FACC boss: “The industry is sold out for the next few years”

2023-10-31 12:57:00

“We have a huge incoming orders,” CEO Robert Machtlinger told journalists in Vienna on Tuesday. The $5.7 billion “order backlog” is “immense.” “We didn’t even have that before the crisis,” said the CEO. “The industry is sold out for the next few years.”

As many aircraft have been sold worldwide in the first half of the year as in the entire previous year, Machtlinger explained the dynamic. There is a high demand from the airlines, “more than the industry can supply”. According to market expectations, 40,850 aircraft will be delivered worldwide by 2042 – 80 percent of them short- and medium-haul aircraft. “These are the cash cows, they are the butter on the bread.” Short-haul routes dominate the market. Airbus alone has over 8,000 orders, “more than ever before”.

World market “larger than before COVID-19”

The global aviation market is “larger than before COVID-19”. The number of flights compared to 2019 is 108 percent. “The international connections are still a bit behind.” This applies to Asia and China in particular – as an aftereffect of the once restrictive Covid rules. “There is a new growth market for this, called India,” emphasized the industry expert.

The aviation industry is developing very well and is “one of the few industries that cannot complain about too little demand,” said Machtlinger. And this in the midst of major changes – such as geopolitical tensions “that are not getting better”. Russia’s war against Ukraine and, more recently, the war in Israel are reshuffling the cards on the global market.

“Supplier chains will change sustainably”

“The supplier chains will change sustainably,” said the CEO, referring to the USA, Europe, China and India. The price increase is also having an impact. “Unfortunately, inflation has not been alleviated and is currently developing into a location disadvantage for Austria.” FACC is “100 percent aviation and 100 percent export-oriented.” The company supplies industry leaders in international aircraft construction such as Airbus and Boeing from the Innviertel.

The implementation of CO2-neutral flying has become “massively consolidated” among airlines and suppliers in recent years. “That’s on the agenda.” Decarbonization is “a long journey, it will be a marathon and will completely change the entire industry by 2040/50.” In the next 25 years, synthetic fuels will be the point, after which – from 2050/60 – hydrogen will come. However, biological synthetic fuel, for example from rapeseed, is not the issue. Food comes first – the raw materials needed for it should be on the plate, not in the tank. The production of synthetic fuel, in turn, “requires electrical energy and for this wind, solar or hydropower”.

Shortage of workers and skilled workers “on everyone’s lips”

Airbus and Boeing would “hardly launch any new aircraft” before 2028. This will only happen “when there is an engine that is 20 percent more efficient than currently and SAF-compatible” (SAF for Synthetic Aviation Fuel, note). The manufacturer Rolls-Royce can already guarantee 100 percent SAF suitability.

The shortage of workers and skilled workers is also “on everyone’s lips” in the industry. Not so at FACC – the company is countering this with a number of measures – such as language courses for family members, electric cars for 1 euro per day per person for carpooling to work and various mentoring campaigns. “We have built up 600 people in the last 18 months,” says Machtlinger. And another 400 are expected to be added by the middle of next year. FACC currently employs almost 3,300 people, around 2,850 of them in Austria.

“We do a lot of things through international recruiting,” reported the company boss. However, there is full employment in Hungary, Poland, the Czech Republic, Slovenia and Bulgaria. That’s why the company is looking for workers in Serbia, Bosnia and Turkey. “The new red-white-red card helps us,” noted Machtlinger. This means that people from non-EU countries can work in Austria under precisely defined conditions.