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This document may not be fully accessible. For an accessible version, please visit http://www.tradecommissioner.gc.ca/eng/document.jsp?did=132965
Market Study on the Hungarian Aeronautics Industry with special focus on the MRO sector[1]
September 2012 Produced by the Canadian Trade Commissioner Service
Table of Content
PART I. The Hungarian aeronautics industry
o Market Overview
o General characteristics
o Key Players
Customers
Competitors
Government Agencies/Institutions - government industry programs around this
Innovation/ academic institutions in composite and technologies
Market and Sector Challenges (Strengths and Weaknesses)
o Policy and access issues
o Changes to policies with implications to trade and investment
o Expected sector growth
o Tax and financing issues
o Labour force
o Hungary's unique or complimentary position within industry players of CE
o Other requirements that should be met to ensure successful participation by Canadian business
o Major foreign competition (MNEs operations) in the sector and in the market and the projects
and sub-sectors in which they are focused
Key Opportunities
o Type of Opportunities
Business partnerships opportunities with Hungarian companies with engineering expertise
CDIA (Canadian Investment in Hungary) opportunities
Innovation partnerships opportunities
o Recommendations to Canadian companies on where/how to do business in the market
o Recommendations to strengthen Canadian – Hungarian Aeronautics R&T Cooperation
Key Contacts
PART II: The Hungarian MRO sector
o Market Overview
o General characteristics
o Key Players
Customers
Competitors
Government Agencies/Institutions - government industry programs around this
Market and Sector Challenges (Strengths and Weaknesses)
o Strengths and weaknesses of the sector in the market, including information specific to SMEs:
o Major foreign competition (MNEs operations) in the sector and in the market and the projects
and sub-sectors in which they are focused
Key Opportunities
o Type of Opportunities
o Recommendations to Canadian companies on where/how to do business in the market
Key Contacts
o Organization
List of abbreviations
Annex 1 List of aeronautics related companies
Annex 2 - Aeroplex of Central Europe Ltd. (ACE) customers
PART I. The Hungarian aeronautics industry
Market Overview
General characteristics
The Hungarian aeronautics industry is relatively small compared to some larger Member States in the European
Union, but due to the creative and innovative characteristics of the small and medium sized enterprises it offers
many opportunities to foreign investors, partners.
Although the initial efforts in the field of aeronautics were made relatively early, the political situation prevented
real growth in this field till the early end of the last century. During the 1990s, under the leadership of Lockheed
Martin, Hungarian engineers and technicians grew increasingly familiar with advanced methods of aircraft
operation, maintenance and refurbishment of Western aircraft: B737, B767 and Fokker 70 operated by MALÉV
Hungarian Airlines. By the end of the decade, a new group of aerospace experts had emerged that was
proficient in English and knowledgeable of Western practices in the aerospace business.
The re-emergence of Hungarian aerospace began in 2000 with the construction of the first greenfield aerospace
plant by GE Engine Services in Veresegyház. This was soon followed by Lufthansa Technik, Eldim, Alcoa,
Elektrometall GmbH and Flamespray FDI projects. Together, these companies laid the foundations for a modern
aerospace sector in Hungary. In the early years of the millennium, three new small aircraft design and
production companies also commenced operations. Using all-composite technologies, Corvus Hungary Ltd.,
Composite One Ltd. and Waterfly Ltd. opened a new “composite era” in the history of the Hungarian aerospace
industry. Today there are six SMEs active in the design, development and manufacturing of general aviation and
unmanned aviation vehicles: Avana industries, Bonn Hungary Electronics Kft., Corvus Hungary Kft., econEngineering Kft, Halley Kft., Idea-Aircraft Kft.
The Hungarian aerospace industry (including MRO organisations) is mostly privately owned and currently comprises more than 130 registered organisations employing some 2,500 people.
To accelerate the development of the sector the Hungarian Aviation Industry Foundation (HAIF - www.haif.org)
was established in 2003 then HAIF initiated and oversaw the creation of the Hungarian Aerospace Cluster (HAC)
in 2006, the first aerospace industrial group in Hungary focusing on development and manufacturing. HAC currently has 25 members.
In 2007, HAIF launched the AS9100 aerospace quality management project for its members in tandem with the Ministry of Transport. More than 30 companies participated in the project.
In September 2007, HAIF founded the Hungarian Aerospace Technology Platform (HATP), a third key body
designed to help research and development organisations participate in FP7 Framework programmes and bring
together space and aeronautical companies in Hungary. HATP currently lists 29 organisations as members, including three major universities.
Integration in the aerospace industry started in 1987 with the lease of the first B737 aircraft in the field of MRO cooperation with major European service providers.
In the past 12 years several European companies established factories in Hungary in the field of MRO,
manufacturing and software development. With the establishment of HAC in 2006 cluster members started to
visit regularly the major EU exhibitions in Germany, France and Italy. Sport aircraft manufacturers regularly visit the Aero Friedrichshafen expo in Germany.
HAC established collaboration agreements with two Polish and a German clusters and joined the European
Aerospace Cluster Partnership EACP network from day one of its establishment.
The AS 9100 certification project conducted between 2007-2010 helped to improve the profile of HAC/HATP
companies and the supplier relationships started to bring results. Engine parts, wire harnesses, composite
parts, electronic components and software are the main areas listed in the capability list of Hungarian aerospace companies.
In the field of MRO both Lufhansa Technik Budapest and Aeroplex of Central Europe Llc. provides third party
maintenance and overhaul services on A320, B737 NG aircraft for EU customers. BAS Llc. performs C checks on Embraer 120 for third party customers.
In the field of R&D Hungarian aerospace related organization are regularly taking part in EU FP7 Framework
programmes and in the Clean Sky JTI. There are several projects where Hungarian organizations gained the
coordinator status.
Key Players
Customers
The Hungarian market is relatively small for aeronautics related products, solutions, so the Hungarian
aeronautics industry is highly export oriented. Customers cannot be classified in general as the different
companies work with a different product scale. Besides the usual European Union based customers, some companies have customers from North-America and Asia as well.
