After renegotiating the problematic contract that kept Denel Aerostructures (DAe) in the red for years, Airbus is now looking to help the aeronautics division of arms parastatal Denel develop capabilities and bid for the manufacture of commercial aircraft.

The European aircraft maker said it had begun working with Denel to involve DAe beyond its existing contract for the Airbus A400M military plane.

Airbus vice-president for international co-operation Simon Ward said because the A400M was designed in the same way as commercial aircrafts, DAe could easily switch to design components for commercial planes like the A330 and A350 ranges.

“We are working with them to move to more than just the A400M. We will help them beef up some of the technology they have. And the jobs that this will create are very different, they are highly skilled,” Ward said.

The components that DAe is contracted to manufacture for the A400M form one of the most complex and critical parts of the project. They include the fuselage top shell, wing fuselage fairings and tail fin sword and ribs. When the two companies first agreed to co-operate on the manufacture of the A400M, one of the terms was that the SA Air Force would buy a certain number of these military transport planes.

However, when the Department of Defence pulled the plug on its order, Airbus did not cancel the contract. DAe did incur losses of millions of rand when the delivery of the A400M was delayed because of the terms of that initial contract.

Ward said Airbus had since renegotiated this contract with DAe after it was put out to an international bid. Airbus put the contract to an international tender again when Denel went back for the contract value to be increased due to the complexity of the components it had to manufacture.

DAe won the package again because of its lower overall component acquisition costs and its manufacturing capability for these components.

Ward said Airbus’s contracts with the Denel group now amounted to about $40 million (R416.5m) a year based on their current co-operation programmes and he expected this to increase to at least $80m annually by 2020.

But he said while Denel’s technology used on the A400M served a niche market, the company needed to develop markets beyond this contract as the South African firm could not depend on being a low-cost supplier for long.

“There is still a lot of work to do with Denel to get them down to the commercial line like Aerosud but we want to get them there,” Ward said.

Aerosud is one of two local private sector suppliers of components for Airbus aircraft. The other is Cobham Advanced Technologies. The two companies also supply some components for the A400M, including the cabin furnishing structures and satellite communications antennae.

Aerosud has now developed its own aeroplane and Ward said the first flight would probably take off in early July.

Airbus was also working with local academic and research institutions like the CSIR, as well as petrochemical giant Sasol and universities, to “turn pipeline dreams to technical possibilities” even though Ward said it would still take a lot of work to get these concepts to commercial viability. – Londiwe Buthelezi