The Aeronautics and Space Cluster of the Basque Country grows in employment and turnover

The HEGAN Cluster-Association reflects on a new strategic period with a focus on sustainable aviation and people

Basque aerospace industry recovers and exceeds pre-pandemic figures

The Aeronautics and Space Cluster Association of the Basque Country – HEGAN held its annual General Assembly. The event, which took place in the facilities of the Ideko Technology Centre, a member of HEGAN, was led by José Julián ECHEVARRÍA, President of HEGAN and General Manager of Aerospace and Defence of Sener who, together with Ana VILLATE, Director of the Cluster Association, presented the 2023 data, reviewed last year’s actions and presented those of the current year. At the end of the Assembly, José Julián ECHEVARRÍA passed the baton to Ricardo CHOCARRO, CEO of Aernnova, who, from today and for the next two years, will be President of HEGAN.

This meeting, the highest body of the HEGAN Association, has been used to work on the process of Strategic Reflection in which the Cluster is currently involved. This process will outline a Strategic Plan for the following period 2025-2028 that will guide the actions of the Association. All the Partners have validated the stages of the process followed to date and the deliverables, including the SWOT of the associated Sector; and have identified lines of work and the challenges in which the Association must focus on in order to provide value to the Partner in the next four years.

The figures generated last year by the 76 Cluster Members have exceeded the pre-Pandemic figures in Employment and Turnover; thus rewarding the effort that the associated entities have made over the last few years, maintaining their people, investing in their competitiveness and persevering in their positioning in the global market.

A steady route through difficult times

Last 2023 was a year in which the HEGAN member sector, hard hit by the Pandemic and the subsequent collapse of air passenger transport, finally reached and surpassed the employment and turnover figures of 2019. In that year, the series of growth that the Cluster has maintained since the beginning was interrupted, increasing, now, in global figures with respect to 2022, employment by 7.8% and turnover by 24%. With these increases, average annual growth rates of around 2% in Employment and 6% in Turnover have been re-established, resuming the trend broken in 2020 in a way that was as brutal as it was unexpected, when the Cluster suffered a reduction of -30% in turnover and -10% in employment.

These four years have been a tough road for the HEGAN Partners, requiring them to do their utmost to overcome a very complex environment: difficulties in the supply of raw materials, a major escalation in production costs and soaring inflation, an unstable geopolitical environment and tough energy and financial conditions. A path that has culminated in 2023 with the very positive figures that have been generated and which have been a reward for their efforts.

Continued commitment to People, R&D&I and Sustainability

The industry continues to demonstrate its strength and capacity for adaptation and resilience, as shown by the effort made by companies in their commitment to maintain and hire personnel and by their investment in R&D&I and resources.

Innovation, linked to knowledge and technological development, has become the driving force and differentiating element that will enable competitiveness to be maintained, as R&D&I programmes and activities not only develop new technologies and products, but also improve industrial processes, making them increasingly competitive and cleaner, and giving the sector its strategic character. As an example, in the last year the R&D&I investments of the Partners corresponded to 6.8% of sales, reaching 195 million euros in 251 different projects; thus, the sector continues to be one of the most intensive in R&D&I, with an accumulated investment in the last 10 years of 1,334 million euros and an average of 6.8% per year.

Other factors closely linked to competitiveness are training, care and protection of existing talent; we have versatile profiles both in technological skills and in other transversal skills, necessary to work in an increasingly collaborative, inclusive, sustainable and global sector. It is vital to promote scientific and technical vocations among young people, as it is they who will write the future, not only of the Sector but of Society as a whole.

Sector forecasts

In the vision of the HEGAN Cluster, “the situation of the sector has improved notably despite the great uncertainties that are still present on the world map; and we are still facing problems such as the tension in the supply chain, the lack of raw materials, the high energy costs or the inflationary process that has a direct impact on the competitiveness of the Cluster”, commented the director of the Cluster-Association.

This year 2024 will be the first year of real growth since the peak reached just before the start of the COVID-19 pandemic and, according to the latest predictions, the size of the world commercial fleet will double over the next 20 years, from around 24,000 aircraft today to around 48,000 in 2042; by that date, some 42,000 new aircraft will be needed, according to estimates by Airbus and Boeing.

In the Space sector, overall activity is set to continue to increase. In this sense, the incorporation of new figures with a clear commercial orientation, the increase in private investment, the demand for new services and operations related to earth observation and communications, and the continued commitment by the Administrations to develop new and powerful missions, have allowed growth in recent years. This increase in activity not only sustains the Sector, but also has an impact on society, by achieving a more communicated, secure and sustainable world. Euroconsult estimates that, in 10 years, almost 30,000 satellites will be launched, tripling the 10,000 satellites currently tracked on the orbit.ing-now.com website.

Good times and great challenges

2023 culminated with the news that air traffic had recovered to pre-pandemic levels. This, together with the boom in the Space sector and the appearance of new projects and programmes related to the New Mobility and the Decarbonisation of the Aeronautical Sector, has meant that the year has ended with a happy moment of activity for the Sector in the Basque Country. Similarly, the R&D field is experiencing a situation of great activity and great challenges, due to a compendium of all these variables: validity of the aid deployed to combat the crises, development cycles of considerable technologies linked to the Sustainability of processes and platforms, and new digital challenges.

This is excellent news; however, we see trends that need to be addressed, albeit from a much more positive overall perspective, given the good momentum: a handicap faced by HEGAN Partners is the tension in supply chains due precisely to ramp-ups and production increases; certain problems still with the supply and cost of raw materials and materials; competitive demands that require an effort to improve and digitise our processes and our operational excellence; and, the great concern, that of talent, which is widespread in virtually all sectors of value activity, such as our Aeronautics and Space sector. On this last point, the Cluster President commented, “the warning that we have been transmitting (lack of early vocations and difficulties in attracting, linking and retaining personnel) is becoming a real challenge due to the difficulties that the Partners are experiencing to have the right number of professionals at all levels”.

The Aerospace Cluster has recalled in its Assembly the relevant role of the Sector as an inductor of technological development and technology transfer vector to other industries, claiming its role as a driving sector as a source of wealth and value creation for society, quality employment and dynamization of R&D&I, and by becoming part of the global solution in areas of decarbonization, hybridization, electrification or neutral emissions with new fuels such as H2 (Hydrogen) or SAF (sustainable fuels for aviation).

Cluster 2023 figures

The Aeronautics and Space Cluster Association of the Basque Country – HEGAN is made up of 76 members, positioned practically throughout the entire Aerospace value chain. Members include 4 Tier1, 50 Industrial Companies, 10 Technology Centres, 5 Universities and 7 Allies. Currently, HEGAN members have a total of 168 facilities around the world, with 99 centres in the Basque Country, 41 in the rest of Spain and 28 locations abroad (Germany, Brazil, China, United States, India, Malta, Mexico, Poland, Portugal and United Kingdom).

In 2023, the Associates generated an aggregate turnover of €2,882 million at all their sites around the world. By sub-sector, Engines accounted for 51.9% of this turnover; Aerostructures accounted for 41%; Space, 3.7%; and Systems and Equipment, 3.4%. On the other hand, employment recovered once again, reaching an all-time high of 15,396 people in all its plants around the world, 5,500 of them in the Basque Country.

For its part, investment in R&D&I reached 195 million euros (86% of which corresponds to self-financing) and exports amounted to 2,223 million euros, which represents more than 77% of total sales. By country of destination, exports during this period were to the United Kingdom (29%), the USA (20%), Germany (19%) and France (13%).