In the background of Paris Air Show 2017, Neetu Dhulia, Deputy Managing Editor of SP’s Aviation, in a face-to-face with Colin R. Mahoney, Senior Vice President, International & Services Solutions, Rockwell Collins, discusses the company’s plans for future of aviation
Neetu Dhulia (Neetu): Which all programmes are being showcased at the show (Paris Air Show)?
Colin R. Mahoney (Colin): Paris is a very diverse show for us. We are talking in terms of the future of the aviation. What are we doing in the cockpit of the aircraft and in the cabin of the aircraft, how are we connecting these and communicating the eco structure of aviation. The whole world is changing around and we are looking at what we can do with systems on the airplane, systems on the ground and putting that big picture together is what we are focusing from an innovation point of view. We are highlighting how the investments in innovative solutions for cockpit, cabin, communication and connectivity are unleashing the potential of the rapidly changing aviation ecosystem and that is what we are showcasing at the Paris Air Show.
Neetu: What is the most crucial futuristic technology Rockwell is working towards these days?
Colin: We are taking another leap towards transforming the aircraft to be more digitally connected. This connectivity is on the early phase of adoption. We have seen examples of cutting edge type of approach to using the connected environment. One of these examples is what we have done with ACAS communication with our ARINC IMS (Information Management Service). We are doing the communications, data network and landing system avionics packages for the Airbus A350. The communications system includes next generation VHF and HF systems, a satellite communications system with low profile antenna and dual Swift broadband capabilities, an avionics communications router with datalink for services such as FANS-B and a ‘gatelink’ cellular technology system that links the aircraft with low-cost ground networks once it has landed. The system tracks and probes the aircraft and when something doesn’t go right it automatically increases the frequency of that system that is tracked by end services.
Then there is FOMAX (flight operations and maintenance exchanger), digitally connecting A320 aircraft and operators. The solution keeps operators connected to their aircraft by deploying the infrastructure for secure wireless connectivity; the box speaks to everything on the aircraft aggregates the transmission and automatically sends it to ground-based operations. The unit also sends data automatically to the growing number of mobile applications that are being used by flight crews, as well as into efficiency applications such as weather, flight planning, logbooks, and maintenance prediction and performance calculators, all of which bring new levels of productivity and value to airline operations. As the modern traveller evolves, so do airports. Airports must adapt, innovate and envision how to meet the needs of an industry where passenger traffic is growing by about 5 per cent each year. Rockwell Collins has a global presence at more than 150 airports, including half of the 20 largest in the world. As a leading provider of self-serve solutions, and with a reputation as a master communication network integrator, we understand that the flow of an airport is the flow of an industry. We have the responsibility, that, when that passenger turns to the airports, boards a flight, does whatever connectivity wise and then lands, we maximise how to make the entire process efficient and make most out of it.
Neetu: What has been the vision behind the acquisition of B/E Aerospace?
Colin: How do you expand a company like Rockwell Collins, which has done significantly well in all domains? We have looked at what other capabilities could be. B/E Aerospace is number one in the market and with that number one; Rockwell Collins has an access to all those markets for expansion. The acquisition strengthens Rockwell Collins’ position as a leading provider of cockpit and cabin interior solutions, offering diversified product offerings for aerospace and defense. With the acquisition, Rockwell Collins expands its portfolio with a wide range of cabin interior products for commercial aircraft and business jets including seating, F&B preparation and storage equipment, lighting and oxygen systems and modular galley and lavatory systems.
Neetu: Can you give us the breakup of the turnovers and the business contributions attributed to the broad areas such as military and civil?
Colin: The company mix now is 75 (government): 25 (commercial). In commercial we now have B/E Aerospace, one nice note to make around the acquisition is that the capabilities inside our interior system business have historically been extremely focused on airlines and business aviation, we can take those capabilities to most channels seating, lighting, oxygen, gallery, etc. We bring the channel knowledge so we can take those opportunities to our government channels, to our customers and that’s one revenue synergy.