Competitors
There are plenty of small players in the Hungarian aeronautics industry and some of them are 100% aviation
focused, others are partly diversified to aeronautics, many of them from the automotive and ICT sector, which
are strong domains in Hungary. This chapter gives an insight to some of the key players, but the full list of the
main industrial participants can be found in the Annex I - List of aeronautics related companies. Competition is
larger in the field of MRO (ACE vs. Lufthansa Technik), engineering and some manufacturing firms, but smaller in other cases as lot of small companies are focusing on niche markets.
Hungarian independent engineering companies started to emerge in the late 90s due to the rapid development
of the automotive industry. They later diversified into other industry sectors and become members of HAC and
HATP, participating in a wide variety of projects. Thanks to highly sophisticated software implementations,
these companies are now able to provide design, simulation and other CAE services to both local and international companies. Some of them are AS9100 certified.
ArraboCAD LIc
ArraboCAD was founded in December 2002 from 100% Hungarian private capital. The company employs young,
energetic engineers with German automotive industry experience in manufacturing preparation and engineering
responsibilities.
The company undertakes design and development of products, production units, production lines and bespoke
equipment, as well as workshop diagrams and documents. It offers solutions from mechanical planning through
electric, pneumatic development and assembly to installation. ArraboCAD is also able to participate in design planning, rapid prototype production, manufacturing process optimization and ergonomic examinations.
CAD-Terv LIc
CAD-Terv Llc. has been offering engineering services in a variety of fields since 1997, including mechanical
engineering, product development and complete product management. Its team of experts supports clients by
resolving company-specific problems and providing product demonstrations to help clients choose program
packages and hardware best suited to their needs. New users can acquire the knowledge necessary for the
effective use of CATIA systems and DS/PLM solutions by attending customised courses run by experienced
engineers. The company also played an important part in the planning, development and construction of
MASAT-1, Hungary's first mini-satellite. CAD-Terv was tasked with designing the frame of the satellite and developing the process for opening the aerial in space in accordance with complex specifications and guidelines.
CFD Engineering LIc
A Hungarian-owned engineering company with a main profile of fluid flow and heat transfer simulation and CF design.
C3D Engineering LIc
C3D Engineering Consultants was founded in November 1999 to establish an engineering company specialized in:
solving complex tasks in the field of mechanical engineering,
deploying the latest engineering devices (3D CAD systems),
providing quick, professional and cost-effective service,
supporting its partners with advice on the systems in operation, in addition to performing engineering
and simulation tasks.
In the course of its operations, C3D has achieved outstanding results in a number of fields, particularly in
simulations aided by computer engineering (static and kinematic simulations). Furthermore, C3D has helped its
partners complete not only mechanical engineering projects but also carry out related tasks, such as visualization and photo-realistic representation:
computer animations,
product brochures,
product descriptions and manuals in several languages.
C3D maintains close cooperation with the Budapest University of Technology and Economics and assists its educational activities.
Diehl Aircabin GmbH
The Diehl Aircabin GmbH aircraft parts manufacturing company has started its production in Nyírbátor this year
(2012). According to the plans the plant will reach its full capacity in three years with 5 million Euro
investments to be capable of production of 15 million Euros worth aircraft parts yearly. The production covers
inner coverage of the cabin and the ventilation equipment for Airbus, Boeing, Eurocopter and Embraer aircraft. The employees were trained in facilities of the company located in Germany.
eCon Engineering LIc
eCon Engineering Llc. is a mechanical engineering and consulting firm established in 2002. The company
delivers sophisticated engineering services based on a strong finite-element background and a wealth of
experience in automated assembly. Fields of activity include CAE analysis and design engineering using ANSYS.
Based on the broad range of experience of its expert teams and extensive network of vendor contacts, eCon is
able to provide a highly competitive range of services.
Rea-Tech LIc
Rea-Tech Kft. is a privately owned Hungarian company in air transportation and aeronautics. Rea-Tech's
activities are focused on R & D, specialist consulting, engineering, training and innovation process management.
The company's mission is to contribute to national and international projects for the improvement of air
transport systems. Rea-Tech continues to actively participate in a variety of EC projects under different
Framework Programmes and collaborates with a number of research institutions, organisations, private companies and universities.
Willsits Engineering LIc
Willisits Engineering was established in 2009 to develop highly engineered, world-class engines for electronic
vehicles. Founded on the know-how of Intermotor Llc., itself formed in 1990, the company has more than 20
years' of specialist experience allied to small-series production capacity. Willisits Engineering is capable of
designing electrical engines of varying performance in small or large batches for a wide range of purposes, as
well as developing and manufacturing integrated electronic control systems to meet individual needs. In
planning electrical engines, the company's engineers aim primarily to achieve maximum performance and first-class quality, while also prioritising cost-effective production and optimising the power-to-weight ratio.
Government Agencies/Institutions - government industry programs around this
The followings are the main government organisations which are interesting for the Hungarian aviation sector:
Ministry for National Economy
Ministry of National Development
National Innovation Office
Hungarian Investment and Trade Development Agency
National Transport Authority
The main government programme is the general development plan for the Hungarian industry: The New
Széchenyi Development Plan which uses mainly EU funds to promote the development projects within Hungary
and provides opportunities for aeronautics companies as well.
Innovation/ academic institutions in composite and technologies
The Department of Polymer Engineering at the Budapest University of Technology and Economics is the main
composite related research organisation in Hungary.
Composite part manufacturing for Ultralight aircraft started in the middle of the 90-s by Flytech Llc. and Halley
Llc. in a small scale. The first Hungarian designed full composite UL aircraft prototype was built by Corvus Aircraft, the predecessor of Corvus Hungary in 2005.
The following companies have composite capabilities in the aerospace sector:
Aeroplex Llc – repair of composite parts for B737, B767, Fokker, Q400,
AVANA Industries – app. 3-5 mUSD investment in greenfield site for component mfg. , Hungarian
company
Corvus Hungary Llc – app. 3-5 mUSD investment in greenfield for mfg. Sport aircraft, Hungarian
company
Diehl Aircabin- app. 10 m USD investment in greenfield site for cabin component mfg., German
company
Flytech Llc – app. 3-5 m USD investment in greenfield site for component mfg., Hungarian company
GE Engine Services- repair of intake composite parts for large engines. US company
Lufhansa Technik Llc- repair of composite parts for B737, A320. German company
Zoltek Plc. - Manufacture of carbon fibre raw materials. 100% US owned, 600 employees
The Hungarian Avana Industries and the German Diehl Aircabin are building new greenfield sites in Somogyvár (SW Hungary) and Nyírbátor (NE Hungary) respectively with the planned grand opening in 2012.
