Made in Czech Republic: domestic companies are unlocking doors on foreign markets

Date 31.8.2021

What do cargo aircraft, air surveillance, and regional airports have in common? Solutions in the form of Made in the Czech Republic. Even though the aerospace industry’s share in the Czech Republic’s total exports is less than 1%, it remains an indisputable fact that the domestic aerospace sector has long been focused on foreign markets and most domestic production is exported. Setting aside 2020, which would offer misleading data distorted by the unprecedented situation in the segment, 2019 was characterized by a significant increase in exports compared to the preceding year, with a total volume of CZK 16.5 billion (approximately EUR 646 million). Established markets such as Germany, France, Russia, the United States, and Great Britain were the leading destinations for the sector’s exports. Though the list of territories is partially variable, reflecting long-term orders and their fulfillment, the above-mentioned group of countries has long corresponded to the characteristics of the domestic segment. In recent years, however, it has been impossible not to notice that dynamically developing regions have come to the fore. The opportunities found in those regions send a clear signal that it is in the interest of domestic entities to start familiarising themselves with those markets. The good news is that the Czech Republic is on the right track.

The open nature of the domestic industry
With respect to the export-focused nature of the domestic sector, consideration of new markets understandably raises primary interest in the development of business opportunities, as well as, for example, diversification of partial territorial dependence. Czech entities are looking at a broad range of world regions, though a full spectrum of factors is often decisive with respect to those regions. These factors include standard viewpoints in the form of data-based assumptions about the growth of the segment in the given territory, the presence of competing entities and the given product’s potential in the territory, as well as geographical suitability with all its specificities. The portfolio of offered solutions thus may differ in the case of a coastal Southeast Asian country and a landlocked African country. Of no less importance, it is obviously necessary to take into consideration the prevailing model, which is characterized by the export of subassemblies to European Union countries and the export of finished products outside this market of 450 million people.

In general, however, the Czech Republic is accustomed to foreign activities and frequent business missions involving representatives of the government and associations, as well as national stands at leading industry events. Beyond these structures, companies individually build up their presence on markets through their sales representatives and with support from Czech embassies and consulates.

Global reach
It is perhaps not necessary to describe the global position of Czech ultralight and light-sport aircraft, yet the extent of their representation on foreign markets continues to astonish. The Moravian company Czech Aircraft Group has already delivered more than 300 of its aircraft to US customers and it thus ranks among the leading representatives of the segment in the United States. Located only a few kilometers away in Moravia, Evektor has delivered well over 100 aircraft to the US market. Another Moravian company, ZLIN Aircraft, is active in Latin America, with approximately 100 of its aircraft crossing the skies above Mexico, Peru, Bolivia, and Argentina. These aircraft are used in a number of applications ranging from flight schools to aerobatic training, as well as military and maritime aviation. The requirement for the ability to operate without problems in the region’s difficult climatic conditions is fulfilled without reservations.

Aircraft Industries, the manufacturer of the twin-engine L-410 regional and cargo aircraft, knows about operating in harsh environments and is able to meet the needs of customers even in territories where the climate can be a real challenge. The L-410, especially the latest NG (New Generation) model, is capable of short taking-offs and landings (STOL) on unpaved runways and is not hindered by extreme temperatures in the range -50°C to +50°C, and operating at high altitudes is a routine matter. Satisfied customers in Kazakhstan, Brazil, Russia, and Nepal are well aware of the aircraft’s capabilities, which makes the L-410 a perfect choice for covering considerable distances between regions and areas with poor accessibility, as well as for other applications.
With a growing population, rising purchasing power, and interest in developing trade, certain needs arise for which it is necessary to have the proper infrastructure. Transcon Electronic Systems is helping to fulfill these needs by, among other things, supplying so-called modular airports. The company has already gained positive references on the dynamically developing African continent in Libya, Egypt, South Africa, and, currently, Senegal.
When it comes to providing for the needs of air forces, the Czech Republic would certainly have something to say on this topic as well. Aero Vodochody’s presence on multiple continents dates back several decades and with its latest product, the L-39NG jet trainer and light combat aircraft, it again aspires to boldly assert itself abroad. The delivery of 12 aircraft to Vietnam has been agreed and a number of other foreign markets are currently the subject of discussion.

 

L 410 NG

LIAZ, which is gaining markets with its UAV helicopter, can also contribute to improving security. With more than 20 types of payloads, the helicopter can handle complex tasks ranging from agriculture to rescue missions and is finding uses in both the civilian and military sectors. The product has been successful especially in Asia, South America, and Africa, with several delivery contracts concluded in Africa in 2021.
PBS Velká Bíteš, a manufacturer of aircraft engines, auxiliary power units, and environmental control systems, which is present on the large American and Indian markets through its subsidiaries PBS Aerospace and PBS India, is a shining example of success in the face of strong foreign competition. The company’s success in the Czech Exporter of the Year competition is an indication of its qualities.

Skyspotter

Skyspotter

New markets on the horizon
Aviation knows no boundaries and it is difficult to find many areas that are not touched by this segment. From the perspective of Czech companies, it is obvious that there are more markets to conquer beyond those already mentioned above. The rapidly growing region of Southeast Asia, driven particularly by Indonesia, Malaysia, Thailand, Vietnam, and the Philippines, has not escaped attention, as long-term growth of air transport and related fields is predicted there despite the current situation. Czech capabilities can address the need to connect poorly accessible areas, control borders in a volatile international political environment, and develop local airport infrastructure to accommodate the growth of trade and tourism.
Similarly, it is necessary to understand the importance of the previously mentioned Indian market, as well as Mexico, which is registering strong market growth and is striving to become one of the world’s top ten largest producers in the foreseeable future. Outside the European and North American markets, it remains a positive fact that Czech entities are increasingly setting their sights on the former Soviet republics, China, and the Middle East.

Toward cooperation

The purpose of the brief outline of the examples provided above is to highlight the identification of the intersecting interests and needs of the given regions on the one hand and the domestic production portfolio on the other hand. The Czech Republic is open to new business opportunities and the domestic representatives of the given sector are aware of the challenges that come with every territory. CzechInvest is prepared to support these entities and will continue to develop pro-export activities and their interests in cooperation with ministries, clusters, and representatives of other institutions. The Made in Czech Republic brand will be a significant driving force in this endeavor.

Text by:  Michal Janečka, Specialist for Aerospace and Defence, CzechInvest
Photos by: Aircraft Industries, a.s., LIAZ a.s.

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