Powerhouse Industry

The vibrant Quebec aerospace sector pulls in annual sales of $12.1 billion. Comprised of 210 companies employing 42,550 people, the province accounts for approximately 55 per cent of Canadian aerospace industry sales, with over 80 per cent of production exported to world markets.

Montreal is the third-largest aerospace manufacturing centre, after Toulouse and Seattle, explained Hélène V. Gagnon, chair of the Aerospace Industries Association of Canada (AIAC) and Bombardier Aerospace’s vice president of public affairs, communications and corporate social responsibility. Beyond enjoying solid growth on a year-by-year basis, It is one of the only places in the world where you can actually assemble an aircraft completely, with access to all the parts and services required.
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To understand the big picture of the Quebec aerospace sector, $12.1 billion translates into three per cent of the $403 billion global aerospace market. The U.S. owns 67 per cent of this market; Germany has eight per cent; France seven per cent; and Canada and the UK are tied at six per cent. Quebec accounts for half of Canada’s aerospace revenues, boosting the province above Italy’s two per cent, and just behind Japan’s four per cent.
Sector Snapshot
Quebec has a long and proud history in Canadian aerospace. Two years before the Silver Dart made the country’s first powered flight in 1909, 14-year-old Laurence Lesh of Montreal successfully completed Canada’s first glider flight – with his homemade glider pulled aloft by a galloping horse.
In 1910, Canada’s first ˜Aviation Week’ drew 20,000 visitors a day to inspect aircraft in Pointe-Claire, now a suburb of Montreal’s West Island. Thirteen years later, Canadian Vickers opened in nearby Saint-Laurent to build Vickers Viking flying boats for the RCAF. By 1944, when a group of employees bought the factory and renamed it Canadair, over 400 flying boats had been built. The company was purchased by Bombardier in 1986, and remains the core of its aerospace business.
In 1928, James Young opened the Canadian Pratt & Whitney Aircraft Company to service P&W Wasp engines in Longueuil, again just outside Montreal. Canadian Aviation Electronics Ltd., now simply known as CAE, was founded in Montreal by Ken Patrick in 1947, while Bell Helicopter Textron opened its Mirabel helicopter plant in 1986.
Today, the biggest players in Quebec are OEMs [original equipment manufacturers] such as Bombardier, Bell Helicopter, Pratt & Whitney Canada, and CAE, said Martin Vezina, a partner at Deloitte who focuses on the aerospace industry. This is an industry where the barriers to entry are really big, so it helps that Bombardier and the other big OEMs have the size and financing to compete globally.
Quebec is also home to a full range of MRO and secondary service suppliers, such as CASP Aerospace in Pointe-Claire. Even with the recession, the MRO sector is generally quite strong, said Alan Templeton, CASP Aerospace’s president and general manager. We did take a hit with the shutdown of Aveos. However, the work we have picked up directly from Air Canada – which we used to supply indirectly through Aveos – has helped us bridge the gap.
The fact that some sections of Aveos have been purchased by other vendors, such as Kelly Aerospace and AJW Technique, has led to the rehiring of some ex-Aveos employees, Templeton added. We would hope to establish similar relationships with these companies as we previously had with Aveos.
The Montreal Hub
As a result of its long association with aerospace, the Montreal region has become the industry’s undisputed provincial hub. 
In fact, 97 per cent of everyone who works in the Quebec aerospace industry is within a 30-kilometre radius centred on Montreal’s West Island, said Suzanne M. Benoît, president of Aéro Montréal. The group is a provincial strategic think tank that brings together all the major decision-makers in Quebec’s aerospace sector, including companies, educational and research institutions, associations and unions. 
There truly is everything and everyone you need to build a cutting-edge aircraft, from start to finish, Benoît said. It’s all here.
There’s a lot of technical expertise in Montreal, but you can also find it in Quebec City and other provincial centres, said Garry Venman, Discovery Air’s vice president of government services. Because of the density of business – particularly in Montreal – capable subcontractors are easy to find.