Flytech LLC has moved to a brand new facility a few years ago in Szombathely (West Hungary), now considering a new venture with its traditional Austrian partner Diamond Aircraft.
The Hungarian specialty in this field is the US owned Zoltek Plc. manufacturing carbon fibre materials: Panex
and Pyron for aerospace application.
Apart from aerospace industry composite materials are widely used in the sailing industry and bus industry in
Hungary.
The policy of the Hungarian Government is to attract more high-tech foreign companies and there are subsidies
and grants available for greenfield investments. The low tax environment, subsidies and grants, good
infrastructure and low labor cost could attract several aerospace multinationals to Hungary in the past 12 years
(GE Engine Services, ALCOA, Lufthansa Technik, Zoltek, Sulzer Metco, Diehl Aircabin), even if other countries in the region had traditionally more developed and bigger industry.
Market and Sector Challenges (Strengths and Weaknesses)
Policy and access issues
The Hungarian aeronautics industry has the following strengths:
Strong established design and supplier relationships with related industries – automotive, electronics,
plastic, energy, space, software
Established supplier relationships with multinationals – Airbus, GE, GM, Siemens, ALCOA
Well established international network of HAIF and HAC
Strong support of Hungarian Aerospace Technology Platform in various fields of research – material
sciences, communication and automation
Well established relationships with domestic military organizations
Implemented AS 9100 QMS with 20+ companies
Focus in a few aircraft segments – amphibians, UAVs, aerobatic aircraft for Red Bull Air Race and some
ultralight aircraft types
Creative engineers and researchers with good connections to the leading educational and research
institutions related to their field
Competitive labour costs
Well established relationships with related industry Clusters and Technology Platforms – MAJOSZ-
Association of Hungarian Automotive Part Manufacturers. MAJÁK- Hungarian Vehicle Cluster MMK -
Mobility and Multimedia Cluster, ARTEMIS Hungary - Embedded Sytem Development Technology
Platform. Mediklaszter- Medical devices
Good collaboration with the local space industry and Space Cluster
Existence of a new well equipped electronic R&D centre in Budapest- EL-TECH Center
Good knowledge of the EU R&D projects – FP7, CleanSky and SESAR
Opportunities to get local subsidies for national R&D projects
Szechenyi Plan projects using EU structural funds
10+ years of experience in overhaul of Boeing 737 and Airbus A320 families
The industry is weak in the following categories:
Low scale financing possibilities compared to the development plans
Difficulties to switch from prototype to mass production
Low level of expertise on marketing at international level
Changes to policies with implications to trade and investment
The Hungarian Investment and Trade Agency promotes the Hungarian companies to find access to foreign
markets and it also supports foreign investors to find good opportunities in Hungary.
Expected sector growth
Due to the relatively young age and small size of most of the companies, the Hungarian aeronautics industry is
growing rapidly.
Tax and financing issues
The Hungarian taxing system is competitive with the European Union, the corporation tax is 10% only for small
and medium sized companies (till the turnover of 500 million HUF), whereas the personnel income tax has a general 16% flat rate.
Labour force
Hungarian schools and universities provide well skilled engineers to the Hungarian industry, but although the
total number of aeronautics engineers are not very high compared to some larger aeronautics states, not all the
aeronautics engineers find a workplace in the aerospace industry. This is especially true after the bankruptcy of Malév Hungarian Airlines in February 2012.
Hungary's unique or complimentary position within industry players of CE
Central European countries (mainly the New Member States of the European Union) are generally strong in
General Aviation related research and production. Out of them Poland and the Czech Republic are the
forerunners: Poland is mainly a supplier to large multinational companies and have larger assembly lines, such
as Sikorsky helicopter and PW turboprop engine, whereas the Czech Republic is one of the leading
manufacturers in General Aviation. Hungarian companies therefore are partly competing with organisations
from these states, but due to the very different characteristics of the products in the ultra-light aircraft category, the competition is not very direct.
The major differences between Hungarian Aerospace industry and its regional competitors are:
it is just emerging and the government is not fully aware of the importance of this sector
it develops by diversification from automotive and electronics industries
it focuses on composites, no aluminium structure manufacturing capabilities
all of the companies are SME-s except for Aeroplex and Lufthansa Technik
no engine assembly and overhaul capabilities
all small aircraft manufacturers are owned by Hungarians, no multinationals in this area
multinationals are present only in part manufacturing and in the MRO sector
Other requirements that should be met to ensure successful participation by Canadian business
It is advisable to ask for local support when searching for local opportunities as one hand the European Union
regulations may differ from the Canadian ones in certain areas, on the other hand there are many tiny specific issues in the Hungarian business life which can be resolved by a local help.
Major foreign competition (MNEs operations) in the sector and in the market and the projects and sub-sectors in which they are focussed
Hungarian companies seldom compete directly with large multinational companies as their products are usually low in number, focusing on niche segments where large companies normally do not operate.
Key Opportunities
Type of Opportunities
Business partnerships opportunities with Hungarian companies with engineering expertise
There are several opportunities in the field of engineering:
1. Collaboration with existing small Hungarian engineering companies using their capabilities in the form of
creating JV-s and raise their profile this way. The large and respected Canadian aerospace industry could
benefit of such JV-s as well, because it could enter the CEE market with lower effort.
2. Extend the capabilities of Hungarian engineering companies with providing them training, consulting in
the field of certification of small GA aircraft and its systems including UAV, UAS. Joint landing gear
design for the Hungarian General Aviation aircraft could be also an opportunity. AVANA Industries,
econEngineering could be partners for such projects.
3. Establish collaboration in the field of embedded system development. ARTEMIS Hungary Technology
Platform could be a good partner organization for this purpose. Embedded systems are used everywhere
in the Aerospace sector, including space communication and aircraft environment system control
4. In the field of flight simulation Budapest Technical University can be a partner for Canadian companies
who operate a flight simulator for training purposes. This simulator can be improved further to serve
better training and R&D equipment.
Another opportunity is to collaborate with Bonn Hungary Electronics who developed a UAV and has a
plan to develop a full training system for it. As a result an integrated UAV and training and evaluation
system will be developed for multipurpose applications.
