Tag Archives: Aerospace & Defence

Aerospace, a high-tech sector in Spain

Two years ago, there was a televised debate prior to the general elections in Spain. I remember I was watching it with friends and the incumbent president said “Spain is the leader country in the technology of air refuelling aircraft”. Since those friends watching the debate with me and I work in the aerospace sector we appreciated the comment.

Many things have happened since them, but one has not changed: aerospace sector is one of the most technologically intense in Spain.

For this post I am using mainly two sources: 2008 annual report from ATECMA (Asociación Española de Constructores de Material Aeroespacial, now replaced by TEDAEAsociación Española de Tecnologías de Defensa, Aeronáutica y Espacio; 2009 report is being cooked) and 2009 report from COTEC (a foundation for technological innovation, “Informe Cotec 2009“).

I already mentioned in a previous post the size of aerospace sector in Spain: 5,577M€ revenues in 2008. In the last 10 years aerospace revenues in Spain have trebled. In 2008 Spanish GDP was about 1,088 bn€, so aerospace sector weighed 0.51% of Spanish economy.

Aerospace sector revenues and R&D evolution.

Regarding the employment, there were 36.160 employees of which over 15,000 were graduates, engineers and managers; 41% of the workforce consists of highly qualified employees. The employment of the sector has been doubled in the last 10 years.

Aerospace sector has presence in 16 regions, with the highest contribution from Madrid (63% of revenues and 57% of employment).

Aerospace sector revenues and employment per region.

There were 335 companies: 6 employing over 1,000 workers and 318 SMEs.

The sector had a positive trade balance of 3.6bn€ (while Spain has a large negative trade balance, of about 100bn$ prior to the crisis, now around 70bn$, 4.5% of GDP).

Aerospace industry is a dual industry: companies involved in it develop both civil and military products. The weight of each depends on the different years, but on average Spanish aerospace industry is 60% civil and 40% military.

After this brief description of some facts (see ATECMA report for a more detailed view of the sector), I want to remark the technological intensity of the sector.

Aerospace sector invests about 10-15% of its revenues in R&D. This is by itself an impressive, figure: Spanish economy as a whole invested in 2007 1.27% in R&D, thus aerospace invests 10 times as much as the economy average. If we said that the weight of the sector was 0.51% of Spanish economy, the aerospace R&D represents 5% of national R&D investments. Even more, if we only count R&D executed by companies, aerospace R&D contributed with 8.5% of total private R&D.

I included in this post the report from COTEC because it makes a distinction among the different sectors dedicated to technology in Spain: manufacturing vs. services, and high technology vs. medium-high. It uses categories derived from INE (Instituto Nacional de Estadística), and there we see 6 sectors classified as “High Technology Manufacturing Sectors”:

  • Pharma
  • Office material and computers equipment
  • Electronics components
  • Radio, TV and communication devices
  • Medical, precision, optics devices and watches
  • Aerospace

R&D investments of high-technology sectors.

Combining the data from this report with data from ATECMA (using 2007 figures for comparison with COTEC), we reach the following findings:

  • Aerospace sector revenues represented 15% of high-tech manufacturing sectors.
  • High-tech manufacturing sectors invested 1.3bn€ in R&D in 2007, this is 4.5% of their revenues, or 10% of total R&D in Spain.
  • Aerospace sector R&D represented 49% of high-tech manufacturing sectors R&D (!).

Indeed, it seems a high-tech sector.

If you wish to compare Spanish A&D with other European countries, please see the ASD reports (AeroSpace and Defence Industries Association of Europe).

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Go and get married…

Tomorrow I will be attending the birthday party of a friend who is getting married this year. In that party there will be another friends who will be getting married as well this year. I have yet other friends getting married this year as well. First thought: “Javier, you are in the age where most of those around you get marry…”.

Second thought: weddings cost money, lots of money. And they do not only cost money but produce many exchanges of cash from one side to another: Buying dresses, rental of suits, nuptial cakes, rental of luxury cars, hotel rooms and saloon, expensive menus, free drinks, buses back and forth for the invitees, professional photographers, flowers, hundreds of haircuts, long lists of gifts from El Corte Ingles, honey moon trip to Bali, musicians (with the corresponding cannon to SGAE, it couldn’t be otherwise…), a voluntary donation to the church…

The Federación de Usuarios-Consumidores Independientes (FUCI) releases every year a study of the cost of a wedding per region and how much each item is costing. The latest study dates back from 2009.

