Distance Between Aviation and New Space Is Not That Big

The COVID-19 pandemic has landed a heavy hit on the aviation industry. Airlines reported up to 85 percent decreases in passenger volumes at the end of 3Q20 compared to the previous year. The market will take a couple of years to recover totally. Manufacturing operations in the sector are full of layoffs, volume ramp downs and even failed mergers and acquisitions. In that scenario, FEMIA is forecasting a close to 40 percent decrease in operations for the year and growth of around 3.5 percent in the coming years, which is not bad but it is just a slice of the average yearly growth of 14 percent in the last 15 years.  
There are many companies within the sector serving the aviation market in Mexico and the situation is pushing everybody to look for alternatives to increase volumes or margins. Among the many industrial options to use installed capacity, we tend to look for “down to earth” solutions, but we should be looking to the sky, instead. Yes, miracles are always welcomed but I do not mean that; I mean up in the New Space. 

According to my good friend Luis Lizcano, managing director of FEMIA, the New Space market will grow sustainably by around 5 percent over the next seven years. If we add to that figure the 3.5 percent growth in aviation, it represents a very good 8.5 percent. Just to close on the numbers, today the two markets combined represent close to US$370 billion. Let’s challenge ourselves to get a 5 percent market share of that big cake. Our slice would represent “low goal” of US$18.5 billion. That’s not bad, and especially as I firmly believe we are well-positioned after 15 years of putting in the effort and passion and building trust among foreign and national investors. There have been many challenges, but it has also been a wonderful dream come true for thousands of people.  

Those companies already certified AS9100 and/or NADCAP do have as a big first step the understanding and the culture capable of sustaining an operation to deliver within the aerospace sector. That is already a huge part of the way covered. From there, all space customers have their own specifications and regulations but the proven ability to work under the standard is a major milestone. 

There are many special requirements to enter New Space, but Mexican components and services provided are already flying globally at any given time. Interiors, control systems, wiring, structural components, communication devices, avionics, maintenance and certification services, you name it: Mexico has the capacity to provide almost everything the industry requires. 
The industry has trained and formed a very good human workforce that understands that in the air there are no second chances and quality can never be compromised. Quality has been one of the reasons why the sector has been able to attract so many companies and direct investment in the country in such a short period of time. On the other hand, we have set the foundation of a supply chain with the skills and processes needed for the products and services able to put devices in the sky and beyond. It is true that there are still big gaps, but I would take the moment as the excuse to invest money and efforts to close the gap and fulfill specific niches that can serve both aviation and New Space. 

The installations typically needed for aerospace manufacturing operations are not simple. They range from special chemical processes and thermal treatments to controlled environments on open shop floors and clean rooms, plus access control in many cases. There are already many of these installed in Mexican operations and from my knowledge, most of them still have capacity to service new customers. The same concept applies to the installed capacity of equipment and assembly processes. Most of that capacity represented a huge financial effort and a long certification process, but that task is already completed and due to the nature of components and projects required by the New Space market, combined with the capacity to manage and introduce such new operations, it is a no brainer to look for the opportunity to fly higher. 

Mexico has a proven track record in delivering increasingly complex components, systems, engineering and MRO services at a very competitive cost, complying with the highest quality requirements and challenging schedules. It has been a tough walk to get here, but now is the time to capitalize on all those efforts that collectively have placed Mexico as one of the Top 10 suppliers for aerospace in the world. We need to recognize that there is still plenty of room for improvement and growth, but we should also re-invest in the effort and capital that allowed us to export close to US$9.5 billion in 2019. You need to learn to walk before you try to run, as the saying goes, and I do believe that we already know how to walk in the sector. It is now time to try start running. Surely, we will fall many times, but the sector has proven to be resilient enough to learn from its defeats and rise from the ashes. Perseverance and collaboration will be the key.
New Space is still a bit of a foreign term in Mexico. We are not talking about having a satellite or two, which is an achievement in itself. We are talking about creating constellations of satellites and, in fact, being able to have humans living and working on the moon to start with. To the big companies already committed to that objective, I invite you to take a look at what Mexico can offer as a supplier. To the companies already established in Mexico, I urge you to raise your eyes and look beyond our limits at the process that is democratizing space. 

Once upon a time, the Mexican aerospace industry dreamed about flying and, in fact, we took off and reached the sky. It is time to look to the moon, the stars and the New Space. It is time to book our ticket on the spaceship that will take humankind where only few dreamed but many of us would love to be: to the stars and beyond.