SAVERIO STRATI, CHIEF EXECUTIVE OFFICER, FIATAVIO S.p.A

PARIS AIR SHOW 2001

	June 17	June 18	June 19	June 20

On the Record with
SAVERIO STRATI, CHIEF EXECUTIVE OFFICER, FIATAVIO S.p.A

There is no doubt, that with the Consolidation Dance about to begin, FiatAvio is dressing for the ball.

"Fragmentation in the European aero engine business is quite broad, and for sure there are opportunities to offer wider and cheaper services to the market," says FiatAvio CEO Saverio Strati. "FiatAvio, MTU, Snecma and Volvo Aero should find an agreement, an alliance or cooperation-for sure this will happen."

While there are no pressing short term needs to consolidate, it is ultimately inevitable, Strati believes. The major question is how to unravel the myriad partnerships the players have with each other and with U.S. companies.

One answer might be a structure similar in concept to EADS, Strati suggests. Or one grouping for commercial business, and another for military. But whatever materializes, "we must be able to work with all the OEMs," he says.

One name missing from his list is Rolls-Royce. "I would like to consider them a customer rather than a potential merger partner," Strati opines.

His views on the other companies:

Snecma: "Could be very interesting in terms of consolidations. It is more OEM than FiatAvio or MTU, but there are many opportunities to consider working together." Snecma is also heavily involved in space propulsion and services.

MTU: Much more like FiatAvio (even being owned by an automotive company). "We started working with them in the 1970s on the RB199, and we have worked together on commercial programs for 20 years."

Volvo Aero: "It, too, should consider opportunities and alliances."

-- J.M.

A new FiatAvio has emerged with the turn of the century, one that's determined to play a larger role in the aero engine business both in Europe and worldwide.

The firm's transition over the years from a supplier to a risk-sharing partner in the world's major programs, and now its leadership in developing the Vega, Europe's light rocket launch vehicle, has brought a new confidence with CEO Saverio Strati at the helm.

Two years ago FiatAvio reentered the Paris Air Show after an absence of at least 10 years, and was so impressed with the response that it's back this year with a bigger stand and, for the first time ever, a chalet.

The FiatAvio re-emergence au Bourget coincided with casting off the company's power generation business, leaving aerospace as its sole focus. "We were never out of the aerospace industry, but now 100% of our activity is in line with Le Bourget," says Strati.

"Our presence, our image here is very important to signing contracts in the following years," Strati told Show News.

Strati is here to impress FiatAvio's willingness to increase its role as a risk-sharing partner, and its strategy to win more maintenance business (an alliance is pending with a company in the U.S., where, says Strati, the Italian needs a bigger presence).

The company, which reported a 32% increase in profits to $119 million last year on revenue growth of 9.6% to $1.25 billion, has four main businesses: commercial engines, military engines, repair and overhaul, and space. It has a 6% share in Arianespace, 20% of Turbo Union, which makes the RB199 engines for the Tornado, and 21% of Eurojet, which is just entering production for the Eurofighter.

Special FiatAvio skills include design, development and production of accessory gearboxes and power transmissions, low pressure turbines, variable exhaust nozzles, engine lubrication systems, afterburners, auxiliary power units, and discs and shafts.

Major programs include the EJ200, the GE90 and its growth versions, CFM56, CF6, the T700 family of helicopter engines, the PW2000 and 4000, the V2500, and the P&W Canada 100, 150 and 308. FiatAvio will also play a role in the TP400 turboprop for the A400M European transport.

Recent FiatAvio developments include working with Rolls-Royce for the first time on commercial programs as a risk-sharing partner for the low-pressure turbine on the Trent 500, and with Honeywell on the F124-GA200 turbofan for the Aermacchi M346 jet trainer, where FiatAvio will integrate all activities for the engine.

Transatlantic military program partners include Pratt & Whitney on the F119 that powers the F-22 Raptor, where FiatAvio is the sole qualified manufacturer of the gearbox.

Gearbox expertise has brought a strong relationship with Eurocopter and Sikorsky, and with Pratt & Whitney Canada on the ATFI geared fan demonstrator engine, where FiatAvio is responsible for the main power transmission and other significant components. The engine is on display here on the Pratt & Whitney stand.

By John Morris


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