5. Malév operates a full-motion, all-round B737NG flight simulator in its premises at Liszt Ferenc Airport in
Budapest. However, its existence is endangered by the unstable situation emerged around the airline’s
bankruptcy.
CDIA (Canadian Investment in Hungary) opportunities
There are five major opportunities in this field:
1. Establish a JV with Avana Industries. The company is in the phase of establishing a greenfield
manufacturing site in Somogyvár, Hungary. The company needs a strong western partner with
management and technical expertise to be successful in the market. The company has a prototype of a
4 seat amphibious airplane that should be certified with a help of a western experienced partner
2. Joint development, certification and marketing of a new larger UAV with Bonn Hungary Electronics Llc.
establishing a consortium with BHE.
3. Hungarian Aerospace Cluster is seeking a western partner that would establish a greenfield site to
manufacture civil engines for GA in Hungary. If Canada has a candidate product for it, or has any other
engine project Hungary could be involved in, that would be supported both by HAC and the Government.
4. Establishmnet of a landing gear overhaul facility in Hungary could be considered together with a local
partner or as a Greenfield site to serve CEE region.
5. Establishment of a JV with Aeroplex to serve CEE and Russian market. The current situation after MALÉV
bankruptcy is very favourable for such a project. This project could include a creation of a landing gear
overhaul shop and engine repair shop for Canadian engines as well. This would expand Aeroplex capabilities from airframes toward component repair and provide for Canada access to CEE and Russia.
Innovation partnerships opportunities
The Hungarian Aerospace Industry is in the phase of finding its product-service niches, its partners, and its markets. That is why there is a range of collaboration opportunities in innovation.
One particular area where there are common interests is the partnership in system development.
It can include space communication systems, flight simulator system development, cabin control systems and UAV/UAS systems
The strategy of the HAC has a general objective to find a “preferred country” as a “mentor” and a major partner
that can help to develop faster and more focused. For example for Mexico, it is the US, for Austria, Germany is
such a partner now. Canada could be such a special partner for Hungary. HAC is open for a possible cooperation
with Canadian aerospace clusters, platforms to enhance the cooperation between the two countries. Current opportunities and future perspectives for aeronautics research and technology
Since the local industry focuses in GA its main area for research is material sciences, embedded system
development and UAV/ UAS. Local companies heavily rely on the support of academic research labs. That is
why the current opportunities exist mainly with the collaboration with the Budapest University of Technology
and Economics and Óbuda University in Budapest. There are two specific areas where research organizations are actively participating in aerospace research:
1. SZTAKI is conducting UAV and other automation research,
2. KFKI material department is participating in ceramic material research for aeroengines (with GE). The
future direction of R&T will depend on how Hungary can find partners, directions and niches. That is why
the strategy of HAC called for a special R&T program in 2010: the Hungarian version of the “Take Off” program introduced by Austria ten years ago.
Recommendations to Canadian companies on where/how to do business in the market
Hungarian Aerospace Cluster and Slot Consulting are partners in promoting and developing the industry and
were active in the formulation of the Hungarian Aerospace Strategy in 2010. It is recommended to consult first
with these organizations on the opportunities and ways of conducting business due to the rapidly changing
environment.
On the other hand ILA Berlin Airshow 2012 and Aeromart Toulouse in 2012 will be good opportunities to meet
with some suppliers and engineering companies.
Recommendations to strengthen Canadian – Hungarian Aeronautics R&T Cooperation
Some Hungarian organisations are frequent participants of the research programme of the European Union:
FP7. A shortlist of the key FP7 oriented Hungarian organisations:
Budapest University of Technology and Economics
REA-Tech Ltd.
Slot Consulting Ltd.
In this programme Canadian companies may also participate (without funding from Europe). The research
project CANNAPE (Canadian Networking Aeronautics Projects for Europe) aiming to bridge key R&T related
Canadian and European organisations. Slot Consulting from Hungary is a member of this project, providing
excess to Central European research organisations through the CEARES Network. It is recommended that
Canadian organisations use the channel of CANNAPE towards Hungary and the rest of Europe as well in the field of research and technology.
Although it is partly a defence and a space organisation, Bonn Hungary Electronics Ltd. is also a key innovative
Hungarian aeronautics company, specialised on avionics systems and UAVs.
Recommendations to Canadian companies on where/how to do business in the market
The main Hungarian aeronautics organisations can be found in the Appendix.
PART II: The Hungarian MRO sector
Market Overview
General characteristics
The MRO sector in Hungary can be divided into three layers.
There are two big organisations servicing the large airlines. ACE and the Lufthansa Technik cover the main part of the market.
The second layer is some small but prospering MRO companies mainly focusing on general aviation:
AVICRAFT (Tököl)
AVIARENT (Kaposvár)
CentroPlane (Budaőrs)
JETSTREAM (Tököl)
HAT-S (Fertőszentmiklós)
Trainer (Nyíregyháza)
The third layer is many very small organisations focusing on the MRO activities of sport aircraft.
The military aircraft and aircraft owned by authorities are currently maintained mainly abroad.
Although the management is optimistic about the future ACE, one of the largest Hungarian MRO company is in a trouble after the recent collapse of Malev Hungarian Airlines.
According to the seasonal nature of the maintenance works the new contracts will begin in September while the
required agreements should be signed in period of May-June. To enable this situation around Aeroplex
developed as Malév ceased its operations should be settled. The half of the company’s income was coming from
Malév and therefore a range of services provided only to Malév no longer needed. The company initially employing 550 workers announced layoffs in amount of 230 staff.
The calculations supporting that the company will maintain its operations on the international market after Malév’s collapse. The company will focus on the international customers.
The net revenue of Aeroplex in 2011 was 11,6 billion HUF and the operating profit level was 500 million HUF.
However it is not certain yet how Malév’s liquidator will precede in their case the company has a good potential
for continuing its operations. The company’s market share, the traditionally good service level recognised by the customers would provide a good base for a foreign investor.
Key Players
Customers
The Hungarian air transport market was covered by three major airlines: Malév Hungarian Airlines, WizzAir and Travel Service. All three of them had a base of operations in Budapest International Airport.
Malév Ltd. operated as Malév Hungarian Airlines was the flag carrier and principal airline of Hungary between
1946 and 2012 from Budapest Liszt Ferenc International Airport. The airline flew to 50 cities in 34 countries
worldwide using a fleet of 23 aircraft. Malév was a member of the Oneworld alliance until it ceased operations, having joined 29 March 2007.
