The Avalon Airshow: watching an industry take flight – words turning into dollars 

Mike Kalms, KPMG Australia’s Defence Industry Lead Partner, and member of the Government’s Expert Panel

Come March, comes Melbourne’s Avalon Airshow. It’s what the world’s aerospace and defence industry veterans call ‘the friendly show’. But this year isn’t like previous shows in several respects. This year, the talking has become action. Companies that spoke of good meetings, this year speak of good contracts. That’s good for Defence, good for Industry and good for Australians.

I’ve been around Defence and Defence Industry for a long time and there are a number of companies who have also been part of the scene for longer than they might care to remember. We usually only catch up at these industry events, and so this once-a-year meeting at their stand becomes a form of industry survey, or check-in.

So what are the polls saying?

Well, for companies like Cirrus Real Processing Systems, based in Sydney, the last 12 months have been positive. More positive than perhaps has been the case in the 10 years that preceded them. What’s changed? That’s harder to definitively say.

Peter Freed the owner, managing director and long-time advocate of small defence industry seems to have found a niche the local and international market values in simulation and integration. Perhaps it does take years to become an overnight success. For Peter’s team a balance of long term contracts spread across sectors and across the world have led him to be more confident than ever about his defence business prospects.

The Varley Group, with its strong NSW and Victorian footprint was also pleased to announce a $10 million investment in a US group to enable it to push Australian innovation into global markets.

Joint Strike Fighter F-35 at Avalon Airshow

At the same time Rohan Stocker, CEO of Victoria’s Marand, was showing off its Jet Strike Fighter engine trailer, now locally produced and exported across the world.

Words are turning into dollars.

Of course, this is a market and so not every participant is equally impressed with the current climate – but the Avalon Airshow poll is in and shows a trend line to the positive.

When I reflect on what the common factor is between these companies, and there are more than three seeing a return on their investment in defence, I offer the following insights:

They have all been doggedly persistent in their pursuit of relationships and opportunities. Time and effort has been invested over multiple years to be close to their client while the solution was being formed and the proposal written. Defence is not a sector for short-termism. Just like oil and gas, or the utilities sector, you need to set a multi-year timeline and be prepared to use that full schedule before the large annuity style contracts are won.

They have all found their niche and doubled-down on capabilities that support their proposition. A breadth of offerings is inevitably part of a young company’s business plan as they search for traction in the market, but in time each must focus in order to grow. All these companies know what they are famous for, and know when to let others in their supplier ecosystem take the lead.

So, another Avalon is done.  All of us that attended are now shuffling through business cards and deciding on which one might be an opportunity worth pursuing.  Perhaps the lessons of Marand, Varley and Cirrus should inform our decision-making.

Feature image

The F/A-18A Hornet puts on a spectacular performance of speed and agility for the spectators at the Australian International Air Show at Avalon in Victoria.

Photographer CPL Craig Barret:       

© Commonwealth of Australia, Department of Defence

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