ontario aerospace industry overview

October 2013

Industry Overview

Growth

Globalization

Supply Chain Transformation

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Global Aerospace - Trends

Air travel remains a robust growth market

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Do You Believe In Super Cycles?History And OEM Plans For Large Jet Transport Deliveries By Value

'59 '63 '67 '71 '75 '79 '83 '87 '91 '95 '99 '03 '07 '11'13'15'17'19'21$0

$50

$100

$150

$200

(Value in '13 $ Bns)

History OEM Plans Repeat of last ten years Teal Forecast

With OEM plans:‘03-‘14 9.6% CAGR, 175.1% Growth;‘11-‘14 16.4% CAGR

DRAFT 1 5

Fewer, but still many direct

partnersLimited role for “integrators”

Many direct partnersNo real role for “integrators”

Build to print for parts and sub-

assemblies

Fewer large partners sharing the risk, strategy and

opportunitiesExtensive integrators role

Global extended enterpriseEach tier has more opportunity

Raw Materials

Make-to-print Parts and Assemblies

Large-scale Integration

Platform Assembly

Value-added Parts and Assemblies

TIER 1RSP

Airbus Airbus

(50% of an aircraft cost)

Airbus (80% of an aircraft cost)

Past Today The New Airbus

Airbus sourcing principles: enhanced responsibilities

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Aircraft Manufacturing Transforming the Supply Chain

TIER 1(OEM)

One to Many

TIER 1(OEM)

TIER 2(SystemsIntegrator)



TIER 3(Product)

TIER 3(Product)

TIER 3(Product)

TIER 3(Product)

TIER 3(Product)

Tier 4BTP / Services

One to Few

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Ontario Aerospace, Space, Defence, UAV & MRO Sector

An Overview

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2nd largest in Canada Aircraft Systems & Equipment Space Systems & Equipment Aerostructures Aircraft Integration Defence MRO

22,000 people most are technicians, engineers, scientists

$7 billion in revenues ~ 80% exports ~ 80% commercial

Ontario’s Aerospace Industry

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Ontario’s strengths

◦Integrated Systems and Equipment Aircraft & Space

◦Aircraft Structural Assemblies

◦Aircraft Integration A wide range of aerospace / aviation design,

manufacturing, and product support capabilities

In the heart of Canada’s strongest and most diverse technology-based industrial and commercial business community

Ontario’s Aerospace IndustryA growing, global competitor

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• A technology-intensive, diversified cluster

• Focused on Systems & Equipment, Aerostructures and Aircraft Integration

• Rich and diverse industry / technology capabilities

• Strong supporting business / commercial infrastructure

• High calibre technical & business people

• Superior R&TD support

• Globally competitive

Ontario Aerospace Industry

Ontario is the place to go for aerospace innovation and engineering excellence

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A Proud History of Innovation & Technology Leadership

Valued Partner in our Communities

Strong Contributor to our Economy

Ontario Aviation / Aerospace

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A Proud History of “Firsts”

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“Silver Dart” – first powered flight in Canada - piloted by Toronto-born J.A.D. McCurdy. 1909

Curtiss JN-4 Canuck - first airplane manufactured in Canada. Over 1,200 built. Toronto 1917 - 18

World's first variable pitch propeller flight tested. Flight safety and economy greatly improved. 1927

World's first anti-gravity suit tested at Camp Borden. Developed at University of Toronto. 1940

de Havilland Beaver – World’s first successful short takeoff & landing airplane. Toronto 1947

Avro C-102 Jetliner – First commercial jet transport to fly in Western hemisphere. Malton 1949

CF-100 fighter – First front line fighter designed & built in Canada. Toronto 1950


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Orenda Engine - Canada's first turbojet engine. Most powerful engine of its time. Toronto 1950

de Havilland Otter – Opening Canada’s north to commerce and industry. Toronto 1951

Avro Arrow CF-105, supersonic, all-weather fighter plane, first flight. Considered most advanced jet interceptor in the world. Toronto 1958

