A drive around the Podkarpackie Voivodeship region of south-east Poland from Rzeszow International Airport – which has the second longest runway in Poland and is the easternmost airport in the EU – illustrates why this part of Poland has been dubbed the ‘Aviation Valley’.

 The region has industrial parks housing plants for Munich-based MTU Aero Engines, New York-based helicopter manufacturer Sikorsky (which in March completed final assembly of the first S-70iTM Black Hawk, the international version of the Black Hawk used by the US Army), Connecticut-based aircraft engine company Pratt & Whitney and RCL Industries, a subsidiary of UK-based CAV Aerospace. With other international aerospace manufacturers such as Hispano-Suiza, King & Fowler, Avio and Goodrich also having invested in the manufacturing and R&D sectors there, it is little wonder that Rzeszow and the rest of the region, which borders both Ukraine and Slovakia, is fast becoming one of the most important aviation hubs in Europe.

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 Aviation Valley – where 90% of the Polish aerospace industry is based – has grown from 18 companies in 2003 (when the Aviation Valley Association was created) to 83 companies today, with the industry now employing 22,000 workers, up from 9000 in 2003.

 Last year, the aerospace industry generated more than $1bn for the Polish economy in exports, helping to make Poland the only EU country to achieve positive growth in 2009. According to fDi Markets, more than $1.08bn was invested in greenfield projects in the Polish aerospace industry from 2003 to 2008; in 2003 $60m was invested and in 2008 (the last recorded investments on the monitor) $428m was invested in the country as a whole.

 Andrzej Rybka, the managing director of the Aviation Valley Association, says the region is hoping to transform itself into one of Europe’s leading aerospace hubs – it is the first and largest aerospace cluster in the central and eastern European region.

 “After a painful privatisation process in the 1990s, the industry really began to take off at the beginning of this century,” says Mr Rybka. “The chances are that if you have flown on an aircraft recently, part of that aircraft was manufactured here in the Rzeszow region.”

Aerospace heritage

 The growth of the aviation industry in the region over the past decade is no anomaly; the Rzeszow area has been a hub for aerospace since the 1930s. At that time it was chosen as the locale of the country’s aviation industry partly because there was little industry there. It was believed the cluster would help with unemployment and regeneration and also that aircraft from Rzeszow could quickly be scrambled east towards Russia or west towards Germany. During the communist era, the region manufactured aircraft for its Warsaw Pact allies and, after democracy came to Poland in 1989, it was decided that the region should remain a hub for the aerospace sector.

 Since 1989, investors have been streaming to the region not only because of strong local government support but also because of national government incentives such as a 50% to 70% tax reduction.

 There are also several major infrastructure projects in progress, including a new terminal at the airport; currently Rzeszow has direct flights from Frankfurt, Liverpool, Warsaw and, in the summer, New York. The hope is that, with the new terminal, more carriers will begin flights to Rzeszow.

 Additionally, a new highway, the A4, will connect the city with Dresden in the west and Kiev in the east and with the planned S-19 express road that will connect Helsinki to Greece. Technical parks are also to be built, such as the 118-hectare Aeropolis Science and Technology Park, with plans to house biotech and research laboratories and a technological incubator that will focus on aerospace, IT and automotive research and production.

 Another benefit for Aviation Valley is that Polish labour costs are much cheaper than in western Europe; according to Adam Zolnowski, a senior advisor in PricewaterhouseCooper’s Warsaw office, well-qualified aerospace engineers in Poland earn about €1000 a month, something unheard of for a comparable position in western Europe.

 “This region has one of the best balances of low labour costs and a high-quality labour force,” says Marek Bujny, vice-president of both the Aviation Valley Association and Rzeszow-based aircraft blade manufacturer Ultratech Ltd. “Though China and India may be cheaper in terms of labour, they do not have such a long aerospace tradition, nor are they as highly educated [in the field].”

Education and training

 Education has also been a key factor in driving foreign investors to look closely at the region; it has four universities, including the Rzeszow University of Technology, which trains students in aerospace engineering.

 This academic focus played an important part in MTU Aero Engines’ move to the region. When the German company decided to make a greenfield investment in central and eastern Europe, it also looked at locations in Hungary, Romania and Slovakia. One of the factors that helped seal the deal was the range of strong educational opportunities in the region, says Krzysztof Zuzak, MTU Polska’s CEO.

 MTU’s brand new Polish plant, which designs and manufactures components such as aerospace engine blades, will employ 100 engineers in R&D by 2014. “There was in the Rzeszow region a neighbourhood of companies and universities with a high level of know-how that was [impressive],” he says.

 “Aviation Valley has been very focused on growing and there is very good coordination and balance between companies’ interests and the association’s interests.”

 Climbing up that value chain is integral for the region’s aspiration to continue to develop, so the local government has been focused on getting students interested in engineering and IT from a young age. Each weekend six to nine students from local schools can participate in a ‘university for kids’, where they learn about engineering and development through fun chemistry and physics experiments. It must be working; there are three applicants for every place in the engineering school.

 “I think our educational background and our school programmes have been a key factor for [the city’s] growth,” says Jerzy Bieniek, who handles inward investment for the Rzeszow mayor’s office. “Companies choose us over western European competitors because we offer some of the best benefits and competitive advantages on the market.”