Malév had begun modernisation with the introduction of the first western aircraft, a Boeing 737-200 on 18
November 1988. The last Soviet-built Tupolev Tu-154 aircraft was withdrawn from service in 2001. In 2003,
Malév began replacing its Boeing 737 Classic aircraft with 737 Next-Generation planes. In some period MALÉV
had up to 5 Fokker-70 aircrafts to accommodate short-haul routes. At the end of its operations Malév had a
fleet of 18 Boeing 737 Next Generations, as well as 4 Bombardier Dash 8 Q-400s for short-haul routes. Earlier
Malév had two B767-200ER aircraft as well for transatlantic flights.
At the end of its operations Malév had the following fleet:
Table 1 MALÉV's fleet at the end of its operations
Type Pieces
BOEING B-737-600-800 18
DHC-8-402 4
BOMBARDIER CL-600-2B19 1
Total 23
Malév was generating 40% of the total traffic at Budapest Liszt Ferenc Airport in the recent years; however in
February of 2012 it went bankrupt and ceased operations. Hungary has no “National Airline” or “Flag Carrier”,
however the competition has started to cover that 40% by other airlines partially already operating in Budapest
and by new airlines. The most aggressive airline Ryanair Ltd. expressed its intentions to open a new base in
Budapest and to station five aircrafts here.
Malév’s fleet was continuously serviced by the Aeroplex of Central Europe Kft., which is located at the Budapest Liszt Ferenc Airport.
The other major airline operation from Budapest as its base airport is Wizz Air Hungary Airlines Ltd. The airline
was established in September 2003. The first flight was made on 19 May 2004 from Katowice, 19 days after
Poland and Hungary entered the European Union and the single European aviation market. The airline carried
250,000 passengers in its first three and a half months, almost 1.4 million passengers in the first year of
operations and to date, 10 million passengers. In 2007 Wizz Air carried 2,9 million passengers on its Polish
routes. Since the bankruptcy of Malév Hungarian Airlines on the 3rd of February 2012, Wizz Air can be considered as being the biggest airline operating from Hungary.
In 2011 Wizz Air carried 11 million passengers (15% more than in 2010), in this 4.2 million passengers on
Polish routes (it´s only 2% more than in 2010). In recent years Wizz stopped developing network of
connections from Poland and open new bases in Romania, Lithuania and Serbia, however Poland is still the largest capital market for Wizz Air.
Table 2 Wizz Air's fleet
Type Pieces
AIRBUS A320-233 6
AIRBUS A320-233 25
Total 31
Wizz Air’s fleet is continuously serviced by the Lufthansa Technik Budapest.
Travel Service, a.s. (1997), an airline company, is a leader in the charter flight market in the Czech Republic,
Slovakia, Hungary and it also has a significant share in Poland. In addition to charter flights, since 2004 Travel
Service has been operating regular flights under the SmartWings brand. Majority of the airline’s fleet is
registered outside of Hungary; however it always has one or two aircrafts registered in Hungary too.
Travel Service has arrangement with the Aeroplex of Central Europe Kft.
The airline currently operates the following types:
Table 3 Travel Service's fleet
Type Pieces
Boeing 737 – 500 1
Boeing 737 – 800 1
Total 1
Competitors
Aeroplex of Central Europe Ltd. (ACE)
The company started its operations in July, 1992 to provide full range of high quality technical services to its
customers on the base of former MALÉV maintenance facility. One of the main customers of the company was
Malév and its fleet. Beside Malév major customers are Air Europa (Spain), Air Berlin (Germany), Travel Service (Hungary) and Norwegian Air Shuttle (Norway).
Aeroplex of Central Europe Ltd. (ACE) is an independent MRO within EU (providing full technical support for
various aircraft types in Budapest). The company has provided full technical support for MALEV Hungarian
Airlines from 1992 till 2012 (B767, B737CL/ NG, Q400 fleet of aircraft). Although its main location is in
Hungary, Budapest Liszt Ferenc International Airport the company has also additional locations in Ostrava, Czech Republic and Stavanger, Norway.
Owing to the fact that ACE's engineers speak both the Russian and the English languages, understand cultural
preferences and are able to offer services at competitive prices, they perform services for several other FSU countries.
ACE's skilled team provides prompt and professional ground technical services to airlines operating to Budapest Liszt Ferenc International Airport.
Production availabilities are
Daily Production hours in total 1500 hours/ day and
Daily Production hours per line (per aircraft) 300 hours/ day.
ACE carries out base maintenance activities, repair and overhaul of Boeing 737-200/-800 up to and including D
check, Boeing 767-200, -300 up to and including C4+S4C-check, B757-200/300 up to and including C check, A320 family up to and including C-check and Fokker 70/100 up to and including C check.
Services:
Routine inspections according to the customers' program:
aircraft survey
troubleshooting
unscheduled major repairs
component replacements and repair
modifications
implementation of corrosion prevention and control programmes
incorporation of ageing aircraft programmes
avionics upgrades
interior refurbishment
non-destructive testing
aircraft sheet metal work
quick engine changes
aircraft weighing
conveyance-acceptance of newly leased aircraft
and other services related to hangar maintenance
ACE carries out all aspects of line maintenance operations at Budapest Liszt Ferenc International Airport and occasionally at outside stations.
Line maintenance
B737 / 747 / 757 / 767, A300/A320 family, F70/100, CRJ
Base / heavy maintenance
B737 CL/NG up to and incl. D-check
B757 up to and incl. C-check
B767 up to and incl. 4C+S4C check
A320 family up to and incl. 8C check
F70, F100 up to and incl. 3C-check
Bombardier CRJ 100-200 up to A-check
Bombardier Q400 up to A-check
The company also offers
Limited Painting Capability
Component repair
Engineering Services
Maintenance Planning Services
Logistics Services
Airline start-up support
Calibration Services
This includes:
field operation
Routine inspections according to the customers' program
rectification of defects and pilot reports
component replacements
damage repairs
spare parts support and most other services specified in the IATA Technical Ground Handling
Agreements.
A variety of workshops designed to support the Base and Line maintenance enhances the effectiveness of our maintenance services, and reduces the aircraft downtimes.