World's first emergency locator device built. Required today on all civil aircraft. Ottawa 1959

Canadarm - world's first remote manipulator for space. Ottawa and Toronto 1972

First elements of the Space Station Remote Manipulator System launched to begin assembly of the International Space Station, with Canadian Astronaut Chris Hadfield. 1999


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Regional Aircraft (RJ Family, Q Series) Bombardier

Business Aircraft (Global Series) Bombardier

Commercial Helicopters Bell Helicopter, Eurocopter

Light Aircraft (Flight Training) Diamond

Special Purpose Aircraft Bombardier, Field, Found

Small and Medium Turbine Engines Pratt & Whitney Canada

Aerostructures Arnprior Aerospace, Avcorp, Boeing, Magellan, IMP

Landing Gear Systems UTAS Landing Gear, Messier-Bugatti-Dowty, Heroux-Devtek

Aircraft Environmental Systems Honeywell

World Leaders in Selected Niche Markets

Located in Ontario

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Electric Power Systems Honeywell

Aircraft Satcom Systems CMC, Honeywell Ottawa

Air Traffic Control/Management Systems Raytheon

Conversion / Upgrade / Retrofit Field, Cascade, Kelowna

Integrated Space Robotics Systems MDA

Satellite Multiplexers and Switches ComDev

Satellite-aided SAR Systems Honeywell Ottawa

World Leaders in Selected Niche Markets

Located in Ontario

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When you fly Porter Airlines, your quiet, comfortable, fast and reliable trip is on a Bombardier Q400 aircraft designed and made in Downsview.

Ontario aerospace industry’s successes

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Global business jets are the world’s most preferred long-range, luxury business aircraft - made in Downsview.


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When you are flying on a Boeing jetliner at 35,000 feet, the warm, clean air you breathe is thanks to Honeywell engineers in Mississauga.


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When you take off and land on a large airliner, 4 times in 10 it’s on landing gear made by Goodrich Landing Gear in Oakville or Messier-Dowty in Ajax.


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When you see the Canadarm robotic arm enabling astronauts to repair critical equipment on the outside of the Space Station, that’s done with space robotics technology developed by engineers at MDA in Brampton.


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Cluster Tier 1 Tier 2 Tier 3 Tier 4 Employees

Aerostructures 2 13 42 29 12,400

Landing Gear and Flight Control Actuation

4 13 19 18 9,000

Avionics & Flight Management

2 24 12 3 5,500

Turbine Engines 1 6 17 12 2,900

Environmental Conditioning & Electric Power

2 2 3 2 1,900

MRO 7 10 11 2 7,200

Ontario Aerospace Clusters

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Ontario Aerospace Industry Structure

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Aerostructures, Assemblies and Components 550 2 75 1 7,326 12 2,953 44 1,226 31 569 14 12,699

Landing Gear Systems & Flight Controls 2,250 6 1,249 5 1,053 7 2,584 27 571 18 300 10 8,007

Engines and Engine Components 700 1 1,080 8 72 2 1,287 26 524 12 30 2 3,693

Avionics Systems, Equipment 470 2 3,761 24 175 2 1,286 14 88 3 723 10 6,503

Environmental Control Systems & Electric Power Systems 1,152 2 213 3 1,230 2 474 5 30 1 245 2 3,344

Totals 5,122 13 6,378 41 9,856 25 8,584 116 2,439 65 1,867 38 34,246

% 15.0% 4.4% 18.6% 13.8% 28.8% 8.4% 25.1% 38.9% 7.1% 21.8% 5.5% 12.8% 100.0%

Ontario Aerospace Key Clusters

TOTALTier 2BTier 1 Tier 2A Tier 3 Tier 4 Enablers

Empl

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Ontario Aerospace Industry Structure