Player Snapshots
It is impossible to sum up the Quebec aerospace industry’s 210 companies in a single article. However, it is possible to take a brief look at some key players.
The biggest name in the game is Bombardier, which is located in Dorval near Montreal’s Pierre Elliott Trudeau International Airport. Over the years, the successor to Canadian Vickers and Canadair has also acquired Short Brothers, Learjet, de Havilland Canada, and Skyjet. Today, Bombardier is known as the maker of CRJ jets, Q400 turboprops, and Challenger, Global and Learjet business jets. The company is also preparing to launch its much-anticipated CSeries jetliner, with the first flight expected to occur at the end of June.  
The company’s 2012 revenues hit $8.6 billion, which is 71 per cent of the provincial industry’s yearly total for the same period. Bombardier employs 35,500 employees worldwide, with 60 per cent based in Canada, the majority of those in Montreal.
Things are going well, said Hélène Gagnon. Even with the troubled world economy, we have a $32.9 billion backlog in orders to be filled.
On March 7, 2013, Bombardier rolled out the test flight version of its CSeries CS100 jet. The 100-125 seat CS100 and larger CS300 twin-engine jetliners are squarely aimed at cost-conscious airlines, with their composite-based design promising to cut operating expenses by 15 per cent, and fuel burn by 20 per cent, when compared to current comparable airliners. 
And what of the payoff for Bombardier’s $3.5 billion CSeries effort? Our orders and commitments stand at 382 CSeries aircraft, Gagnon replied. Our track record also shows that all letters of intent and conditional agreements eventually get converted to firm orders.
Pratt & Whitney Canada (P&WC) is another Montreal heavy-hitter. The company makes 13 distinct engine families in Canada; namely, the JT15D, PT6A, PT6B, PT6C, PT6T, PW100, PW150, PW200, PW210, PW300, PW500, PW600 and PW800. It has 6,200 employees across Canada, with 5,000 of them based in Montreal-area plants.
P&WC invests about $400 million in research and development (R&D) each year, according to Nancy German, the company’s vice president of communications. For instance, P&WC is moving forward with its research into alternative fuels, with the goal of making all of its engines biofuel-compatible, including our newest engines programs, she said. These hydro-treated renewable jet (HRJ) fuels include biofuel derived from oilseed plants, such as camelina [North American climate] and jatropha [warmer climates]. The first Canadian biofuel-powered (camelina blend) revenue flight successfully took place in 2012 on a PW150A-powered Porter Airlines Bombardier Q400 turboprop.
Looking ahead, P&WC is examining bio-fuels that could be derived from switchgrass, wood chips, and even algae. Jatropha jet fuel is projected to be available in two to four years, said German, and algae jet fuel in eight to 10 years, once major processing technologies improve to reduce the production costs.
Headquartered in Trois-Rivières, and with locations in Windsor, Ont., and Rome, N.Y., Premier Aviation is Quebec’s largest MRO (maintenance, repair and overhaul) provider by total occupied hangar space. Founded in 2002 during the post-9/11 aerospace recession, Premier Aviation has nevertheless managed to grow, with 585 people now on staff. Today, its newly-expanded Trois-Rivières facility has space for up to six narrow-body aircraft, plus additional room in its three painting and refinishing lines.
For Ronnie DiBartolo, company president and CEO, success can be measured in the number of Airbus, ATR, Boeing, Bombardier and Embraer narrow-body aircraft that are serviced in Premier Aviation’s three locations. At the same time, he worries about the global trend of Tier One airlines demanding access to consolidated suppliers to reduce maintenance costs, and the push by OEMs such as Airbus and Boeing into MRO work.
The OEMs are rapidly reducing the number of competitors by expanding their presence in aftermarket activities, said DiBartolo. They are also becoming much more aggressive in restricting independent access to parts, materials, and technical data, and charging fees up to $20,000 a year for such access, based on engine or fleet type.