These workshops include:
Composite repair
Paint - external paint repairs on the aircraft; in the workshops painting of internal parts, wheels, brake
and other aircraft components
Computer cutting of decals
Machine - bearing and bushing replacements of aircraft; manufacturing of parts close tolerance elements
in the workshop; installation of parts and close tolerance elements into the aircraft; manufacturing
works for wheel and brake assy repairs; heat treatment for steel and light metal parts
Sheet metal repair
Carpenter shop
Interior shop
Paint shop
The shops necessary for the accomplishment of additional activities associated with aircraft maintenance are
located next to the hangars. This is a one-storey building with an area of 270x48 and 116x48 metres. There is
hot water central heating system in the shops and they are furnished with systems ensuring the prescribed relative humidity content and air-conditioner.
Approvals
As an FAA and EASA Approved Maintenance Organisation, ACE has a vast range of experienced personnel and
an extensive array of tooling and support equipment. Every year ACE again and again undergoes a thorough
evaluation and assessment for the renewal of FAA and PART-145 certificates.
List of certificates:
FAA PART 145 #A36Y434J
Bermuda CAA Certificate
EASA PART 145 HU.145.0001
Russian Authority Approval for Budapest Station
New projects and plans
1. WIFI installation in Stavanger (Norway) and in Budapest
2. Extending the line maintenance capability in Budapest 3. Establishing a new line station in Bishkek (Kyrgyzstan)
The full list of customers serviced by ACE is provided at Annex II - Aeroplex of Central Europe Ltd. (ACE) customers of this document
Hungarian Joint Venture Lufthansa Tecknik Budapest
The Hungarian Joint Venture Lufthansa Technik Budapest was founded by Lufthansa Technik A.G. (85 percent)
and Malév Hungarian Airlines (15 percent) in 2000. It is part of the international aircraft overhaul network and
has specialized in the overhaul of narrow-body aircraft, the Boeing 737 classic NG and the Airbus A320 family.
The young company is based at the Budapest International Liszt Ferenc Airport. A role model is sister company
Shannon Aerospace which has successfully been overhauling short and middle range aircraft since 1992. The
Irish business model has been transferred to Lufthansa Technik Budapest one-to-one. Nowadays Lufthansa Technik Budapest is operating successfully in the market and is continuously winning new customers.
In 2009 the 15% share was taken over by Budapest Airport Plc.
Facility
Lufthansa Technik Budapest owns a state-of-the-art hangar with two docks.
In the hangar with 6,000 square meters two aircraft can be overhauled simultaneously and two additional can
undergo a lighter check. In both docks aircraft can be painted on the spot without being pulled into a special
painting hangar, saving time and money. A state-of-the-art ventilation system avoids paint being splashed on
surrounding workshops. Also it keeps dangerous gases from being emitted into the atmosphere. Numerous
workshops, for example for non destructive testing, are located on the company premises with 2,783 square meters.
Customers
More than 150 heavy checks have been performed for 15 airlines at Lufthansa Technik Budapest since the hangar's opening. Their customers are coming from the following countries:
Austria
Denmark
Germany
Greece
Hungary
Italy
Russia
UK
Services
Base maintenance
Lufthansa Technik Budapest specializes in performing heavy maintenance checks (C and D Checks) on Boeing
737 Classic, 737 NG (from 2007) and Airbus A320 family aircraft.
In the hangars up to four aircraft can be overhauled simultaneously.
Lufthansa Technik Budapest employs over 350 highly qualified people, who are mainly trained in Hungary and
at Shannon Aerospace and deliver premium product. More than 15 engineers and about 255 mechanics overhaul about 90 aircraft per year.
Line Maintenance
Currently, Lufthansa Technik Budapest provides Line Maintenance services for Lufthansa as well as for Central Europe's largest low fare airline, Wizz Air. The number of line maintenance partner will raise in the near future.
Approvals
EASA Approval
FAA Approval
Nigerian CAA Approval
Bermudian DCA Approval
Ukraine Approval
Hungarian Aircraft Technology &Service KFT.
With over 10 years experience, provides high quality service for the general aviation. The company’s licensed
engineers are able to rebuild even historical aircraft and conduct major structural and avionic modifications.
HAT&S has been evolved to provide services across the complete spectrum of aircraft maintenance, CAMO
airframe & engine maintenance, component repair and overhaul. As a special service the company offers high
quality electrostatic painting and interior refurbishing.
The company is private owned and fully independent. It has its head office based at MEIDL airport
Fertőszentmiklós Hungary (LHFM) and one extended maintenance facility in Ihtiman-Bulgaria (LBIH) close to
Sofia. In the recent years the company has undergone a major investment to establish itself as an MRO. The
hangar in Fertőszentmiklós -Hungary consists of 1800 m2 heated space. Additional 1000m2 are available at the subsidiary in Ihtiman-Bulgaria.
The company’s spare parts stock consists of around 3500 parts.
Approvals
The company has approvals Aircraft Engine Components Spec. Serv. (A2 B1, B2 C3, C5, C13, C20 and D1).
Continuing airworthiness management
The company is an EASA Part M Subpart G Continuing Airworthiness Management Organisation (CAMO) holding
Subpart I privileges to issue/ re-issue Airworthiness Review Certificates to a wide range of aircraft for both private and commercial air transport operators.
Aircraft engines overhaul
HAT&S is EASA PART 145 certified repair station (HU 145.0089) specializing in the overhaul and repair of
engines and engine accessories. The company has the in-house capabilities to overhaul most engine components.
Every HAT&S Aircraft Engine Is:
Produced to factory new fits and tolerances for long term durability.
Built using genuine original equipment manufacturer replacement parts, with limited exceptions.
Cylinder options: Factory new.
Overhauled in compliance with all FAA Airworthiness Directives and Manufacturer Service Bulletins.
Inspected, reconditioned and assembled by skilled technicians with years of experience working on
piston aircraft engines.
Rotating parts are precision balanced statically for smooth operation. All parts are individually painted or
alodined for longer wear and improved appearance.
Covered by complete parts and labour WARRANTY 6-Month/500 hour or 12 Month/1000 hour full warranty.
