Source: Hospodářské noviny Date: 21.08.2024 Author: Petr Zenkner
Businessman Jaroslav Strnad Sr. is plunging into another business. He has bet that Russian helicopters are ending in many countries due to geopolitics and that there will not be enough new machines from American manufacturers Sikorsky or Bell. Or they'll be too expensive. Meanwhile, there are around three thousand Sikorsky UH-60 Black Hawk helicopters flying around the world, older versions of which are being phased out by the US military. Over the past year, a Czech businessman has put together a group of six companies from the Czech Republic, Slovakia and the USA, which has the ambition to become one of the main global players in this field.
"Waiting times for new helicopters from Western manufacturers have stretched to three or even five years. At the same time, decommissioned older machines can be modernised and operated in various roles for decades," Adam Šotek, CEO of CE Industries, told HN. According to him, the helicopter division named Helicopter Alliance, which was presented for the first time at the recent air show in Farnborough, UK, will become another pillar of CE Industries' business. So will the energy, rail, waste recycling and fast-moving consumer goods divisions.
The Helicopter Alliance is made up of six companies, most of which have a history associated with arms group CSG. The latter is owned by Strnad's son Michal. These are Slovak training companies that were formerly involved in training pilots for Afghanistan and now train pilots for the Slovak army. They also have four of their own civilian versions of the Hawks used in firefighting. Another is Česká letecká servisní (ČLS), a company with experience in upgrading Black Hawks in Central Europe. Most recently for Croatia.
CSG spokesman Andrej Čírtek confirmed that all of these firms came under the Helicopter Alliance last November. "The operation of the helicopter fleet or helicopter upgrades represented a business that had no continuity with other parts of the CSG Aerospace division," he explained. In aviation, Strnad Jr. will keep the production of radars (by Eldis and Retia in Pardubice), the development of air traffic control systems and the repair of civil aircraft at Ostrava's Mošnov airport.
Čírtek did not want to comment on the price of the transaction. However, he said it was standard, even though it was between his son and father. However, the sums involved are probably not staggering: last year, the largest company of ČLS had a turnover of just over CZK 300 million and a profit of less than CZK 10 million. Slovak companies were mostly in the red.
"Jaroslav Strnad has a 91 percent stake in the entire Helicopter Alliance, with minor stakes held by three key project managers," Šotek said. For this year, the six companies in the holding together aspire to a turnover of between CZK 1.5 billion and CZK 2 billion. It is unique in that it offers customers everything from modernisation to pilot training.
In addition, the group includes the American company Ace Aeronautics, which has been the basis of the entire helicopter business since the beginning of the year. Based in Guntersville, Alabama, the company was founded in 2015 by former US military personnel. And former pilots and veterans make up the bulk of its 80 employees. One of the founders, Rich Enderle, served in the military for 29 years, ending with the rank of colonel. That, of course, makes it easier for Helicopter Alliance to compete for the decommissioned helicopters that are bought at auctions. But bidders must meet the U.S. Army's requirements. Without U.S. Army contacts, success in such an auction is theoretical. And even then, the helicopters are only being converted to a more civilian version used by, for example, firefighters.
Ace Aeronautics' biggest project so far is the upgrade of nine Black Hawk helicopters of the Austrian Army. The US company has developed its own digital cockpit solution for them. And in cooperation with avionics supplier Garmin, it has received certification from the US aviation regulator FAA. The aforementioned Enderle told industry site Verticalmag in April this year that the market for this cockpit is over a thousand units. In addition to this, Ace Aeronautics also provides all maintenance, repair and upgrades (so-called MRO) for the helicopters. Ace also has the advantage of having 13 Black Hawks "in stock" ready for conversion. Meanwhile, the US Army retires around 40 helicopters a year.
Of course, Helicopter Alliance is not alone in the business of upgraded Black Hawks. Strnad's chances in the market are to be further enhanced by the engagement of Jonathan Castorena, a manager with 20 years of experience from Bell Helicopters, who will be responsible for sales. "We hope to capture a large percentage of this market. We can easily handle over 20 orders a year," Castorena told HN. These will include military, police and civilian versions for firefighters.
Helicopter Alliance sees great opportunities in Southeast Asia. Potentially the biggest customers there are Malaysia, which recently signed a contract for four helicopters. Or Indonesia and Thailand. The market there is growing for similar reasons as in Europe. Only here the danger is not Russia, but China.
In the future, the possibility of delivering upgraded UH-60s to Ukraine as part of Western aid is not ruled out. There are hundreds of Russian Mil helicopters in Ukraine. But in the end, the aviation sector was dominated by the delivery of F-16 fighters. Plans for the delivery of dozens of Black Hawks took a back seat. Still, two Black Hawks from Helicopter Alliance are flying in Ukraine and are used by intelligence officers there. And it is quite possible that in the future the plan to rearm the Ukrainian army with Hawks will come to life.