Alp Aviation : A team player of Global Giants

Mr. Erçelik, first of all could you inform us about Alp Aviation’s general structure, vi

Tarih: Issue 15 - April 2009

Alp Aviation has represented a very good example of private sector initiative in Turkey as well as the possibility of a success story out of JV business model in Turkey between a local player and the international OEM, Sikorsky.

Today, we provide a direct employment to around 300 people, all Turkish nationals. We expect this number go substantially higher by the end of 2009 and continue increasing in the years to come.

What you would see in Alp Aviation today, beyond the members of this young, energetic and well-educated team are ; extraordinary engineering skills, about 80 machine tools, dozens of in-house special processes and coatings, excellent quality and inspection infrastructure, modern facilities of 13.500 m², a reserve land of 36.000 m² owned for future expansion, a State - Of -The - Art ERP System, niche capabilities such as deep hole drilling, spline, metal-to-metal bonding, blue etching and ECI, HVOF coating, high strenght steel heat treatment, titanium anodizing etc.

Our strong engineering team is responsible with defining the process plans, frozen planning activities, fixture design, composition of operation sheets and CNC programs, development of DFM studies, prototyping and FAI activities.

Alp has machining experience for most aviation alloys, with particular experience in titanium machining, we’re the biggest titanium machining house in Turkey with a wide range of in-house special process and test infrastructure. Sheet metal production and mechanical assembly/test infrastructure is quite impressive. Alp has an effective logistic management for worldwide material procurement, transportation management, delivery to customer based on customer preference.

2- How important have been the offsets in Alp Aviation’s performance ?

Offset is a good start and a leverage for access to new markets, and customers, particularly to the OEMs, as access to those is quite hard due to protectionism and costly/time consuming qualification/legal procedures. Unless offsets were required, Alp may not be standing here the way we are now. However; a long term relationship requires much more. This is like an arranged marriage, with a hope that the couple develops love and strong bond. Offset should not remain as the primary reason for an OEM to work with a local partner. A good test is whether the local organisation is able to create non-offset business over the time. Sikorsky offset packages initially involved with easier to absorb work, however, the great team at Alp soon deserved much more. Now, Alp is the second largest and the only non-US source for flight safety parts and assemblies for Sikorsky. Alp is expected to become the largest global source for flight safety products for Sikorsky around 2011. Today, JV partner Sikorsky is the largest customer of ALP, however, as a good JV partner, Sikorsky supports Alp’s cooperation with other aerospace OEMs, as the purpose is to make the JV company a global player and an international center of excellence for the type of products Alp specializes on. Alp is also a good example of the fact that “there is life after offsets”. Alp now wins international free bids in several commercial and military programs. JSF is a very good example. The potential value of JSF awards is close to US$ 1 billion, while Alp set a goal of U$ 2 billion in this program. Alp partners TAI in KT-1 program in which horizontal stabilizer, rudder and elevator sections will be manufactured and delivered by Alp. TAI made selection based on competency and cost. Alp is the only non-US partner of Goodrich in F22, a totally US program with no offset dimension at all. Alp has new international customers with substantial business potential, buying from Turkey for the first time. without having any offset obligations at all. Alp is prepared for playing a sizeable role in the upcoming TSK (Utility Helicopter) program, with a product line to include the full transmission system and rotor hub assembly as a result of the technology and experience accumulation at Alp Aviation. Alp Aviation experience shows that offsets may leverage companies with a long term visions, productivity / innovation focus and professional management, to totally new platforms and do not necessarily promote inefficiencies. SSM deserves the credit for this.

3- How has the export performance been?

Our 2009 and 2010 exports shall reach to US$40 M and US$ 62 M respectively, with a very rapid growth thereafter based on existing awards and LTAs. Another jump in export will come when JSF program will reach high level production in 2014. Our minimum target based on existing awards is an export volume of US$100 M by 2015, whch should be even higger consdiering new programs such as Turkish UHP / Sikorsky IBH etc.

4- What are the capabilities, products, customers and technological competences of Alp Aviation?

Rotary wing dynamic components, rotor parts, swash plates and bifilars, spindle nuts and screws, horns, servo beam assemblies, tail rotor drive shafts, flight control assemblies, vibration absorbation system compose the major portion of Alp’s current output, representing a rare global capability. As part of TSK (Utility Helicopter) program, Alp plans to expand product line towards transmission system integration and other dynamic assemblies such as entire gears and gear box assemblies, rotor hub, Spindle Assy, QCA etc. These are traditionally kept within the OEM due to the level of technology and size of business, however, Sikorsky is planning this technology transfer to Alp this time, so we’re very excited.

Alp additionally specializes on landing gear subassemblies for the fxed wing aircraft and the production of engine rotating and structure parts and accessories that require close tolerances as well as unique process and test capabilities.

