The Business Year

Roberto Damone

ECUADOR - Transport

Flight Safety

Chairman, Aeromaster

Bio

TBY talks to Roberto Damone, Chairman of the Board of Aeromaster, on the history of Aeromaster, the aeronautics industry, and the company's prospects for growth.

How was Aeromaster founded and can you summarize its services?

I founded Aeromaster in 1989, and our principle activities are aviation maintenance support, aircraft assembly and air transport for passengers and cargo. In our industry, maintenance service provides the greatest revenue. We are currently dealing with an increase in industry taxes and are unable to expand our lines of business or pursue other opportunities in the market. We do, however, have a new business that assembles aircraft locally and have signed three new agreements with international aircraft manufacturers. We signed these agreements a year ago and are planning to begin assembly in September of this year. We are working closely with the Minister of Industries on this project, and we just signed an agreement that will give us space at both Manta and Santa Rosa airports. They are C-level airports, and we are trying to start a second business that will provide air cargo transportation from Manta Airport to the United States and Latin America. We are the only company doing this business in Ecuador, and were prompted to provide this service because of the 45% tax increase on imported aircraft and equipment. We are set to increase our employment and revenues by 100% and will directly hire around 400 people. This will help the country save around $300 million. This concerns the government directly, because right now they are paying around $800 million each year for both the military and civilian sectors combined.

How would you say the aeronautics industry will evolve in the short term?

We will need to make some amendments to local regulations during the coming years and focus on the industry as a whole, and not solely on aeronautics. We need to produce parts and assemble planes here as well, which would keep our manufacturing costs low. Our main clients will be military and flight schools, and in terms of markets, Cuba, Bolivia and Brazil. Any new clients will come through the Ministry of Industry. We do not actively search for them, but rather they look for us, because they know the market and make plans through state policies. We need to create an engineering department to certify aeronautical parts as the Civil Aviation Authority does not have any local departments that take care of this being solely concentrated on airlines. What we need is to bring in expert engineers to help the authorities; once we have them in place, we are ready to begin work. In the meantime, we will use external certifications in line with the FAA (Federal Aviation Administration), EASA (European Aviation Safety Agency) and LAR (Latin American Regulations). Assuming that we have local certification, we will be able to directly reduce cost by 25%. This market will become more attractive for foreign investment once this certification is localized. We have signed contracts with three international companies, ready to enter the market. This will mark a solid first step toward attracting other player, and there are already two prospective companies interested in joining us.

What is your prospect of growth for 2015?

Next year we will increase our gross income by 30% and will be starting cargo shipments and assembly lines.

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