BBA Aviation's Ontic Engineering & Manufacturing unit is moving forward aggressively with a strategy to expand its manufacturing activity and support of legacy part through new acquisitions and licenses. The company is in negotiations for up to nine new projects that could come to fruition by the end of the year, said Robert Sadler, director of business development for Ontic (Booth N5500).
These negotiations come on the heels of its agreement for an expansion of Pratt & Whitney Canada (P&WC) JT15D engine component production and as the company completes the integration of last year’s acquisition of a portion of GE’s legacy avionics business in Cheltenham, UK.
Since BBA acquired the Chatsworth, California-based company in 2006, Ontic’s revenues have ballooned from $35 million to $190 million. And, in its most recent financial report, BBA called Ontic a driver in the 134-percent leap in first half operating profits of the Ontic Aftermarket Services Group.
With the integration of GE, and preparations for general work, Ontic’s employee base has increased by approximately 120 over the past year to top 500.
Sadler credited this expansion to strong support from parent BBA. “We’ve got a large appetite for acquiring intellectual property. Our BBA parent has fully funded us to do that, and we’re working to deploy that capital,” he said. “They have been an excellent parent. They like the Ontic model; they support it and they are not shy [about] investing in it. And, we’ve demonstrated the returns and the long-term benefit of keeping these products available.”
But Sadler also credits the company’s relationships with the OEMs and an ability to fill a niche for supporting non-core products. “We see an increase in demand for our extended-life solutions in the market,” said Sadler. “The OEMs are comfortable with the activity they have on newer variants, but they need to rationalize and move some of the non-core and non-focus product out. There is a lot of portfolio rationalization going on and it’s very large opportunity space for Ontic.”
OEM Support
What makes it work, he said, is that Ontic supports OEMs rather than competes with them. “We are not a competitive threat. We don’t have anyone designing our own product line. That’s not comfortable for OEMs,” Sadler said. “Our focus is wholly on sustaining engineering talent and supply chain expertise because that's what it takes to keep these older non-core products alive.”
With that philosophy, Ontic, which has been in business for more than 40 years, has an expansive portfolio that has grown to encompass 4,500 products and one million component parts for 3,000 military, commercial and business and general aviation customers.
The company is finding success across platforms, but particularly in the areas of electronics and avionics, he said. But Ontic parts can be found in nearly every section of an aircraft.
Announced last spring, the JT15D parts acquisition involved an outright purchase of manufacturing rights and encompasses approximately 80 parts. This marked the third batch for the JT15D, bringing Ontic’s support to close to 300 of those parts. “Beginning with our first engagement with P&WC in 2015, we had the intent to expand Ontic’s component offering for the JT15D,” said Gareth Hall, president and managing director of Ontic. “The JT15D engine aligns with Ontic’s commitment to support legacy products and this further acquisition is a logical progression and expansion of our current services to our OEM partners.”
The additional parts are manufactured at Ontic’s Chatsworth facility. Aviall will continue to distribute the parts.
Ontic also has nearly completed the integration of the portion of GE’s avionics business acquired late last year. That business involves legacy avionics parts including electromechanical, barometric, gyroscopes and electronics products. While much of it involves military and commercial platforms, the new work also involves items such as clocks, airspeed indicators and altimeters for Bombardier Challenger 300 and 600 models, as well as Hawker 800s.
Ontic is folding that business into its neighboring Cheltenham, UK facility and moving about 80 employees from GE. To accommodate the new work, Ontic has added a number of new workshops as well as testing capabilities in Cheltenham. “The transfer is in full swing and going very well,” he said. “We’ve invested heavily in the facility readiness and we’re in physical transition with business. We’ve been working closely with GE.” The transition is expected to be complete in the fourth quarter.
As for the new work, it was too early for Sadler to detail the projects, but he said the planned additions span business aviation, commercial and military legacy parts. “It runs from avionics to electrical mechanical to fluid pumping,” Sadler said. “It’s basically going across all our strong suits, products with major Tier One manufacturers—all things that suit us very well.”
Among areas they plan to build up include cockpit instrumentation, radar units, environmental control units and smoke detection on the avionics front. The mechanical systems involve more business in the area of legacy engines and auxiliary power units.
Similarly with the Ontic’s Cheltenham facility, the company has invested heavily in facility renovations and reconfiguration in preparation for the new work. This includes the addition of a mezzanine, repurposing certain areas and a heavier focus on electronic scanning to free up document space. As a result, Sadler said, “We have two areas that are clean and ready for new product lines.”
The investments also involve building up the teams involved in facilitating such transitions. “Our teams are ready to go performing due diligence and we are ready to start executing transitions,” he said. “Our pipeline of projects is as big as we’ve ever seen it.”
