Together with bavAIRia we present study and project proposal for the Bavarian aircraft engine industry

• Bavaria accounts for about 50% of people working in Germany's civil and military aircraft engine construction sector (and an 8% share of the world market)
• The study analyzes the Bavarian aircraft engine industry and recommends strategies to enhance global competitiveness
• Focuses of the study: research and technology, the market for OEMs, the supply chain and after-sales concepts
• Main points of the project proposal: building cross company cooperation, promoting technology, and marketing

Bavaria alone is home to around half of all the people employed in civil and military aircraft engine construction in Germany. With a market share of 8% worldwide, Bavaria has become this industry's hub in Germany. For the companies involved, globalization brings new competitors but also new opportunities to sell their products.

The Bavarian aircraft engine manufacturers and component suppliers want to join forces by establishing closer networks. Under the auspices of bavAIRia e.V., the organization set up to manage the aerospace industry cluster in Bavaria, they launched a common platform in 2007 called "engine bavAIRia". The members of this initiative – MTU Aero Engines, Aerotech Peissenberg, Atena Engineering, FAG Aerospace (Schaeffler Gruppe), Leistritz Turbomaschinen Technik and Karl Binder – commissioned a study of engine construction in Bavaria to be carried out by bavAIRia and Roland Berger Strategy Consultants. The authors were also asked to draw up concrete recommendations for action on the basis of their analysis.
Building on this study ("Positioning and strengthening the Bavarian aircraft engine value chain"), the consultants developed their project proposals for the Bavarian engine industry between February and May 2008 in consultation with the Bavarian State Ministry for Economics, Transport, Infrastructure and Technology.

The study finds that it is more important than ever for the German aircraft engine industry to secure a worldwide presence. With technological and cost competition getting tougher, the suppliers must enter into closer partnerships with manufacturers and should be prepared to assume more of the risks. While globalization means new competitors, it also brings new sales opportunities. The "engine bavAIRia" study supplies answers to problems of the aircraft engine industry in Bavaria and forms the basis for a future strategy that takes into account every link in the industry's value chain.

Key areas of future cooperation

The project proposal defines five focuses for future cooperation projects. They encompass three different aspects: business model, technology and marketing.

Business model

1. Promoting a shift from supplier to partner: the development of alternative business models

The central idea here is to develop sub-risk-sharing partnerships between OEMs and the supplier industry. One idea is that the suppliers can form an umbrella company with which they can jointly achieve the critical mass they need, especially in terms of capital.

2. Regional production partnership for engine construction

By bundling the value added by the various suppliers, the companies will be able to make joint offers that are more sophisticated. This requires establishing a single interface to the OEMs or system companies. Better use must be made of supplier potential in the region. This approach leads to shorter processing times and less capital tie-up.

Technology

3. The technology platform MEE/MEA and monitoring: moving to the "More Electric Aircraft"

In this sphere of key technologies it is vital to build on the existing expertise in Bavaria, especially in electrical engineering and mechatronics. To this end, plans are being laid to create the new "More Electric Engine" competence center at the Bundeswehr University in Munich.

4. A development partnership for high-temperature materials

The study shows that core competencies in Bavarian aircraft engine construction lie in the "hot zone" – in the core engine. To remain a long-term player in the upper league of aircraft technology development, the industry must redouble its efforts to achieve cross-company collaboration on materials, especially on production methods for titanium aluminides as well as titanium and nickel-based alloys.

Marketing

5. Partnership to present Bavaria as a "Region of Excellence" for aircraft engine construction

It is essential to raise the international profile of the Bavarian aircraft engine industry, especially its small and medium-sized companies. Bavaria must become more familiar as a "Region of Excellence" for aircraft engine construction. The measures to be considered here include delegations abroad, joint information material or combined trade fair presentations in the US, Canada and Asia.