ECONOMY

EAB moves to spread its

State-run Hellenic Aerospace (EAB) is currently mapping out a dynamic investment strategy aimed at enhancing the firm’s competitiveness and sales, with an emphasis on exports, as CEO Tasos Filippakos told Kathimerini in a recent interview. A characteristic example of the strategy will be the Greek company’s active involvement in the design and construction of a part of Boeing’s Dreamliner 787’s fuselage, a new, technologically advanced and more environmentally friendly plane which was recently presented in Seattle. In addition, EAB is planning to build a Composite Components Plant, which has already been inaugurated, on July 24, as well as a partnership with the US Air Force (USAF) relating to the upgrade of 100 F-16 fighter planes. EAB plans to invest -100 million over a five-year period in a number of activities, which according to Filippakos will also include the establishment of an Aviation Structures Design Center, at a cost of -16 million, a large part of which has already been given the green light by the Defense Ministry. When EAB expressed its interest in 2004-05 in getting involved in the Dreamliner 787 project, Boeing had already concluded deals with the so-called «first-tier risk-sharing partners,» and proposed to EAB to turn to some of them for a partnership, specifically Italy’s Alenia Aeronautica of the Finmeccanica group (which was already in an ongoing partnership with EAB on certain other projects). The EAB-Alenia partnership involves the construction of part of the Dreamliner 787’s fuselage, specifically the Cargo Door Surround (CGS) for as many as 1,022 planes, a project scheduled for completion in 2017. Filippakos said nearly 600 of the new aircraft had already been sold even though production has not yet begun. He added that sales were expected to rise above 2,000 aircraft. This investment in CDS system research and design activities will require EAB to spend -1.2 million, but sales are expected to be in the range of -73 million to -74 million. Viewing the technology segment as an extremely important area for enhancing competitiveness and its key financials, EAB plans to enter into a variety of joint ventures, working on research and technology or product advancement, «so that we can take advantage of our partners’ know-how, while offering our own,» Filippakos told Kathimerini. In addition to the Dreamliner 787, the Greek firm has already secured its involvement in a five-company joint venture set up to design a full-scale model of a «stealth» Unmanned Combat Air Vehicle (UCAV), a project being coordinated by France’s Dassault. Going further, EAB’s list of partnerships in European research programs includes Cesar (a 15-seater plane), Vulcan (explosion-proof aircraft structures), Casam (aircraft protection against land-to-air missiles), Patin (airport safety), as well as the development of clean regional aircraft and ECO design projects. Between 2004 and 2006, the new contracts signed by EAB came to a total value of -604 billion, and are expected to significantly boost sales in the coming years. What is of special importance, Filippakos stressed, is that an increasing number of deals are being made with foreign firms, reflecting EAB’s outward-looking policy. In 2004, foreign partnerships accounted for 20 percent of the firm’s overall deals, jumping to 40 percent in 2005 and then to 68 percent in 2006. In 2006, EAB posted sales of -185 million, and this year’s management forecasts are over -190 million. Management also feels that 50 percent of the firm’s sales will soon be made outside Greece. Speaking on EAB’s finances, Filippakos said that the company’s deficit was reduced from -70 million in 2004 to -48 million in 2006. However, he refrained from giving any figures on losses, saying they do not accurately reflect the company’s actual position. EAB has a work force of some 2,800, of whom 1,800 are skilled and specialized technical personnel, as well as 630 highly qualified executive officers. Replying to questions, Filippakos said he did not fear executive staff moving to private sector companies, given that salaries are highly competitive. A program aimed at improving the aircraft builder’s competitive standing includes a number of outsourcing contacts for a number of non-advanced technology projects, such as one already existing with Romania’s Romanaero. However, as Filippakos added, outsourcing should not be seen as less work for EAB personnel, as «we can take on business that we would have otherwise missed because of high costs.» The EAB boss named the company’s deal with USAF as among its greatest successes. The contract, signed following an international tender for the structural and electronic upgrade work on 100 F-16s stationed around Europe, was initially valued at -43 million, but Filippakos expects it will eventually come to over -60 million. In addition, he pointed to the opening up of the global upgrade market for the F-16 fighter planes, which are among the most popular fighter jets with as many as 4,000 aircraft currently in use in a number of countries’ defense systems. Another factor proudly stressed by Filippakos was the relationship of trust established between the USAF and EAB.