Captive Audience

Airbus Military’s trade media briefing 2012 reinforced brand recall

A FORCE Report

Madrid/Toulouse: Each year, since 2010, Airbus Military (AM) has been inviting about 60 journalists from across the globe for a two-day jamboree involving a smattering of briefings, facility visits, luxury hotels, fine wines and local cuisine. Often a few hours of sight-seeing is tossed in as well to ensure that the visiting hacks have a good time. This annual ritual is primed on building familiarity; same journalists are briefed by the same officials, though this year, Sevilla was ditched for Toulouse. Clearly, for AM, familiarity does not breed contempt; it cultivates brand recall and better understanding of its products.

While this maddening crowd is effectively managed by the professional team of Jaime Pérez-Guerra and Maggie Bergsma, the idea behind this distinctive mission is of Chairman and CEO AM, Domingo Ureňa-Raso, who started the custom of Trade Media Briefing (TMB) in 2010, the year following the creation of AM in April 2009 with the appointment of Domingo in February 2009.

So, what is the idea? Domingo believes that a customer needs to be familiar with a product before he decides to buy it. This is done in two ways: demo tours and visits to AM facilities. For example, AM’s latest A400M aircraft during 2012 have already flown to Chile, Peru, Bolivia, Malaysia, Indonesia, Thailand, France, UK, and Germany. Planned tours for the remaining year include Turkey, Spain, Saudi Arabia, UAE, Oman, Belgium and Algeria. The other part of the selling strategy is to get journalists over for annual updates in friendly climes. Slipped between products updates to invited journalists are visits to AM production facilities located essentially in Spain. Headquartered in Madrid, the company’s main sites are Getafe, close to Madrid, where civil Airbus A330 airframes are converted into Multi Role Tanker Transport (MRTT) aircraft, and Seville, where the San Pablo factory, south of the airport, hosts the A400M Final Assembly Line opened in 2007, as well as the complete production and final assembly of the C212, CN235 and C295. Toulouse in France is the A400M’s delivery centre.

Unlike TBM-10 and TBM-11, Domingo was not available for his concluding interaction after TBM-12 presentations were over. He was away for a good reason. Oman has ordered eight AM C295 aircraft and Domingo had gone for the contract-signing ceremony. However, he made good his absence by joining the journalists on the last TBM-12 dinner, and especially for FORCE, it was wonderful to have him sitting on the same table.

But before he sat down with a glass of wine, Domingo made a few interesting remarks from a raised platform overlooking the seating arrangement. AM, he said, puts in 10 per cent of its revenue into research and development (R&D), a must for any company to grow. However, given the grim economic situation, it appeared that cuts would be made in R&D budget. To offset this loss, Domingo has sought cooperation with other companies for marrying of capabilities. Case in point is the C295 AEW where AM has partnered with Elta of Israel for the full 360 degree coverage AESA-fast rotodome radar.

Domingo believes that challenges should not inhibit deliverables. As AM is answerable to its shareholders, ways had to be found to show results. This then is AM’s business strategy well imprinted on all presentations made by company’s senior staff during the two-day TBM-12 tour.

AM’s business strategy was articulated in the first TBM-12 presentation by senior vice president, commercial, Antonio Rodriques Barderan. “The customer wants more with less money,” he said. This implies he wants to be familiar with the product, wants a single platform to be multi-purpose, wants small life cycle costs, and wants support world-wide. AM’s business strategy with four discernible strands is built around these imperatives.

One, AM has recently opened commercial offices in Jakarta, Singapore, and Indonesia and is focussed on offsets or industrial alliances to be close to the customer. Two, it is converting its platforms for multi-tasking to meet varies requirements. For instance, military operations performed by various armed forces have increased over recent years to include global reach for operations in far flung places like Afghanistan (since 2001), Iraq (2003), Sudan (2009), and Libya (2011). Moreover, search and rescue missions have assumed priority, and so have numerous civilian and humanitarian missions like natural disasters, oil spills, drug traffic control, piracy attacks, and tracking immigrant movements. “All this means multi-tasking across military and civilian missions, and hence use of dual-technologies,” says Antonio. Added to this is the reality that except for specific countries and regions, shrinking military budgets are becoming a norm, making the military market for transport mission aircraft and tankers very irregular.

The third aspect of AM strategy is to show its products to the customer before attempting to put a price tag on it for selling them. The success of AM business acumen is seen in statistics. “Last year we sold only five aircraft, while this year till May we have already sold 24 planes,” Antonio said with satisfaction writ large on his face.

And the last, though important, aspect of AM strategy is to update engineering and technologies of its products. “This is driven by customer requirement and market needs,” added senior vice president, head of engineering, Miguel Angel Morell.

Dwelling on AM products, officials here say that Airbus Military is the only military and civic/humanitarian transport aircraft manufacturer to develop, produce, sell and support a comprehensive family of airlifters ranging from three to 45 tonnes of payload. AM is well-established in the world market with products operated by air forces for tactical and strategic transport and refuelling, as well as for all other kinds of civic missions for the benefit of society such as maritime surveillance and humanitarian aid.

AM’s highly versatile product range includes the robust and service proven, three to nine tonnes payload ‘Light & Medium’ family, comprising C212, CN235 and C295 ‘workhorses’; the all-new 37-tonne A400M designed for the needs of the 21st century; the A330 MRTT, the benchmark in multi role tanker transport aircraft; and further military derivatives based on Airbus commercial aircraft. An Airbus offspring, AM is the global leader in the market for military transport, tanker and surveillance aircraft able to perform the most varied missions. Altogether, AM has sold more than 1,000 aircraft to some 130 military, civilian and governmental customers. More than 800 of these aircraft have been delivered.

What about the Indian market? According to AM senior officials, India is one of the most important defence markets in the world and is of particular interest to AM because it has world-leading products that address specific needs of the country. The ongoing tanker competition is probably the one that will be decided first and AM is very hopeful that its A330 MRTT will be selected. This is the only new generation tanker/transport flying and certified today and AM thinks it is clearly the best solution for India.

However, AM feels that it is also well-placed to address other requirements. Thus it is energetically responding to India’s interest in a transport aircraft for the BSF for which the C295 is an outstanding candidate that is thoroughly proven in hot, high and austere operating environments. The maritime patrol versions of the C295, or alternatively the CN235, are suitable contenders to address the country’s MPA requirement. And eventually of course, although further in the future, AM believes the A400M can play a key role in the nation’s heavier transport force. It has been a challenge for AM to learn the process that the Indian government uses in issuing tenders and the management of procurement. But AM are now thoroughly immersed in the optimum ways of doing business with the Indian military.

What has greater scope of working in India, buyer-seller relationship or partnership? AM is very conscious of the need to provide fair offset arrangements in India and the desirability of working together to ensure that new aircraft types are thoroughly supported throughout their lives. According to AM officials, there is great potential for partnership because, on the one hand, India clearly has very advanced indigenous capabilities in aerospace and, on the other, as part of EADS, AM has a vast range of military and civil aerospace activity to provide high-quality offsets. So AM would always want to do business as partners in India.