The premier Trade Organisation advancing UK AeroSpace , Defence and Security Industries globally

1. The MRO Sector in the UK and prospective areas for collaboration The premier Trade Organisation advancing UK AeroSpace, Defence and Security Industries globally Alan FisherA|D|SUK Membership, International Sales and Networking Support11 February 2010

2. About A|D|S ADS Group Limited (A|D|S) is the trade organisation advancing UK AeroSpace, Defence and Security industries, with Farnborough International Limited as a wholly-owned subsidiary. A|D|S also encompasses the British Aviation Group (BAG).

3. The premier Trade Organisation advancing AeroSpace, Defence and Security industries globally The A|D|S industry sectors are Europe’s number one and are second only to the US globally. We employ around 500,000 people across the UK and generate around £60 billion per year to the UK economy and £25 billion in exports. Our industry will help re-balance the economy away from its dependence on financial services to deliver a more sustainable future for Britain. Our industries offer an exciting future for the UK’s bright young minds and for the economy as a whole as we spearhead the recovery from the recession. Whether it be creating new technologies to support our armed forces and security authorities to keep us safe or delivering innovation to reduce still further the emissions from aircraft and support everyday activities or disaster relief from space.

4. Civil Aerospace Aerospace is an attractive growth sector in which the UK can continue its winning ways.

5. Defence The UK defence industry represents ten per cent of the UK manufacturing, is number one in Europe and second only to the US globally, employing over 300,000 people and generating over £35 billion per year to the UK economy.

6. Security The UK security industry comprises 8,000 companies and ‘UK Security’ employs around 6,000 people.

7. Space The space sector in the UK grew 9 per cent per annum between 1999 and 2007 and it is likely to grow from £6bn in 2008 to £40bn by 2030.

8. A|D|S and the SME community A|D|S has produced two documents outlining what A|D|S can do for SME’s and our priorities for Government Delivering the SME promise • A|D|S represents over 800 SME Members throughout the UK in the Aerospace, Defence, Space and Security environment. • A|D|S has strengthened its position in how it serves this diverse community best and how it intends to enhance services so that A|D|S can live up to its commitment to address the challenges facing the SME industry, and provide effective solutions.

9. International Footprint The international scope of A|D|S reaches beyond the existence of A|D|S offices in countries outside of the UK. Through memorandums of understanding with National Trade Associations and located representatives we are able to have close working relationships with many international markets.

10. International Office MOU with National Trade Association Representative Developing Country relationships International Footprint

11. In country support - Toulouse Aims and Objectives To facilitate business development opportunities through value-added services to meet individual company objectives. To provide representative facilities in Toulouse with a view to generating market access opportunities for business development activities.

12. In country support - India • Purpose: • Setting up your company’s operations in country • Building a distribution channel • Identification of potential customers and partners • Due diligence activities • Dissemination of market intelligence and opportunities • Promotion of products and services • Raising profile of your company at trade shows, conferences, seminars, through publications, media • Expansion of your reach globally • Ensuring your company’s voice reaches the target audience, both at international forums as well as individual organizations

13. Farnborough International Ltd Farnborough International Ltd (FIL) is a subsidiary company of A│D│S, the trade organisation advancing UK AeroSpace, Defence and Security industries. FIL has a three-strand business as the organiser of the biennial Farnborough International Airshow (FIA), operator of Farnborough International Venue and Events (FIVE), and as international consultants for civil, defence and business aviation events including Bahrain International Airshow 2010 (BIAS) and India Aviation 2010.

14. The Future of UK Aerospace Maintenance, Repair, Overhaul and Logistics (MRO&L)

15. Introduction to the Sector Vibrant and dynamic component of the overall UK aerospace industry. Critical capabilities in aircraft maintenance, aero engine and component repair and overhaul Operational and logistics support enabling safe efficient aircraft operations in both civil and military environments. Provides profitable, long-term business growth.

16. Size of the Sector Global Annual turnover is $120bn In the UK alone: Annual turnover in excess of $10bn representing an 8% share of Global Market 30% of UK Aerospace Revenues Over 450 companies operate in this Sector in the UK Over 30,000 people employed

17. Global breakdown of Revenues Line maintenance $40bn Engine overhaul $26bn Airframe related $25bn Component Overhaul & Repair $22bn

18. Sustainability of the MRO&L Sector Whilst the air transport MRO&L sector did decline in 2009 due to the recession, the recovery is expected to drive a long-term global growth of 3.2% per annum (in constant 2009 $). In military MRO&L, despite the slow decline in the fleets, the continued retention of older aircraft and the increasing cost of keeping these aircraft flying means a small positive growth is expected.

19. The UK and the MRO&L Sector The UK plays a significant role in the global MRO&L market and the sector represents a significant component of the overall UK aerospace industry. Sustaining and improving the competitiveness of this sector remains highly desirable. There are a number of major trends changing the dynamics of the MRO&L business.

20. Market Trends, Opportunities and Challenges Supply Chain Globalisation Technology Developments Increased Outsourcing Service Orientation

21. The Indian Civil Aviation Market Indian economy growing at the rate 8.5% per annum. Aviation market to grow at the rate 25% per annum. India will become one of the top 5 civil aviation markets in the world. Present ranking is 9th.. India has 454 airports and airstrips - 16 are international airports.

22. Indian Market Growth Potential Investment opportunities in civil aviation by 2020 estimated us dollars 110billion Approximately $80 - $90 billions in aircraft procurements and $20 billions in airport infrastructure. (source; Investment Commission of India) Boeing and Airbus Industrie both forecast that approximately 1100 aircraft will be procured by India by 2025 Passenger growth 18.7% per year - in 2010 passengers flown were 520 million.

23. Indian MRO&L Market Global growth rate 4% per annum by 2020 global MRO market $65 billions . India’s MRO market $1.17 billion in 2010. Projected to grow to $2.6 billion per year by 2020.

24. Indian Infrastructure Today Air India at Mumbai and Delhi. Jet Airways at Mumbai. Small aircraft and helicopters Air Works Mumbai. Indemar for small engines and systems. ‘C’ checks for single aisle aircraft at HAL Bangalore. Max Aerospace Mumbai aircraft systems and avionics.

25. Proposed MRO Projects Boeing $100 million at Nagpur. EADS JV with NACIL at Delhi. EADS will invest $40 million in an Airbus aircraft facility JV between Malaysian Airline (MAS) and GMR Hyderabad International Airport Limited (GHIAL). To be known as Hyderabad Aircraft Maintenance Company (HAMCO). This will be involved in aircraft maintenance for commercial aircraft, avionics, electrical wiring, including simulation

26. Opportunities for UK/India Collaboration MRO being a support industry to aviation industry as a whole, will grow steadily with the growth in passenger and cargo traffic Increasing number of new aircraft requiring support The MRO infrastructure has to grow at speed to match these market conditions This is in the area of all support fields i.e. airframe, aero-engines, avionics, accessories, systems, etc India therefore has the great potential to become global MRO hub strategic location labour cost competiveness availability of pool of talents. There are Challenges though indirect taxes customs duty service tax etc.

27. Conclusion Vibrant and dynamic component of the overall Aerospace industry Indian economy growing at the rate 8.5% per annum India’s MRO&L market projected to grow to $2.6 billion per year by 2020 The UK plays a significant role in the global MRO&L market A|D|S committed to the Indian Market, offices in: Bangalore Delhi Willing to work closely with the Indian Government and Industrial Organisations to address the challenges that exist today

28. Questions?