge of suppliers and contractors, but also the international integration of the entities now comprising EADS. Given Aeroconseil’s recent foray into the international, did putting you at the helm represent a need from their end for someone who could understand and appreciate this international aspect?Aeroconseil is of course one of the suppliers which needs to be able to follow the Airbus trend. During the last years, Airbus has, starting with the merger of the former partners in 2001, integrated all the design offices which were located in Germany, the UK, Spain, and France, and even overseas activities in the US or Russia for instance. What had to follow at that time, and is still going on, is movement on the part of SMEs, in helping Airbus to deliver services. As a pure French player, as was the case with Aeroconseil in 1984, the company had followed the trend along with other service companies. For example, in 2008 Aeroconseil found a partner in Germany and created a joint venture with them, developing the business together to support Airbus and EADS as well as other opportunities in Germany. In a nutshell, the trend pattern Airbus has shown to the aerospace community needs to be followed by SMEs. Of course, Aeroconseil has been helping Airbus in this regard for years, in developing this network and partnership of SMEs around Europe to follow the needs of Airbus and achieve better integration between different functionalities.
Although certainly following trends at Airbus, Aeroconseil has experienced its own trends, changing over the last decade in particular its corporate structure and target markets. Although you’ve only been here since May 2008, what are some of the main milestones and achievements of recent years?
Regarding Airbus and EADS, the major milestones achieved in securing the Airbus Engineering label called E2S, which qualifies Aeroconseil as a preferred supplier for EADS and Airbus for engineering services. At the same time, Aeroconseil is developing a world approach to engineering services as well as services to the air transport division. This started with a new set of bundled offers, for instance, we have released a prototype fuel service offer, where Aeroconseil implements a fuel reduction package for airlines, yet another way to tackle what the aeronautical community expects from a company like Aeroconseil, which cannot rely only on pure technical assistance or engineering, but instead provide innovative services and deliver value to the aeronautical community.
Speaking to this diversification, air transport has increased from zero to now around 40% of turnover compared to 60% in engineering. Is this a trend you expect to continue, or has Aeroconseil sufficiently diversified?
The trend is to fully balance what Aeroconseil does for OEMs like Airbus, SAFRAN, Thales, Liebherr, and Honeywell, with services for airlines, MROs, and lessors. Even in the context of a crisis we know will impact all business activities, from automotive down to aeronautical and air traffic growth, there are still opportunities for airlines. Fuel represents 25-30% of an airline’s cost. Even if traffic is not growing as fast, in areas like China and the Middle East there is still growth even if not as high as previously. There is still a huge traffic, and Aeroconseil can help it be more efficient and therefore move more quickly through the crisis. It’s a win-win situation, and even a crisis can be an opportunity to lean on the structure and operations of the airlines, and support the winning airlines. Another example is asset management, another area where Aeroconseil has developed a niche expertise, especially with airlines in the Shanghai area. Asset management is a way for Aeroconseil to better introduce a new aircraft in operations for an airline, and optimize maintenance activity to reduce operational costs.
After years of creating subsidiaries abroad, Aeroconseil created a joint venture, most recently in Germany in 2008. Is this trend toward joint ventures circumstantial, or is it indicative of how the company will grow internationally in the future?
Growth is a target; Aeroconseil wants to double turnover by 2011, even taking the current economic crisis into account, not only on a European level, but worldwide. To achieve this, Aeroconseil has several ways, and to partner via joint venture such as in Germany is just one example in the portfolio, alongside intended development by external growth. There is a target in North America to increase turnover via acquisition by the end of 2009 or beginning of 2010, so this is another mechanism. Growth is a way to increase visibility, although obviously Aeroconseil wants to grow profitably; it’s not only about volume. The goal is for growth, perhaps not in the triple digits, but in a profitable way with innovative services.
Initial corporate goals called for the 2007 to 2010 period to grow from €95-200m, which is quite ambitious. You mention by 2011 there are still plans to double turnover; is this still feasible given the current economic situation?