Sikorsky Aircraft, Pratt & Whitney, Goodrich Landing Gears, Pratt & Whitney Canada, TAI, Lockheed Martin Aero is among the direct customers and Alp supports the following platforms and programs; Sikorsky’s Black Hawk & Seahawk, S-92, S-76 & CH-53, F-35 Lightning II Joint Strike Fighter, F-22 Raptor, Boeing 737, Boeing 787 Dreamliner, Airbus A380, Airbus A320, KT-1T, Pratt & Whithey F135 & F100, PW 150, PW305, PW530, PW535 & PW545.

Alp’s quality system is in accordance with the requirements of the global aerospace industry as reflected in the highest level qualifications Alp Aviation has. These include AS EN 9100, Sikorsky Flight Safety Parts Manufacturing License as the only non-US source for these Flight Safety Parts, ASQR-01 and NADCAP.

5- ALP Aviation exported the first rotating component for F135 engine in JSF the program. Could you please explain us about your activities within the scope of JSF project?

Alp Aviation is an active and major member of the JSF Turkish Industry Group, with a targeted sales volume of about US$2 billion over the project life.

Alp Aviation began to produce Landing gear parts for F35 (JSF) for the Goodrich Landing Gear. The first JSF flight carried 40+ Alp made parts and subassemblies in its landing gears. Complexity and quantity of parts and subassemblies are increasing constantly in parallel to the investments in capacity and capability. Drag Brace Assemblies, 300M Steel/ Aermet 100 subassemblies are currently in production.

Alp Aviation supplies rotating hardware to Pratt&Whitney in her F135 and F100 programs. The FAI delivery of F135 Fan Rotor Rear Hub is successfully done in 2008. A couple of other FAI work will also be delivered in 2009. Alp Aviation and Pratt&Whitney are going to sign an LoI to develop Alp, as the major source for the F135 Fan Rotors, the titanium IBRs, representing the most modern technology.

Alp has received the first PO from Lockheed Martin Aero in F35 JSF program, while we’re in talks with the existing customers as well as a few new partners in the said program.

6- ALP Aviation will manufacture the “Tail Assembly” for KT-1T Training Aircraft manufactured by TUSAS. Could you please inform us the recent situation of this project and the other projects carried by Alp Aviation with TUSAS?

Alp Aviation partners TUSAS in KT-1 program in which horizontal stabilizer, rudder and elevator sections will be manufactured, aasembled and delivered by Alp Aviation. Engineering and FAI activity is going very smoothly so we expect to deliver the the first assembly to TUSAS in July 2009 as planned.

We’re also routinly supporting Boeing and Sikrosky programs of TUSAS with our finished components, empennage fittings etc.

Alp Aviation partners Sikorsky as the potential supplier to TUSAS in the Turkish General Utility Helicopter Program of the transmission and rotor system, in addition to our existing product line, in attempt to make Alp and thus Turkey a center of excellence for these critical rotary wing technologies This will help Turkey become practically self-sufficient especially in Black Hawk and generally in medium lift helicopter requirements. Alp Aviation’s specialization particularly on helicopter dynamic components and transmission system will give full support to TUSAS in meeting locally, the challenging requirements of Turkish Armed Forces, developing new platforms, thus contributing to the technological and competitive race with the rest of the world.

7- Are you planning outsourcing work to Turkish industry in general and SMEs in particular?

Turkish Aerospace environment is currently concentrated around a few larger players, with quite limited outsourcing activity, particularly to SMEs. This increases the risks associated with growth management, causes poor use of existing national resources, unfavorably affects the local content, while decreasing profitability, competitiveness and sectoral capacity use, thus the use of SMEs more effectively is the cure. SMEs may not be directly eligible for doing business with the OEMs and first tiers, however, they still can and should play a major role in our industry.

Alp Aviation is currently developing with OEMs, potential offset programs with extensive use of SMEs while intensifying the outsourcing efforts towards the Turkish Industry since 2007.

Several tooling shops, special process houses, engineering companies, machining shops and other services companies are identified and qualification/MLA arrangements mostly in place. More companies are being added on a constant basis. All of these are SMEs.

Additionally, Alp has been developing local contractors for machinery/equipment requirements. Alp helped the design, funding and manufacture of several such capital goods in Turkey. Almost all special process lines are designed and manufactured in Turkey, by those companies who now serve the Aerospace World after this first experience with Alp Aviation.

8- Would you like to add any other comments?

I would like to mention our sincere apprecation of the support and guidance of the Turkish Armed Forces, SSM, and TUSAS. Without their encouragement and industiralization policies, our success and growth would not have been possible. Our great team as well as Sikorsky have also been key to this success.

Thank you very much for this opportunity to reach out your readers as well.