Legacy parts specialist Ontic has seen its mix of business change during the pandemic but a steady flow from its rotorcraft, cargo, and military clients helped lead the company to a record sales year in 2020, executives said.
“Even in the pandemic, we’ve hit the highest level of sales we’ve ever had,” said Chris Muklevicz, Ontic’s head of sales and marketing for North America. “The demand is still coming in strong.”
The mix wasn’t what they had originally expected, particularly with the fall-off in commercial airline operations, he said, but added Ontic benefited from a diversified portfolio that touches most aircraft.
Acquired by CVC Capital Partners’ CVC Fund VII from BBA Aviation in late 2019, the Cheltenham, UK-based company manufactures, supplies, and repairs complex parts no longer supported by the original equipment manufacturers. Ontic supports more than 7,000 parts for aircraft ranging from the Sikorsky Sea King and Bell 206 to the Gulfstream IV and Boeing 777.
“We haven’t seen a shutdown in the market; we’ve seen different focus areas,” Muklevicz added, noting that the business model has shifted with repairs and parts demands from the major cargo carriers, in particular, continuing at a strong pace.
The rotorcraft business also has remained strong thanks to a customer base including both military clients and large fleet operators in fields such as medevac and petroleum. This balance has offset some of the uncertainty from a few of its military programs where funding may have been reallocated for pandemic-related activities, or as the administration shifts over and brings new priorities, Muklevicz said.
Despite this uncertainty, he explained, “demand is still very active. There is still a need to maintain fleet readiness.” The challenge has been trying to match production to the ebbs and flows of that demand, Muklevicz said.
Robert Sadler, director of business development, added that in times of uncertainty, the government may need to step back from new programs. “That means this older stuff is going to fly longer and that works well for us. We don’t see much of that disappearing.”
He pointed to the Sikorsky CH-53 Sea Stallion that has been in service since 1966. “I would have never thought 30 years ago that we would still be delivering product for the CH-53 [in 2021],” he noted and said, “We do pretty well with the established platforms we’re supporting because they don’t get retired out as anticipated.”
In fact, Ontic has expanded some of its work on the military side in the areas of landing gear and fuel controls, Sadler said. “It’s been fairly active on new licenses” including with military rotorcraft.
On the civil side, the pandemic has caused a number of manufacturers to step back and reevaluate their product lines as they have faced necessary layoffs, Sadler noted. Others have refocused their resources for the next couple of years, he said, adding that Ontic has ongoing discussions regarding products that these manufacturers may no longer see a business case to support. “That activity has increased because of the situation we have all been in,” he stated.
Late last year, Ontic had announced that it had acquired the manufacturing rights for four types of aircraft instruments from Flightline Electronics, as well as the manufacturing rights for additional JT15D engine parts from Pratt & Whitney Canada.
It also has seen its business base grow through its acquisition of Creedmoor, North Carolina-based Firstmark—the parent of Twin Commander, Aircraft Belts, and Firstmark Aerospace—in late 2018, particularly in areas such as seatbelts and fasteners, Sadler told AIN. “That’s also opened up our exposure to new markets."
Since that acquisition, Ontic has expanded its North Carolina operations. It also has manufacturing and/or maintenance facilities in Chatsworth, California; Plainview, New York; and Singapore, along with Cheltenham.
As far as future growth, Sadler said the company would look for products that would fit within its portfolio and that it could grow. In addition, the company is looking at potential further expansion in Europe. “We have a lot of customers and a lot of products that are used across that region," he stated.
All of this is possible under the new owners, Sadler said. Ontic had a “great relationship” with its previous owner, BBA, but going from a public company to private equity “has been very good for us.” Ontic is the investment fund’s only aerospace company, he noted, adding as such, “Our path to funding for investment is shorter and more focused for us.”