From the study we learn that in 2009 a wedding cost around 18,380 euros on average. They were most expensive in Madrid, and the average cost had decreased 11% from 2008.

The study takes into account the expenses incurred by the ones organising the wedding. Can we assume that those attending it will incur in as many costs in gifts, haircuts, cleaning of suits, hotel rooms, transport, etc…? (This hypothesis comes from the not written rule which states that presents should aim to account at least for the same value of the menu which is ~50% of the cost incurred by spouses-to-be, the main assumption is in the other costs incurred by invitees -transport, hotel…). If so, let’s settle the turnover of a wedding in 35,000 euros.

How many people do get married in Spain in a year? From 2006 to 2008 the average was 204,000 weddings, with a slight decrease of 3.4% from 2007 to 2008.

Now the math is already there: this industry generated in 2008 around 7,000 million euros. Is this much? The same year aerospace industry in Spain had a consolidated turnover of 5,577 million euros. So the wedding sector weighs 25% more than the aerospace sector in Spain or around 0.7% of Spanish GDP (let me not enter in this post in the discussion of the value added of the sector… I still want to get invited to those weddings).

In line with the recent campaign “esto solo lo arreglamos entre todos”, my contribution: please encourage marriages and do get married!

I have a good friend who used to be quite against marriage. I hope this may help turning his opinion.

Aerospace and Weddings, value-adding and value-requiring sectors.


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Augustine’s Laws

Last summer I read a book, a classic: “Augustine’s Laws” by Norman Augustine. Norman served in many positions both in the Administration (Under Secretary of the Army) and in the Aerospace & Defence industry (CEO of Lockheed Martin). Lately he lead the Committee that was reviewing the US Human Space Flight Plans.

I first learnt about this book from a teacher in Seville in 2006. He used a couple of his graphics in the course. One was plotting the trend of fighter aircraft acquisition costs per unit. I remember that the extrapolation of the trend pointed that somewhere in 2054 the whole DoD budget would allow to procure one single aircraft, that would have to be shared by US Air Force and Navy, with the 29th February of the leap years availabe for the US Marines.

Since that moment I wanted to read it, and it was only 3 years later that I had the opportunity to do so. The book reviews A&D programs, especially their mismanagement and failures from the Wright brothers times till the early 80’s, when the book was written. The book is hilarious. Really. Let me show you this by concatenating some of its “findings”:

  • The first one was commented above: aircraft are more and more costly with time.
  • At the same time aircraft developments turn in aircraft always becoming heavier than initially designed, producing more capable and heavier aircraft.
  • Another trend points out that avionics and electronic components are of greater importance in the aircraft of today. Wright brothers didn’t make use of avionics or electronics, however in the 80’s the percentage of OEW dedicated to them was around 20%, and increasing.
  • We also find that electronic components themselves become smaller and cheaper with time (just think of room-size computers of decades ago compared to today’s smart phones).

Thus we find ourselves in front of a paradox: Aircraft that will be heavier and more expensive, but that a certain point will be entirely made of avionics and electronic components which are lighter and cheaper with time! How can this be? As Augustine points out: engineers came to the rescue, they came up with “something” that it’s very expensive, doesn’t add weight and helps to solve the paradox without violating 2nd law of Thermodynamics. They came up with software. Neverending of lines of software… which also contribute to delay developments.

Here you may read the different laws, I’ll just copy the ones I like the most:

  • Law Number V: One-tenth of the participants produce over one-third of the output. Increasing the number of participants merely reduces the average output.
  • Law Number VII: Decreased business base increases overhead. So does increased business base.
  • Law Number XIII: There are many highly successful businesses in the United States. There are also many highly paid executives. The policy is not to intermingle the two.
  • Law Number XXVI: If a sufficient number of management layers are superimposed on each other, it can be assured that disaster is not left to chance.
  • Law Number XXXII: Hiring consultants to conduct studies can be an excellent means of turning problems into gold, your problems into their gold.
  • Law Number XXXVII: Ninety percent of the time things will turn out worse than you expect. The other 10 percent of the time you had no right to expect so much.
  • Law Number XLIV: Aircraft flight in the 21st century will always be in a westerly direction, preferably supersonic, crossing time zones to provide the additional hours needed to fix the broken electronics.
  • Law Number LI: By the time of the United States Tricentennial, there will be more government workers than there are workers.

