European Defense Companies Focus On Asia

By Leithen Francis
Source: Aviation Week & Space Technology

Malaysia has also become an important market for Swiss aerospace giant Ruag Aviation, which has generated work helping to maintain the Malaysian air force's Northrop F-5s, Boeing F/A-18 Hornets and Pilatus PC-7s, the same aircraft types that the Swiss air force operates. Ruag Aviation, being a Swiss-based company, used to derive nearly all its revenue from Switzerland; it helps maintain the Swiss air force fleet.

Ruag Aviation's vice president for subsystems and products, Stephan Jezler, says the amount of revenue the company generates from Switzerland has fallen to 50%, as a result of a steady decline in the Swiss defense budget. He predicts the percentage will drop further. “Switzerland's defense budget is slowly going down. It is slowly shrinking, as is the case with all countries in Europe,” Jezler says. “That is why needed to have this international strategy.”

One way Ruag is expanding internationally is through acquisitions. For example, it acquired Rosebank Engineering in December to gain a strong footprint in Australia. Rosebank helps maintain aircraft for the Australia and Malaysia air forces and an agreement with BAE Systems to manufacture components for the Lockheed Martin F-35.

Ruag is also looking closely at Latin America, a growth market where there is still a sizable fleet of F-5s, a type that Ruag has much experience maintaining. Brazil's air force has been upgrading its F-5s with help from Embraer, but Jezler says Ruag has the advantage of access to a large stockpile of F-5 spare parts. When the Swiss air force sold some of its F-5s a few years ago to the U.S. Navy for training use, the sale excluded spare parts, he adds.

Ruag is also hoping it can win contracts to help support Gripen NG customers thanks to an agreement it has with General Electric, the maker of the Gripen NG's F414 engine, which also powers the Boeing F/A-18E/F Super Hornet. Ruag will support the Swiss air force's future fleet of Gripen NGs, and Jezler says the agreement with GE allows it to support Gripen NG and Super Hornet operators overseas as well. Brazil is seeking to buy new fighters, and the Gripen NG and Super Hornet are in the running along with other types.

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