The global aerospace sector has taken a hit during the Covid-19 pandemic, but although plenty of turbulence lies ahead, Wallonia’s drones industry shows there are glimmers of hope.

Located in the French-speaking part of Belgium, Wallonia benefits from its geographical position in the heart of Europe. Firms located here say the business network is huge, well-connected and skilled and that they are easy to reach from all over Europe thanks to the region’s airports and roads. 

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Wallonia’s aerospace industry grew out of the metallurgical and mechanical skills that it acquired in the 20th century. According to David Praet, director of International Relations at aerospace cluster Skywin, the region is home to 70% of Belgium’s aerospace industry and supplies 5% of the Airbus range’s structure and equipment as well as providing parts and services for firms such as Boeing, Bombardier and Embraer. 

Most aerospace firms and institutions in Wallonia have a relationship with Skywin. This cluster covers the aeronautical, space, drone, defence and engineering industries and uses four action levers: R&D, investment, training and internationalisation. In 2019, Skywin’s  members employed 7,800 people and generated a turnover of €1.85bn. Its 158 members include 111 SMEs, 15 large companies, seven universities and high schools, 12 research centres and two training centres. Between 2007 and 2019 it was responsible for coordinating 85 projects, including 54 R&D projects worth €217m, 21 investment schemes valued at €33m and 10 training projects totalling €15m.

Incentives

The region offers several incentives and subsidies to entice investors. “Regional structural funds typically provide about 10% investment funding for a large company,” says Ashley Lyon, aeronautics, space and ICT expert at Invest in Wallonia. “Additionally, corporate tax for incoming companies has been cut to between 20-25%, depending on the size of the firm. And there are reductions on the fiscal side, such as notional interest reduction where a certain percentage of corporate base tax is cut, and this has helped encourage major firms to invest in Belgium.”

In recent years, Wallonia has reported several local successes, including the unveiling of the Galileo Integrated Logistic Support (ILS) centre in the Galaxia business park in Transinne; the opening of new premises for Sonaca Aircraft at Namur airfield, including a 2,000 sq m assembly hall; the investment in a new EASA cybersecurity centre in Redu; and the creation of Air Belgium, a new airline based in Corbais, Wallonia.

Small to large

Big names involved in the region’s aerospace sector include Sonaca, Safran Aero Boosters and Sabca. “Behind these trees hides a very dynamic tier three, tier four forest,” says Patrick Mascart, manager at autonomous systems incubator, ID2Move. “There are more than 100 highly skilled SMEs providing parts for flight systems, including five-axis manufactured bolts and shock absorbing springs.”

“One of Wallonia’s innovation successes is Sonaca 200,” he adds. “This is a spin-off of Sonaca, which is developing a two-seater aircraft that combines in-flight performance with reduced operational costs. There’s also Esnah, which created Skylink to support decision makers with advanced business intelligence to offer autonomous smart tracking.”

Start-ups and innovation

“Start-ups can interact with the local ecosystem,” says Mr Lyon. “One of our strengths is that companies here have multiple customers, which helps mitigate risk in times of uncertainty, unlike in France or Germany, for example, where the sector is largely built around Airbus.”

Innovation and opportunities for aerospace start-ups and SMEs is promoted in the region by organisations such as ID2Move, which was set up by Brussels University and the Intercommunale du Brabant Wallon (InBW) 

“ID2Move is a centre of excellence for autonomous air/ground/underwater systems with the most equipped and diversified test zones in Europe. It offers accommodation for freelancers, SMEs, big companies and universities,” says Mr Mascart. “ID2Move’s role is to offer ground and air indoor and outdoor test zones to any company with a drone or other autonomous system, to support new projects and growing companies, and to welcome companies in the drone value-chain by renting out offices, co-working spaces and meeting rooms.”

The drones sector is becoming more important to the region, and there are now 300 drone companies developing their businesses here. One of the most well known of these is ALX Systems, which provides unmanned and autonomous drones based on breakthrough technologies and AI.

One of the challenges for drone start-ups in the region is scaling up their small two-three employee local businesses to something that can compete globally. “To do so they can use our international network,” says Mr Mascart. “We organise company missions abroad with the assistance of Awex (Walloon Export Agency), Skywin and networks such as Enterprise Europe Network (EEN). Before selling to new markets, start-ups can be coached and test their product or service in dedicated areas and get funding.”

Covid-19 support

Having been hit hard by the financial consequences of the pandemic, the aerospace sector is receiving support from the government of Wallonia, Federal Government and Ministry of Finance. “The initial package of measures on offer included €233m to help companies and self-employed workers affected by the closures,” says Mr Lyon. “The Wallonia government has also mobilised an additional €285m in compensation for firms that have experienced a substantial decrease in their activities.”

He says only time will tell how fast local companies will bounce back after the pandemic has subsided. “The local industry was working fine up until this year’s crisis. Some sub-sectors will bounce back much faster, but others have been hit at both ends of the spectrum: they have difficulty accessing some supplies for manufacturing while borders are closed, and many direct or end customers have reduced operations, so it’s a snowball effect for many in this industry.”

Mr Mascart believes the drones industry is a ray of hope for a sector that is on its knees. “Because there are fewer airplanes in the skies at the moment, there is less risk when it comes to operating and testing drone technology,” he says. “We have a lot of companies that want to test their applications to sell to countries that have been hit by the pandemic so they can distribute medical equipment to villages. Drones and autonomous systems can play a major role in the fight against Covid-19. It’s time for Europe to understand that and for us to go forward and operate.”

In association with Invest in Wallonia. Reporting and editing were carried out independently by fDi Magazine.