Add the need for independent MROs such as Premier Aviation to retool and train their staff to work with evolving composite requirements, and the financial pressures are huge. To survive, independents in labour-intensive sectors must continue to find ways to control costs through improved productivity and efficiency, said DiBartolo. Optimization of all processes and procedures is critical.
Founded in 1903 as Marconi’s Wireless Telegraph Company of Canada by the father of radio communications, Guglielmo Marconi, today’s Esterline CMC Electronics (CMC) focuses on the design and manufacture of flexible avionics products and integrated cockpit systems, said Jean-Michel Comtois, CMC’s vice president of sales and marketing, government and public affairs.
With its head office in Montreal, CMC also has operations in Ottawa and Chicago, Ill., and a workforce of 1,100. Its Montreal facility covers 268,000 square feet.
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Like other Quebec aerospace companies, Esterline CMC Electronics invests heavily in R&D, both through its own efforts and in partnership with Quebec universities. Yet, the company’s work is aimed squarely at solving real-world problems.
For instance, CMC’s latest generation global positioning system (GPS) receivers and flight management systems enable straighter, shorter and more efficient flight paths for aircraft, optimizing fuel consumption and causing fewer aircraft emissions, said Comtois. Avionics technologies are critical to reducing the impact on the environment. 
In pursuit of this goal, CMC is actively involved with the province of Quebec’s CRIAQ (Consortium de Recherche et d’Innovation en Aérospatiale du Québec) and SAGE Project (Systèmes Aéronautiques d’Avant-Garde pour l’Environnement).
Emerson Response 
In November 2012, the federal aerospace review conducted by David L. Emerson issued its report (the Emerson Report), titled, Beyond the Horizon: Canada’s Interests and Future in Aerospace – November 2012.
The report made 17 recommendations for bolstering Canada’s aerospace industry in the face of growing global competition and consolidation. Among these were calls for the federal government to support large-scale aerospace demonstration technology development; maintain funding under the Strategic Aerospace and Defence Initiative (SADI); take steps to aid workforce training, streamline regulatory compliance and procedures; promote the industry through trade agreements and diplomacy; and ensure that government procurement contracts include Canadian aerospace firms, either directly or indirectly.
In general, the Quebec aerospace industry liked Emerson’s initial recommendations. In fact, P&WC believes that the Emerson report has captured the status of Canadian aerospace very well, said Nancy German.
Ottawa appears to agree: The March 2013 federal budget allocated nearly $1 billion over five years for SADI to ensure that it continues to respond to the needs of this dynamic sector, according to budget documentation.
One likely reason why the Emerson Report was well-received is because its ideas are in line with those already being pursued by Aéro Montréal and its member companies. This doesn’t surprise Suzanne Benoît: Many of the Quebec aerospace executives who drive our organization played an important role in the aerospace review process, she said.
Certainly, many of Aéro Montréal’s programs are worth expanding to a national level. Take the group’s MACH initiative, for example. MACH brings together major aerospace organizations such as Bombardier, P&WC and CAE with smaller suppliers, to help the latter raise their standards and deliveries to globally-competitive levels.Smaller firms don’t always have the expertise to compete globally, said Benoît. The MACH program is aimed at helping them develop the skills and standards to serve Tier One suppliers in the consolidating global aerospace market.
Looking Ahead
Even with the recession, the Quebec aerospace industry continues to grow and thrive. The future looks even more promising: this province’s aerospace products seem poised to gain a bigger foothold in the global market, with the CSeries leading the way.
As the third-largest aerospace cluster in the world, the Quebec aerospace industry has a lot to offer manufacturers in the rest of Canada, said Hélène Gagnon. My hope is that the approaches and models that work here will be emulated in other parts of the country, to the benefit of our national aerospace industry.         
James Careless writes on aerospace issues for Canadian Skies, Rotorhub and Aviation Maintenance magazines. He is a two-time winner of the PBI Media Award for Editorial Excellence.

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