Safran Sees Opportunity in Tough Times
While the looming threat of budget sequestration kept more than a few aerospace executives up at night, Safran USA president Peter Lengyel spent most of his waking hours preparing his company for any eventuality. That doesn’t mean he welcomed the prospect of drastic spending cuts to medevac services, law enforcement and border patrol. After all, the U.S. federal government is, in effect, Safran’s biggest customer. But, as Lengyel explained to AIN, the company’s broad scope of disciplines and global footprint positions it to react to and thrive in the kind of adverse business environment less diversified companies struggle to navigate.
Safran has just emerged from what Lengyel described as a strong year overall, even while recovery of the helicopter market sits in a “strategic pause.” Meanwhile, the group continues to invest more than 11 percent of its revenues in research and development, he said, as it increasingly aims to combine the efforts of its various companies toward presenting a “bundled offering” for aftermarket applications and new programs.
In new helicopters, Safran’s concept of offering various systems as a single platform appears in its bid consisting of subsidiaries supplying Turbomeca engines, Sagem avionics and Labinal wiring harnesses for the Armed Aerial Scout, the U.S. army’s planned replacement for the Vietnam War-era OH-58 Kiowa. Lengyel said the company took the same approach with the U.S. Army’s UH-72A Lakota Light Utility Helicopter, for which Turbomeca supplies the Ariel 1E2 turboshaft and Sagem provides the automatic flight control system. “It’s that ability to synergize internally within the Safran group and provide a better, more compelling argument for the primes that reduces their integration costs, their list of suppliers and complexity,” said Lengyel.
Already projecting a substantial industrial presence in the U.S. with 6,500 employees working at 31 companies (including joint ventures) in 22 states, Safran expects to make its argument all the more convincing with its imminent acquisition of Goodrich Electrical Power Systems. The acquisition would not only expand Safran’s U.S. footprint, it would support the efforts involving so-called more electric aircraft solutions now led by its Hispano-Suiza unit.
Safran’s collaboration with Honeywell on an electric taxiing system reflects both its interest in U.S. partnerships and its commitment to green technologies. Scheduled for introduction in 2015, the system would cut emissions, fuel burn and noise. It incorporates technology and expertise from no fewer than four Safran group members, again illustrating the company’s ability to bundle several elements of a project.
Those efforts in green disciplines also extend into the aftermarket business, where Lengyel sees particularly promising opportunities in segments such as natural gas exploration and tourism. There, operators of small, aging helicopter fleets face increasing costs associated with maintaining older systems.
“Faced with the economic realities, we have to make more systems last longer and be more cost efficient over the long haul…and greener, if we’re going to survive these challenging times,” he said. “So that’s where our aftermarket insertion of technology in retrofits is equally as compelling as our new program offerings, as they are with, for instance, the Aerial Scout.”
Investment in retrofits, condition-based maintenance and maintenance monitoring systems all save in the long run and can cut ownership costs for end users, the Safran executive noted. For example, switching to an all-glass cockpit from subsidiary Sagem offers enhanced flight safety, downloadable post-flight data capability for training purposes and more efficient flight routes–often for less than the cost of replacing individual gauges.
“Our challenge will be to create that compelling argument for folks to consider how they might spend a little bit of money to save a heck of a lot more,” said Lengyel.
Of course, saving money hasn’t always ranked as the top priority of Safran’s biggest end user–the U.S. government. But as the unsustainable national debt forces budget cuts, Safran and the aerospace industry as a whole will have to adapt. Nevertheless, that need won’t alter the company’s fundamental approach to its business, said Lengyel.
“Notwithstanding the current economic situation and the changes in the marketplace, we are focused on innovation, investment in R&D and strengthening our partnerships so that we have, as we say, partnerships with meaning–being a value-added partner as opposed to a supplier of things,” Lengyel insisted. “That’s not what we are; we’re much better than that.”