Airspace Asia Pacific was the first region-focused spin-off of Airspace World and with the region emerging as a strategic growth area, Indra’s presence created a useful opportunity to examine how a global supplier adapts to regional requirements.
In this context, I sat down with Enrique Castillo, the company’s Global Sales Director for Air Traffic to explore how the group applies its strategy by combining organic growth and acquisitions to support customers through regional deliveries.
We started by discussing what makes Asia Pacific different from the rest of the world. Enrique insisted that it is not possible to characterise such a large region and that the world is different country by country, within each region:
“When I was in charge of Latin America, people would say, “Latin America works this way.” but Chile and Mexico, for example, have very little in common. The same applies everywhere. Asia-Pacific is very diverse: Vietnam and India are completely different markets. So you have to adapt to different cultures and ways of doing business. We try to do that through local teams, local people, and by being very flexible – which I think we are good at.”
Recent achievements in the region
Enrique highlighted recent achievements for Indra in the Asia Pacific region. Historically, India has been a major customer, with around 80% of Indian airspace being controlled by Indra systems, which are currently undergoing renovation.
Two years ago, the company had a lower market share in Asia Pacific compared to other parts of the world, and consequently announced its intentions to make it a major growth region. Since then, Indra has passed the acceptance tests for the new Area Control Centres in Ho Chi Minh City and Jakarta and is deploying digital towers in Malaysia. Those projects show how the Asia Pacific region moved from being a growth ambition to an operational success for the company.
The US strategy
While Asia Pacific represents one pillar of Indra’s growth strategy, recent developments in the United States illustrate how the group is active globally. The company is one of the three suppliers selected by the Federal Aviation Administration (FAA) in the US, as part of the Surface Awareness Initiative. The company is also shortlisted for the ambitious radar replacement programme and when I told Enrique of my surprise that the FAA selected a non-US company, he went into the details of the group’s structure and clarified an important point: “We don’t intend to deliver everything from Europe – we already manufacture radios in the US, and we’ve announced the construction of a new radar factory there. So while the parent company is European, our US operations are fully American.” Indra Group USA is a 100% American company, with its own website and Indra announced a 50$ million investment in the USA.
An important aspect of the FAA’s modernisation programme is the replacement of over 600 radar installations within three years. This raises many questions about the required manpower, both by the supplier and the FAA. Enrique confirmed that while it would seem unreachable a year ago, he’s confident that Indra is now ready for the challenge. The company already has plans in place, including supply chain strategies and new manufacturing capabilities.
Building a true one-stop shop, including UTM
We ended our discussion by looking at Indra’s vision to be a one-stop shop for ATM and Communication, Navigation and Surveillance (CNS). Enrique clearly stated that Indra has two ways to build a full product portfolio: “Sometimes we improve products internally; other times, we acquire the best available solutions.”
This approach would not be complete without including solutions in the Unmanned Traffic Management (UTM) domain. Indra’s ATM and UTM solutions are fully integrated and the company has delivered these systems in Spain. The company is also very active in the SESAR initiative in Europe. A major UTM contract outside of Europe is expected to be announced soon, which would make Indra one of the strongest players globally. Here again, the company’s size and its long established past is relevant. “UTM is a completely new business model, unlike ATM, which has well-established global standards,” Enrique explained. “Early on, many startups expected explosive growth, backed by venture capital, but that hasn’t materialised yet. Now we see many customers turning back to larger, established players. That’s an opportunity for us. Regulation is still fragmented, but over time it will become more homogeneous.”