Our government business is in three areas: Airborne — everything we do on the aircraft platforms, avionics platform and taking the commercial technology that we have developed through very large markets such as fusion flight deck and putting around in the aircrafts such as KC-390 and even beyond that, using elements of fusion to expand in parallel domains that are new for us. We are using the technology with elements of fusion for cargo handling systems and Embraer trusts us to do that on edge. And then there is — communications, navigation and electronic warfare, the whole network -centric operation tend to keep our forces communicate effectively, offering collaboration with effective partners. Third of our government business is – Simulation and Training, which is growing from strength to strength, leveraging our strengths in avionics systems development and training systems design, we deliver integrated solutions that cover the entire training gamut, from instructional systems design through fully integrated, highfidelity simulators. Of all the F35s going around the world, we have huge stimulation and training opportunity and we are doing very well with it. We unveiled the first certified 737 NG stimulator in China with our joint venture. We are obviously growing and positioning for next-generation training in live virtual constructor which is combining virtual assets with live, creating an environment. Trained as we fight, we are making sure that we maximise effectively and minimising cost.
Neetu: What is the overall size of Rockwell Collins in terms of order book/balance sheet?
Colin: We are going to conclude this year at $6.7 billion+ and that’s not a full year that includes the B/E’s revenue half way, post the acquisitions. We operate on government fiscal cycles.
Neetu: What are the contributions of domestic (US) and export markets (outside US)?
Colin: Now with B/E Aerospace, we are about 51 per cent when we get FY 18, we will be 50:50 i.e. 50 per cent international and 50 per cent domestic.
Neetu: Which region/s contributes the most?
Colin: Our regions are divided in three; we have got international, India, Europe, Middle East and Africa then Asia-Pacific. We look down from India way down to New Zealand and then the Americas and which is Canada and everything from Mexico and below. EMEA has got almost developed western economies in them and Airbus is there and that’s the predominance of what we are doing in international. So half of our international would be in that EMEA region and next would be Asia-Pacific with next huge growth commercially now India itself, with SpiceJet, IndiGo and Jet Airways. Every King Air that goes into the country is equipped with our equipment and we are doing well with the big airlines as well. Big airlines are huge customers of ours from day one. Then America will be the third region.
Neetu: How do you find the Asian market vs. the developed markets?
Colin: Asia-Pacific is our biggest, if we look at the percentage growth year on year that is the biggest growth. Growth in India, in China, in Southeast Asia, North East power house and Australia is already a developed market. We see most growth coming out of Asia-Pacific. Middle East is part of our EMEA region and also a good market. We are doing well within avionics and interiors. When you fly Etihad, Emirates or Qatar it is our systems and B/E seats on those carriers.
Neetu: What are your ongoing programmes that you are pursuing in countries such as India and China?
Colin: In China you have seen us talk about the Head-up Guidance System (HGS), that allows pilots of light- or mid-sized business aircraft to benefit from the tremendous safety and operational gains previously only available to large aircraft, which is a very successful. We are working with the Chinese Civil Aviation Authority (CAAC) for long time, given their traffic concerns; growth of traffic airspace is getting busier and busier. HGS make lot of sense. CAAC essentially mandated publishing an application road map whereby end of 2020, 50 per cent of the airplanes have to be equipped and we are already over that, and we are not even close to 2020. Whole connectivity side has been a big deal in China as well lots of companies are popping up accentuated by passenger value added services. In India, commercial is growing strength to strength, we have talked about those the big airlines, bizav is also growing. With the current DPP and ‘Make in India’ philosophy around defense, there is a place into our strategy where we partner in country to achieve something. In India, it’s a big component on how we are going to carry our government business. So relations with the Tatas, Zen is imperative and with these alliances, we aim to emerge in the near future, as key partners to the Indian armed forces.
Neetu: You have a design centre in India. What are your futuristic plans for this?
Colin: We have the India Design Center (IDC) which has been an absolute jewel; we love what we do in India. It has expanded significantly; we are currently about 1,000 people in the IDC and have two locations Hyderabad and Bengaluru. With the acquisition of B/E Aerospace, we have more to come. From these centers we can operate with great access to talent, because it is, ‘aerospace’ and aerospace is it is exciting, the talent gravitates what is exciting. We offer round the clock nature of support for our customers and it is really powerful, each of our businesses are pulling on that capability and It is really going well. We will take this journey forward to interior systems.
Neetu: Would you like to elaborate on any specific activity in context to India touching upon military and/or civil markets’ potentials?
Colin: Growth of airline business is solid because of the access to economical travel for the masses; middle class in India, the traffic will continue to grow. And, with all those airlines growing, there is good fortune for us! We are involved with all of them pretty much exclusively that is a great environment. In regard to the military environment, the budgets are increasing, the DPP is still accretive to customers/suppliers like us and the country like US is doing business in India through partnership. The environment is still good news for defense business through partnerships. It is the speed of execution sometimes that we have to be patient about for a bright future. Patience and persistence are the key constituents for success.