Aerospace makes good and bad news for the Scottish economy

14 August 2019

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The importance of the aviation industry to the Scottish economy was highlighted in two very different ways this week.

Transport minister Michael Matheson signalled the country’s intention to be at the forefront of sustainable aerospace and aviation with a fact-finding trip to Cranfield University.

Cranfield Aerospace Solutions, a university spin-out company is working on ‘Project Fresson’ with Loganair to develop the world’s first electric-powered passenger flights on island-hopping routes between Orkney and Kirkwall.

Mr Matheson saw, first-hand, Cranfield’s leading aerospace and aviation facilities including its Digital Air Traffic Control Centre, the first to be operational in the UK, and the Aerospace Integration Research Centre, a £35million partnership between the university, Rolls-Royce, Airbus and the UK Government.

Professor Iain Gray, Director of Aerospace at Cranfield University, said: “We are already seeing Scotland embracing sustainable aviation through developments such as ‘Project Fresson’ and it was a fantastic opportunity to demonstrate to Mr Matheson what more could be achieved through technological developments.”

While the minister was appraised of future opportunities for Scotland, the present was proving to be a bumpier ride for the nation’s economy.

Headwinds in the aerospace industry contributed to a £4.4million before-tax loss for John Menzies in the six months to June 30. In the previous half-year period, it the company recorded an £8.3million profit and, following the drop, its share price fell by 3.5% in early trading.

While many Scots will be familiar with John Menzies’ profile as a high street news retailer, it is principally an air logistics company and it was badly affected by the grounding of the Boeing 737 Max aircraft, which has been taken out of action following two fatal crashes.

Weak cargo volumes also contributed to the difficulties, as did the loss of some contracts in the latter half of last year.

Chief executive Giles Wilson said the company had taken several "decisive actions" to address the issues, including a cost reduction programme which is on track to deliver £10 million of savings by 2020.

"We continue to drive a company-wide focus on cost reduction, customer engagement and operational discipline, with profitable growth at the forefront of our agenda," he said.

"We have an increased awareness of our customers' needs that will ensure that we are viewed by our customers as the partner of choice and recognised for our best-in-class operational delivery."

 

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