Clearly this is not something I learnt today, but then, last summer I didn’t have a blog to comment on this. Enjoy the book.


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I wanted to start the blog with some introduction of myself… but I did not feel like preparing a piece for this purpose. Then I thought: “I could use the icebreaker speech I gave in Toastmasters when I joined”… this was a better idea. Since this not only introduced myself but started creating topics for next posts, e.g. what is Toastmasters? Speeches?…

The only objection: I went through that speech and I don’t like it much anymore, nevertheless I came to see again another speech, which even though hasn’t been the best one ever since, it talks about some of the things I like the most: a bit of aircraft, another bit of travelling and some numbers here and there. Since that is what this blog will mostly talk about in the future… here it goes that speech (given on May 7th 2008):

“May 2nd is a very important day for Madrid. It is the day of the uprising. The day, in which the people of Madrid rebelled against the occupation of the French troops. A day that changed our history.

I will talk about another 2nd of May that changed our history as well. The 2nd of May of year 1952. That day took place the first commercial flight of a jet plane, the De Havilland Comet.

In this speech I will talk about that flight, about how it changed the history and I will finish explaining one of the Comet’s biggest contributions to engineering which at the same time caused the very end of the aircraft.

BOAC’s De Havilland Comet

That first flight departed from London to Johannesburg and was operated by BOAC, British Overseas Airways Corporation, one of the companies that later merged in today’s British Airways.

BOAC used a configuration of 36 seats (a luxurious configuration for the size of the aircraft). The galley could serve hot and cold food and there was even a bar. There were separate men’s and women’s washrooms. The passenger cabin was quieter than those of propeller-driven planes.

Many people thought jet engines wouldn’t be economically viable on a commercial plane since jets had higher fuel consumption. However the Comet was able to fly at an altitude of 35,000 feet where the air is less turbulent. The Comet was smoother and faster. Hours were cut off in flights. New York was only twelve hours flying time away from London instead of the eighteen hours it took piston-engine planes.

Now let’s see how it changed the history by comparing some differences from that first flight to commercial aviation today!

  • It took only 3 years from the first design work till the first flight of the Comet; it took about 14 years for the A380.
  • The Comet could take 36 persons to a distance of 2,700 kilometres, compared to the more than 800 passengers in a 3-class configuration to 15,000 km of the A380.
  •  If we take a look at that first flight, London – Johannesburg, it took more than 23 hours!! With 5 stops in between (Rome, Beirut, Khartoum…) like a frog jumping from one water lily to the other. Now, the same company, British Airways, operates the flight with a B-747 and takes less than 12 hours (half the time) in a non-stop flight!!
  • A ticket in that first flight cost 175 pounds, while a ticket for tomorrow’s flight in the afternoon would cost you 240 pounds taxes included! That could seem just a bit more expensive, but in fact if we discount the effect of the inflation throughout the 50 years now it is about 4 times cheaper!
  • The Comet needed a crew of four men: including two pilots, a flight engineer, and a navigator. Nowadays planes need only 2 pilots… if any.
  • 114 aircraft of the different models of Comet were produced compared to the more than 5,200 Boeing 737 built to date plus the 1,500 in waiting list.
  • The estimated price of a Comet 1 was a quarter million pounds, while the B-747 costs 120 million pounds (hundred times more expensive after discounting the effect of inflation).

Only a year after it began commercial service, Comets started to fall out of the sky. Thirteen aircraft were lost in fatal accidents with hundreds of victims. Extensive investigation revealed a devastating design flaw – metal fatigue. This problem had never been encountered in aviation.

The constant stress of pressurization weakened an area of the fuselage in the corner of the windows. All Comets were grounded until the jets could be redesigned. This was a tragic but great contribution of the Comet to aeronautical engineering.

The Comet re-entered commercial service in 1958, but its reputation was forever damaged. The Comet 1 disasters contributed to archrival Boeing’s domination of the jetliner market.

2nd of May. A special day both in the History of Madrid and in the History of commercial aviation. A day that changed the lives of madrileños in a good way. The uprising in Madrid and the Comet’s first commercial flight.”

May this serve as introduction.


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