15%

19%

29%

25%

7%

5%

Employment by Tier Level

Tier 1Tier 2ATier 2BTier 3Tier 4 Enablers

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Ontario’s strengths

◦Integrated Systems and Equipment Aircraft & Space

◦Aircraft Structural Assemblies

◦Aircraft Integration A wide range of aerospace / aviation design,

manufacturing, and product support capabilities

In the heart of Canada’s strongest and most diverse technology-based industrial and commercial business community

Ontario’s Aerospace IndustryA growing, global competitor

Ontario Aerospace Growth Strategy

Enhanced Knowledge

& Skills

ESPRIT Global Supply

Clusters Accelerator

Ontario Aerospace

R&TD Challenge Fund

Market Outreach

IRBs IRBs

IRBs

Drivers

Enablers

Public Procurement

IRBs

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Market Outreach Access to current and emerging markets Priorities

Ontario Aerospace R&TD Challenge Fund OAC + OCE + NSERC Funding to support initial projects totalling $2.5M

Enhanced Knowledge and Skills Transform how we select and develop our people Transform how we work with our educational

partners

OAC Strategic Initiatives

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ESPRIT Ontario Aerospace Global Clusters Accelerator◦ Key Clusters – Landing Gear, Aerostructures, Avionics, etc.

Suppliers – grow our SMEs, higher value Systems Integrators and OEMs – more, growing Supply Network Systems – globally leading performance

OAC Ontario Cluster Leadership Organizing collaborative Working Groups, Teams, etc. Delivering agreed programs and projects

OAC Strategic Initiatives (cont’d)

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ESPRIT Supply Clusters Accelerator

Enhanced Knowledge

& Skills

Advanced Manufacturing

Systems

Design Engineering Capabilities

SME Supplier Advancement

Technology Development

Supply Cluster Performance

Market Opportunities

IRBs IRBs

IRBs

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220 Member Companies 200 Industry Members+ Associate members 20 Affiliate members

Established in 1993

Leadership by Board of Directors

OAC Core Purpose To be the voice of the Ontario aerospace industry To increase Ontario’s share of the global aerospace

market

OAC

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Todd YoungV.P. Customer Services & SupportBombardier Commercial Aircraft

Jim ButyniecPresident & CEOMagellan Aerospace Ltd.

Dan BreitmanV.P., New Product IntroductionPratt & Whitney Canada

Pierre DelestradePresidentEADS Canada Inc.

Jean-Michel ComtoisV.P. Marketing & SalesEsterline CMC Electronics

Romain TrappPresident & CEOEurocopter Canada Ltd.

Frank KarakasVice President, Airbus & BombardierGoodrich Landing Gear

Patrick DrohanSite Leader – Aerospace, AvionicsHoneywell Canada

Brad BournePresident & CEOFiran Technology Group

OAC Board of DirectorsBrian TeedPresidentMessier-Bugatti-Dowty Inc.

Linda RenePresident & CEOSafran Electronics Canada Inc.

Tom MelvinVice President, OperationsArnprior Aerospace

Larry FitzgeraldVice President & General ManagerCentra Industries Inc.

Eli BriglerPresidentCFN Precision Ltd.

Andrew SochajPresidentCyclone Manufacturing Ltd.

Ernie LynchPresidentLynch Dynamics

Val WilsonVice PresidentDishon Limited

George KoulakianVice PresidentKK Precision

Brad HartDivision ManagerMetal Improvement Company Inc.

Ted SquiresPresidentTFI Aerospace Corporation

Tony BurgessPresidentTDM Technical Services

Joseph YeremianPresidentThermodyne Engineering

SUSTAINING MEMBER

Tony LaMantiaAssistant Deputy Minister, Investment & Industry Division, Ontario Ministry of Economic Development, Trade & Employment

EX OFFICIO MEMBERS

André BernierSenior Director, Aerospace Aerospace, Defence and Marine BranchIndustry Canada

Rod Jones Executive Director, OAC

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Ontario Aerospace Industry

Clear for Take-off

October 2013

www.theOAC.ca

http://www.theoac.ca/