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 VIP Interview
Walter A. Stephan
Chairman of the Board & CEO of Fischer Advanced Composite Components AG (FACC)
Austria's number one aerospace component supplier sees a huge market for parts made from composite materials.
FLUG REVUE: Mr. Stephan, your company is the biggest aerospace components supplier in Austria. How would you describe your position on the market?
Walter A. Stephan: Yes, that is right. In Austria we are the biggest company, and on the world market we are about number 30. But in the composite sector, which is attractive to a small company such as ours, our ranking is between fifth and tenth.
FR: You have become well-known for the production of blended winglets for aviation partners of Boeing, but your company also makes a large number of other subassemblies. What is the current orders situation?
Stephan: Our orderbook is very full and our backlog currently stands at around $1.2 billion. 80 percent of this relates to structural components, while 20 percent of our sales come from aircraft completions. The most well-known example of this is the new Airbus A320 cabin, the components for which are supplied by us.
FR: Only recently you opened a new factory. How much did you invest in the new production facility?
Stephan: We invested around EUR 40 million in buildings and plant. On top of that we spent between EUR 30 and 35 million on developing the products which are built there. The new factory will concentrate primarily on the production of engine cowlings, starting with the GEnx and the Trent 1000 for the Boeing 787. Production has already been under way since 1 April 2007.
FR: The rate at which your company has grown can only been described as meteoric. How have you succeeded in recruiting the qualified staff needed for this?
Stephan: It is not just on the customer side that we are globally oriented, but also when it comes to our employees. For example, we have an engineering office in Vienna, but we also have parts under development in Bratislava and India. Again, we have small offices in the USA and China as well.
FR: The decision was recently made to develop blended winglets for the Boeing 737 Classic too, but the contract went to a different company. Why was that?
Stephan: We didn't exactly pull out all the stops to win that order. We don't believe the market for those models is that big, as they will be replaced relatively quickly over the next few years. The Boeing 737 Classics are 15 years old on average and are slowly approaching the end of their service life. With the 757, the situation was different as the increase in range and lower fuel consumption which they had acquired effectively gave them a new lease of life.
FR: How many blended winglets have you delivered so far?
Stephan: The 737 NG and the 757 are both on a single line, and last year we delivered our 1000th shipset. This year we will build 750, around 300 for new aircraft and the rest upgrades to existing aircraft, an area in which the orders are slowly declining. Between 80% and 100% of new aircraft will be equipped with the winglets. Interestingly, the Chinese airlines are virtually the only ones which are not interested in having the winglets.
FR: Your production track is tightly organised, and you cannot afford any waste as this would immediately throw your tight delivery plans into disarray. How do you cope with this?
Stephan: We currently produce three and a half shipsets a day in a two-shift operation, i.e. about 70 a month, which are delivered directly, already painted. That requires well-rehearsed logistics, but above all that our employees have an internalised awareness of quality. We have invested a great deal in training, but we have also automated a lot so as to minimise the risk of defects. As part of this, we operate a separate repair line because some three percent of our order backlog relates to repairs. For example, one of the main dangers to winglets is lightning strike, but collisions with larger aircraft during taxiing are also quite common. The more aircraft are equipped with winglets, the greater the demand for repairs will be.
FR: At the moment you have good utilisation right though to 2014. What new business areas do you plan to develop for the period after that?
Stephan: The Boeing 787 is a very good example for us, because about 50 percent of it is made from composite materials. As well as cowlings, we also produce leading-edge slats, spoilers and other composite components here. The use of these materials in aerospace applications is set to increase in the future. On the A350 XWB, Airbus has increased the composite element from its original 30 percent to over 50 percent. We see enormous growth here and our one concern is that the component supply industry will not be able to meet these requirements. The market volume in 2010 will be three times what it was in 2004, and between 2010 and 2015 it will double again. This presents us with tremendous opportunities, so we intend to stick very much with fibre composite technology
Matthias Gründer was asking the questions
From page 17 of FLUG REVUE 10/2007
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