In these plans, contribution from external growth would be around €40m, which means a need for still €60m taking into account the gap from now until the end of 2011, which is still ambitious, yet feasible with the number of opportunities I mentioned such as fuel and asset management. Cabins are another topic Aeroconseil shares with its Chinese partners. Airlines need to change their cabins every five years on average. For airlines to be up to date and offer premium services to their passengers requires this change. Of course, it’s more the case of the three, four, and five star airlines, but there is a good deal of them, and this is an opportunity to offer a new cabin concept, which can be several fold. First, if you can offer more pax to carry with less weight, that’s of course more benefit for the airline. There are concepts under work which give more capacity in the same aircraft, by optimizing seat arrangement and VIP zones, using new materials, and optimizing the concept of the cabin in the area. Another aspect is that the passenger nowadays is finding it harder to board an aircraft without the same comforts found at home – they want internet, mobile phone use, electrical plugs, etc., which represents a new service frontier. Aeroconseil is already delivering an STC (supplementary type certification) which allows GSM mobile use, but as every device has potential to interfere with the aircraft, it’s very important to do this as safely as possible, and it’s now possible to modify the aircraft to allow passengers to use their mobiles without endangering their safety. New concepts in layout, galleys, and toilets, combined with very good service makes them feel at home, and makes the difference for the airline as well, because they are able to attract more passengers. These are the two areas where Aeroconseil is developing, and is part of the strategy for the growth.
It's impossible to talk about Aeroconseil's boom of these last years without referring to the parallel "golden years" of the aeronautical industry - especially European industry, with record orders and market share figures from Airbus, for instance. Of the boom and internationalization seen at Aeroconseil, which parts have been driven by growth of the aeronautical industry as a whole, and which by the initiative, aggressiveness and risktaking of Aeroconseil itself?
Part of Aeroconseil’s success is no doubt linked to the Airbus program; we are really integrated into this program in addition to all programs launched by the company. This is the company’s historic background, and Airbus’ success has created the success of Aeroconseil. At the same time, this has created other opportunities to go to other OEMs, propose services, and consequently realize a major change in the way Aeroconseil will develop in the next years. Of course, as a major supplier of Airbus, Aeroconseil wants to continue to have them as a reference in our customer portfolio. Nevertheless, Aeroconseil needs to reach out to other OEMs and continue transformation and diversification, including into aircraft transport.
So far, the first phase of Aeroconseil’s growth was linked to Airbus’ expansion, but now, since a couple of years and especially in 2008, accelerations in growth and diversification, even with the crisis, have been necessary when looking at the number of programs being or to be launched, whether with Chinese aircraft, Russian aircraft, Bombardier’s C-series, the 787, A350 or NSR (New Short Range); there are a number of programs, not to mention India which may well emerge as another challenger in the next years. I believe the aeronautical industry is facing a similar move to automotive, at least in the sense that there are far more players than has historically been the case. Looking at the competitive landscape after Boeing acquired McDonnell Douglas, there was a duopoly situation for years, and now the world is changing with the creation of new challengers in the aeronautical world. At the same time I believe there is a change in balance between the aircraft manufacturers and major OEM systems suppliers like Thales, SAFRAN, Honeywell, and Liebherr, in a similar way to the automotive industry, where equipment suppliers are playing a much bigger role fo the OEMs.
Aeroconseil has been in China since 2001, although the company has certainly put a bigger focus on the region in the past year or so. What does China represent for Aeroconseil?
On a personal level, China is a wonderful country full of history and opportunity that is changing so quickly, with many different facets that you can’t help but find fascinating. But fascination is not business, so to transform this into business opportunities, Aeroconseil will be targeting this area, one of the few regions where traffic will continue to grow even through 2009. There is a need for traffic, driven by regional needs between China and nearby countries or more remote countries, for supplied goods for machine tools.
China is still exporting, even in the context of a crisis, and this region expects a 4-5% traffic growth in 2009. Looking at the size of the country, this simply means there’s a major market opportunity for Aeroconseil in air traffic, and when I say traffic this covers support to the airlines – Aeroconseil is part of the Marco Polo project, an Airbus initiative set up to support the Chinese airlines and their industries to be best in class for airline operations, safety, fuel, and other operations. Aeroconseil’s support in this respect includes training, safety, and the fuel offer to interested parties. Secondly, Aeroconseil will develop – although it is still early days – various schemes to support aircraft engineering development in China. The first proposals would be around aircraft modification, as Aeroconseil can support the Chinese fleet for upgrades or any other modifications, working with a Chinese partner to develop this side of the business in addition to transport.
Working with Aeroconseil in China is a clear choice from Airbus’ point of view, with a 25-year history between the companies, but for those airlines many of whom may just be establishing partnerships and contacts with European companies for the first time, what makes Aeroconseil the partner of choice?