Rebuild of historical aircraft
In the company’s hangar the work has started on one North American T-28 and will continue on many other
historical aircrafts, like Messerschmidt Bf 109G etc. The company is able to offer large quantity of different
historical & military aircrafts. The restoration is in cooperation with Legendary Aircraft sro. which is fully
integrated to Hungarian Aircraft Technology & Service Llc.
Painting
The HAT&S uses the Graco electrostatic paint system, for production of top painting quality. The process
includes complete disassembly of all removable components, absolute removal of all existing paint and
corrosion, and expert application of corrosion protection, primer, basecoat, design elements, and clearcoat
(optional). The standard warranty is two years and clients who choose the clear coat option double their paint warranty to four years.
HAT&S Paint Specifications:
HAT&S utilizes state-of-the-art materials. Only AKKZO NOBEL products are used throughout the aircraft
painting process, and approved aircraft finishing systems are adhered to. The following represents a partial list of materials and procedures used:
All windows, glass, plastic, boots, antennas and delicate parts, etc. are covered with 3M aluminium foil
tape (heavy grade) to insure protection throughout the aircraft painting process.
Chemical stripping using only aircraft-grade chemicals
High pressure and high temperature wash
Removal of control surfaces, inspection covers, fairings, moldings etc., to be further processed and
painted separately. Reassembly is done using stainless steel fasteners.
Full airframe inspection
Acid etch of all aluminium done by hand.
Two coats zinc chromate primer, two-part, epoxy primer with zinc Chromate interbonded is used.
Fiberglass parts are refinished.
AKKZO NOBEL aircraft paint is applied as a final finish.
Color striping is done by special technique.
Computer generated masks are used for all registers.
Control surfaces are balanced using factory specified equipment and specifications.
As a part 145 repair station, a final quality inspection is completed.
Aircraft interior
At HAT&S Interiors work is approved by EASA "minor change approval", and is part of the final documentation.
Aircraft Structure Repair
Services:
damaged aircraft repair,
complete restoration,
structural alterations,
improving aircraft performance with the installation of Wing-X STOL wing extensions, wortex generators,
speed kits etc.
engineering documentation,
EASA certification.
Avionics installations
Installations testing and certification carried out in accordance with EASA regulation. For bench repair the company has Contracted approved repair shop.
The company complete all required EASA paperwork & MINOR CHANGE APPROVAL, logbook entries, weight and balance revisions etc.
Complete new instrument panel installation
Available for sale and install avionics equipment:
Intercom Systems
Nav/Comm's
GPS,GNS
HSI Systems
Transponders
Altitude encoders
Engines monitoring
Multi-Function Displays
Autopilot Systems.
ELT 406 and more
Centro-Plane LTD
The company was established in 1997 by private persons in Hungary. The company has owned only one Cessna 150 and since then the number of plains grow to seven.
The company has started the operations with pilot training, but since then they have successfully implemented aircraft operations and maintenance as well.
The Centro-plane is based in Budaörs, which is a rather long grass airfield close to Budapest, the capital of Hungary. The company offers PPL, CPL, IFR, VFR trainings.
The small, but efficient organisation performs reliable flight operations and provides maintenance services not only to their own fleet, but several other aircrafts as well.
Continuous airworthiness maintenance
Part-M subpart G
The company has created an organization which, based on the current legal environment, can operate and
maintain C-150/152/172/177 and PA-28 aircrafts. In the last couple of years they have extended their licences to other types as well, like C-210, Extra 330L and Taifun17E.
Centro-plane have established the operation control organizations for JAR-OPS 1 AOC, OPS 1M, by 2002. The
company have successfully applied for the Par M subpart G licence for aircrafts below 5700 kg MTOW, for the
type C-150/152/172; PA-28 and P-68C. Since 2003 they are continuously upgrading their maintenance processes with effectiveness analysis.
Government Agencies/Institutions - government industry programs around this
The National Transport Authority supervises the Hungarian transport sector. Within that the Directorate for Air
Transport deals with all the aeronautics, aviation related organisations (incl. manufacturers and operators) and
it supervises the Hungarian MRO organisations.
Market and Sector Challenges (Strengths and Weaknesses)
Strengths and weaknesses of the sector in the market, including information specific to SMEs:
The Hungarian MRO market consists mostly of SMEs provide maintenance for limited number of locally owned
aircrafts used mainly for sport, recreational and agricultural purposes at small airbases. There is a need for
industry consolidation for these small MRO companies in the middle run to remain competitive. On the long
term they have a limited chance of development and therefore they have a little chance for survival as there is
no solvent demand for further expansion.
Other small MRO organisations managed to show themselves on the international/national market providing
more sophisticated services. They are constantly evolving as trying to introduce new services and find new customers. Their survival and even growth have better likelihood.
Major foreign competition (MNEs operations) in the sector and in the market and the projects and sub-sectors in which they are focussed
The two main competitors on the Hungarian market in the field of MRO are the Aeroplex of Central Europe Ltd. (ACE) and Lufthansa Technik Budapest.
The companies are located in the hangars (2-2) at the Budapest Liszt Ferenc airport, but have different range of
customers. While the Lufthansa Technik Budapest operates as usual without known financial problems the
Aeroplex have a problem with the fall of Malév which was its main customer in line maintenance.
However the base maintenance part of the Aeroplex’s business is seems to be intact and the liquidator of Malév
has to decide how to proceed with the former daughter company.
The fall of Malev has negative consequences for the whole Hungarian economy due to the lack of a hub airline
for Budapest Airport and missing some of the flight connections to some smaller destinations. However it also
provides an opportunity for investors as Malev daughter companies have a well skilled workforce and an
opportunity to grow after their financial background is settled. As Aeroplex maintained its market share before Malév’s bankruptcy, it presents an excellent opportunity for a new investment.
Key Opportunities
Type of Opportunities
There is a possible opportunity to establish a joint venture with or direct purchase of Aeroplex Llc. owned by
bankrupt MALÉV Hungarian Airlines. The company has a well known brand name, good set of clients, but their future outlook is a question mark at the moment due to the bankruptcy of the mother company.
Recommendations to Canadian companies on where/how to do business in the market
The Aeroplex is a well established long-term running MRO company with established customer range. Despite
the fall of Malév its still has the potential for the further development. Although it’s further existence lays in
hands of the liquidator of Malév it seems that the one of the likely outcomes is that the liquidator decides on
selling the Aeroplex as an individual company. Most probably the workforce will be cut again by another 150,
but the Government is strongly committed to save Aeroplex since it is needed to relaunch a new national carrier.
