In Wales, the Aerospace Defence industry is flourishing; world-class training, innovation and expertise, from university research to government and private sector projects. Wales offers varying financial incentives, some of which are the highest-levels offered within the UK. Cardiff Airport and St Athan even have their own Enterprise Zone. It’s no surprise then, that according to Trade and Invest Wales, the industry has ‘attracted some of the world’s leading companies to Wales, including BAE Systems, British Airways, GE Aviation, General Dynamics, Raytheon, Zodiac Seats and Qioptiq. Airbus Group in North Wales employs 6,500 people in its civilian aircraft wing plant.’
We have spoken with Rachael Blackburn, Operations Director at Aerospace Wales Forum Limited to get her thoughts on the role the industry plays.
What do you consider to be the key motivations for aerospace organisations to establish in Wales?
Wales is a centre of excellence for aerospace manufacturing and MRO related activities; over 160 companies employ in excess of 23,000 people. State-of-the-art facilities now manufacture, supply, maintain, repair and overhaul, civil and military aircraft from around the world. The aerospace sector in Wales is a dynamic growth industry that operates on best practice techniques and is supported directly by the Aerospace Wales Forum.
It may come as a surprise to some that Wales has such a strong dynamic aerospace sector. With just 5% of the UK population, we have around 10% of the UK’s aerospace industry which includes 20% of the UK maintenance repair and overhaul (MRO) market.
They’re quite impressive statistics and clearly show we punch above our weight.
So why is the sector so strong in Wales? It’s a combination of factors: we have key players based in Wales, plus a real passion for the sector that’s committed to supporting its growth. We also have considerable academic expertise and great training programmes to produce a skilled workforce.
As the trade association for all companies operating in the aerospace & defence sector in Wales, Aerospace Wales Forum works closely with the Welsh Government to promote Welsh capabilities globally, facilitate collaboration and networking opportunities and encourage and support participation at major international events.
We work with companies of all sizes to provide the tailored business support they need to grow. Our key players include among others, Airbus, BAE Systems, GE, Nordam, Babcock and British Airways. The Airbus wing manufacturing operation in Broughton, North Wales, has been the subject of massive investment and is the single largest manufacturing plant in Britain. Employing 6,500 and supporting a further 2,000 people in the local supply chain, Airbus spends more than £120 million annually through its Welsh supply chain.
Civil aerospace operates in a global market and the implications of Brexit across the supply chain are a key concern in the sector. What do you consider the Government’s proposed sector deal will need to deliver to ensure that the civil aerospace sector in Wales can continue to flourish post-Brexit?
In the worst case scenario of a No Deal Brexit, the current stance taken by the EU is most disappointing and there is no doubt that it would cause travel chaos for the general public. It would also cause significant issues for the aerospace companies based in Wales because, as it stands none of the certification held by UK based companies will be valid in Europe after March 2019. This would have a particular impact on the companies operating in the MRO sector of which Wales undertakes 10% of the UK’s MRO activity. We are encouraged that the European Aviation Safety Association and the UK Civil Aviation Agency are in talks and a Brexit deal with a transitionary period seems to be the only common sense approach to come to a workable solution. The UK Government is working towards mutually recognised EU and UK aviation standards and we fully support a negotiated deal being put in place before March 2019 to avoid a No Deal Brexit. We continue to support our member companies during this period with a number of events organised around Brexit.
The role of robots and an increasing move towards automation is a hot topic in many sectors at the moment. How do you envisage the future of work will look in the aerospace industry?
Automation in aerospace manufacturing isn’t anything new. Since 2005, an artificial neural network has been used to adjust rotor blades on Airbus helicopters, making the adjustment of rotor blades a faster and more accurate process.
The global high demand for aircraft has created a massive order backlog and has made manufacturers look for more efficient, reliable ways of decreasing the backlog. Automation comes in many forms such as using technologies like Robotic Process Automation (RPA) in the back office, which can enable manufacturers to bring a multitude of benefits to the aerospace industry.
The ongoing demand for aircraft means that every aspect of manufacturing needs to work seamlessly and the deployment of software robots can speed up existing processes and many robots can act unattended on a 24/7 basis and one single robot could automate the repetitive work of 3 humans, enabling manufacturers to focus on more complex skilled tasks.
Robots and automation can also bring financial benefits to businesses. Organisations have traditionally looked to offshoring to handle repetitive tasks whereas RPA gives them the opportunity to complete the work internally, at a fraction of the cost. Human interaction is always going to remain an important aspect of aerospace manufacturing but people can work together with robots to improve both their output and the quality of their working lives.
Robots and automation are working hand-in-hand with people, resulting in employees being able to spend more time focusing on strategic work to finding new ways of delivering better results for their customers. This is not just more valuable to the company in question, it can play a big role in keeping employees engaged and motivated at work.
Which other sectors do you work with and learn from?
Aerospace Wales works most closely with the Welsh Automotive Forum as there are similar themes running through both sectors, for example we recently held an aerospace cohort at the Lean Manufacturing Programme being run by the Toyota Engine facility in Deeside.
With the new Advanced Manufacturing Research Institute (AMRI) being built in North Wales we are working across sectors, including Nuclear, Automotive & Food to ensure it is a collaborative centre where all advanced manufacturing companies can share best practice.
Aside from Brexit, what do you consider to be the key risks facing the sector and what opportunities do you see for its future development?
The commercial aerospace market has attractive opportunities with a positive long term outlook, supported by rising global GDP, increasing global air traffic and record order books. However, there are challenges especially with the industry executing an unprecedented ramp up of production over the next 3-5 years, when it is already operating at capacity. There is also the transition from older aircraft and engines to new variants. Therefore the main risks, alongside those in the political and economic environment are managing the supply chain in line with the increase in production numbers and managing and retaining talent within organisations.
Aerospace Wales continues to support our members by promoting their capabilities at global events and exhibitions, holding supply chain days with the prime organisations and giving members access to events, networking opportunities and industry expertise.
As Rachael has highlighted, the Aerospace and Defence is a complex sector; at Hugh James, we understand that this requires legal advice from lawyers with experience across a range of disciplines. Our lawyers have experience working for and advising the Ministry of Defence, including former service personnel. This has given us invaluable insight into the sector, including DEFCONS and the Single Source Contract regulations. This means we are able to offer expert, high quality commercial advice to businesses operating in aerospace and defence.
Our team can provide a full service to businesses in the aerospace and defence sector and our proactive approach means that we can help you solve problems before they occur, supporting our clients commercially and providing updates, relevant events, commercial opportunities and market-leading training.
To find out more about the services we offer for the Aerospace and Defence sector, please contact Emily Powell, Partner, on 029 2267 5540