Aeroconseil’s long-term relationship with Airbus is considered as a plus and makes the offer credible, compared to an offer made from scratch, which is impossible in a field like aircraft engineering. Aeroconseil’s credibility is also materialized by what we call design organization approval qualification. Aeroconseil holds a so-called document DOA part 21, which permits the company to modify aircraft by itself. This qualification takes years to obtain, but Aeroconseil has it, so when we go to a Chinese partner and are able to modify their aircraft, work on an Airbus or a Boeing, and it’s recognized by the FAA and EASA, that makes a difference. Also, Aeroconseil is the first independent French organization CAMO (Continuing Airworthiness Management Organisation) certified, so we can monitor an aircraft fleet and say, “yes, these aircraft are safe, they can fly”, or that there may be an issue and ground an aircraft or take the appropriate action. All these elements contribute to credibility. To materialize this qualification, there is a unique job pattern in Aeroconseil which is interesting to our Chinese colleagues and potential customers. We use what are called “conseillers”, former and retired Airbus or Systems / Equipement companies personnel who used to occupy senior positions in the engineering office of these companies. These individuals have extensive experience on Airbus and other aeronautical products, and when advice is required on a special topic, we call on them to provide a very interesting service for our customers. Aircraft expertise is by nature a matter of duration – you can’t gain this knowledge after a couple of years, it requires a lot of time, because aircraft are very complicated and integrated, and it takes time to understand the ins and outs of the product.
As an aeronautical engineer, you have obviously notice the technical changes in airplanes over time. Broadly conceptualizing the future of aircraft, what are the most significant impacts we can expect to see in terms of design in the next 10 to 20 years?
I think there are three trends shaping the future of aircraft. A very big one is environmental and energy concerns, which impact aircraft design, starting with fuel . We can envision fuel cells aboard the aircraft to replace energy supplies which call upon engines for power, which results in higher fuel consumption. However, environment also means noise. Comparing the noise produced by the 707 taking off in the early 1960s to the A380 today, there’s a huge improvement, driven by the desires of the general public to have an acceptable living environment near airports.
The second one is to better integrate the aircraft in its systems environment, e.g. airport, air traffic control. We want to have aircraft fly in the most efficient way possible from one point to another. Just thinking about time spent at the airport, not only at the checkpoints, there are other opportunities to block time with better planning of engine starting, waiting time, queueing in waiting for clearance, etc. Having a holistic view of the system in which aircraft operates is crucial, and the aircraft has to talk more, to exchange more information with its environment to optimize its flight. In order for this to happen, the aircraft needs to be properly programmed to be able to interact with its environment.
Aeroconseil is already working with EUROCONTROL on Data Link. Thinking about what an aircraft is doing between London, Toulouse, and Paris, in terms of taking off, circling around the airport, taking into account different winds to optimize flight costs, and waiting on the taxiway for the go-ahead, there is a tremendous loss of time, fuel, and efficiency. There are many things to be done to better integrate the aircraft into its overall environment, such as the EUROCONTROL project SESAR, and Aeroconseil is part of this initiative working with Thales, EUROCONTROL, and Airbus, providing some expertise in aircraft performance and flight management.
The last change I would call the digital aircraft, taking advantage of all digital technologies to better exchange information, and offer more entertainment and connectivity to passengers wherever in the world, and understand better how aircraft structures behave, to better monitor the aircraft’s health. This implies treating the aircraft almost as a human body.
Where do you want to bring Aeroconseil in the next five to 10 years?
Growth will obviously involve materializing this vision in facts and figures. Aeroconseil wants to move the company progressively from pure technical assistance or classical engineering services towards more innovation in products and services to our customers, OEMs, and airlines. This innovation will happen in the three areas I just mentioned: energy, aircraft transport and traffic control, and the digital aircraft connectivity. Overall, this means more innovation while of course maintaining the classical offers of engineering services.
What is your final message to IBD readers and current and potential customers in China?
Ni hao! I would like to tell them that we can together develop a very competitive aeronautical industry in China for internal and domestic purposes, but also to enable China to play a strong international role in the same way it is playing in many other areas in the industry. Aeroconseil can help in this regard and be the partner in this vision China wants to implement; there is indeed room for a third global player.
| Company: | Aeroconseil Groupe |
| Position: | CEO |
| Country: | France |