However a good JV partner would be needed to improve its competitivness and retain existing third party customers
Other smaller companies are also could be considered as good investment points, but they have different set of customers and need a long way to go for reaching considerable size.
The Hungarian Aircraft Technology & Service Llc. (HAT&S) is in the business for 10 years already and has a
considerable reputation. HAT&S is manly working with the general aviation and have a great potential for the
further development.
Key Contacts
Contact list can be found in Annex III.
Organization
The list of main MRO organisations can be found in Annex I.
List of abbreviation
ACE : Aeroplex of Central Europe
CANNAPE : Canadian Networking Aeronautics Projects for Europe
EACP : European Aerospace Cluster Partnership
GA : General Aviation
HAC : Hungarian Aerospace Cluster
HAIF : Hungarian Aviation Industry Foundation
HATP : Hungarian Aerospace Technology Platform
UAS : Unmanned Aerial System
UAV : Unmanned Aerial Vehicle
Annex 1 - List of aeronautics related companies
MRO
ADMATIS Kft.
Aerometal Kft.
Aeroplex of Central Europe Kft.
Agro-Aero 2000 Kft.
Avicraft Kft.
Base Kft.
Centro Plane Kft.
Farnair Hungary Kft.
GE Engine Services, Aviation
Hat&S Kft.
JET STREAM Légiforgalmiés Légijárműjavító Kft.
KFKI
Lufthansa Technik Budapest Kft.
Mészi Air Service Kft.
Multiproject Kft.
Nyír Air Service Kft.
PANNON AIR SERVICE Légi Szolgáltató Korlátolt Felelősségű Társaság
Produktum Kft.
Manufacturers
ABF Bowdentechnika Kft.
ADMATIS Kft.
Alcoa Fastening Systems
ANTON KFT.
ARRABOCAD Kft.
Avana Industries Kft.
Aviatronic Kft.
HM Arzenál Elektromechanikai Zrt.
Fondation Bay Zoltan pour la recherche appliquée
BL Electronics Kft.
Bonn Hungary Electronics Kft.
Borsodi Műhely Kft.
Université technique et des sciences économiques de Budapest, groupe de recherche sur l’espac
CAE Engineering Kft
Certa Kft.
Cooptim Ipari Kft.
Corvus Hungary Kft.
Dendrit Kft.
Dioferr Kft.
Eltec Holding Kft.
EMP Elektro-Metall Paks Kft.
Ental Kft
Flytech Kft.
Gamma Technical Corporation Kft
Gravitas 2000 Kft.
Halley Kft.
Académie hongroise des sciences (HAS), département des céramiques et des nanocomposites
Hilase Kft.
HM Arzenal Kft.
Idea Aircraft Ltd.
IT Ware Kft.
Lasram Engineering Kft.
Macher Kft.
Meshining Engineering Kft
Multiproject Kft.
Ostorhazi Kft.
Produktum Kft.
R&D Ultrafast Lasers Kft.
SGF Kft.
Simplesoft Kft.
Sky Soft Kft.
Technoplast Prototyping Kft.
TKI-Ferrit Kft.
Varinex Zrt.
Willisits Engineering Kft.
Zoltek Zrt.
R & T
ADMATIS Kft.
ANTON KFT.
ARRABOCAD Kft.
Fondation Bay Zoltan pour la recherche appliquée
Bonn Hungary Electronics Kft.
Borsodi Műhely Kft.
Université technique et des sciences économiques de Budapest, département des aéronefs et des
navires
Université technique et des sciences économiques de Budapest, département de l’automatisation du
contrôle et des transports
Université technique et des sciences économiques de Budapest, département du génie des polymères de
la faculté de génie mécanique
Université technique et des sciences économiques de Budapest, groupe de recherche sur l’espace
C3D Engineering Kft
CAD-Terv Kft.
CAE Engineering Kft
CFD Engineering Kft.
eCon Engineering Kft.
Eltec Holding Kft.
Ental Kft
Gamma Technical Corporation Kft
Académie hongroise des sciences (HAS), département des céramiques et des nanocomposites
IT Ware Kft.
KFKI
MTA SZTAKI DSD
MTA SZTAKI SCL
Optxware Kft.
Pannon University OkoRET Spin-off Zrt.
Rea-Tech Kft.
SGF Kft.
Sky Soft Kft.
Slot Consulting Kft
Technoplast Prototyping Kft.
TKI-Ferrit Kft.
Airlines
Base Kft.
CITY LINE
Malév RT
TRAVEL Service
WIZZ AIR
Engineering
ARRABOCAD Kft.
C3D Engineering Kft
CAD-Terv Kft.
CFD Engineering Kft.
Diehl Aircabin GmbH
eCon Engineering Kft.
Rea-Tech Kft.
Willisits Engineering Kft.
Annex 2 - Aeroplex of Central Europe Ltd. (ACE) customers
Line maintenance
Aer Lingus
Air Berlin
Air Europa
Air France
British Airways
Cargolux
Channel Express/Jet2
CSA Czech Airlines
Delta Air Lines
Deutsche Lufthansa
Egypt Air
El-Al
Eurowings
Finnair
HAINAN Airlines
KLM
KLM Cityhopper
LOT Polish Airlines
Lufthansa Cityline
LUXAIR
SR Technics EasyTech
SWISS Int. Air Lines
TAP Air Portugal
TARM
Travel Service
Tunis Air
Turkish Airlines
UPS
WIND JET S.P.A.
Base maintenance
Aerosvit Airlines
Air Berlin
Air Europa
Air Kazakstan
Air One
Air Plus
Air Slovakia
Alitalia
Alpi Eagles
Avigenex
Blue Panorama
CSA Czech Airlines
Futura International Airlines
KrasAir
Lithuanian Airlines
Malev Hungarian Airlines
Royal Air Force (GB)
Sky Airlines
Sky Europe
Trade Air
Transaero Airlines
Travel Service
Turkmenistan Airlines
Ukraine International Airlines
[1] The Government of Canada has prepared this report based on primary and secondary sources of
information. Readers should take note that the Government of Canada does not guarantee the accuracy of any
of the information contained in this report, nor does it necessarily endorse the organizations listed herein. Readers should independently verify the accuracy and reliability of the information.