Germans buy aircraft from Kraljevo - After sport flying market, Aero East Europe to enter general aviation market

When Milorad Matic decided to start building aircraft in Kraljevo, most people were watching him with suspicion. Despite the fact that he commenced production, achieved excellent results and won an Exporter of the Year Award, he must keep proving that technological innovations and high-quality products can bear a "Made in Serbia" label.

Aero East Europe is the first company in the history of Serbian aviation to manage to enter an airplane made in Serbia into the register of one of the members of the European Aviation Safety Agency and, thus, enable its use in flying schools across Europe.

So far they have been working on 115 different types of aircraft. Last year Aero East Europe launched a new airplane from the SILA (Serbian Industry of Light Aircraft) series - SILA 450 C, the lightest airplane in aforementioned series that is specially adapted to the ultralight aircraft market. With SILA 450 C, Aero East Europe is entering the general aviation market.

This aircraft is primarily developed and designed to be used for aerial photo survey, thus cutting the costs of field survey to enable multiple savings. It can also be used for the purpose of legalization, mapping and everything related to high-precision 3D aerial photos in a resolution of up to 3 cm, and it is also intended for border area surveillance, field surveillance for the purpose of fire prevention, search and rescue missions, advertising purposes such as banner towing and flyer dropping, flight training...

Milorad Matic receives the Aurea Award (Photo: ekapija.com)

The innovation, financial potential and social utility of the new aircraft have also been recognized by eKapija, while this year's Aurea jury presented the Aero East Europe company with the Investment of the Year Award last week.

The aircraft manufacturer in Kraljevo is getting ready for the largest aviation show in Europe that will be held between April 24th and 28th in Germany, where this company's new airplane will be officially certified to LTF-UL standards, which will open the European market to them.

Milorad Matic, the CEO of Aero-East Europe, says to eKapija that they spent the year 2012 working on certification and necessary attestation as well as doing the paperwork, which cost them about EUR 100,000. Therefore, 2013 should be the year of implementation of all contracted works.

- I expect us to start implementing a EUR 1.5 million agreement on the sale of 27 SILA 450 C airplanes to Germany this year - Matic says and adds that that money will be invested in the construction of a new production facility and the expansion of their aircraft plant.

Fighting the prejudice against the quality of products from Serbia, Aero-East Europe is confronting the problem of production funding as very few buyers choose to make a payment in advance.

- Since they lack trust, we are to provide bank guarantees, which is very hard to do in Serbia. For that reason we must finance production from our own resources, and you know how much this costs in Serbia - says our interlocutor.

This situation does not discourage him as he believes that his product has a great potential and after some administrative issues are resolved, they will be ready for the general aviation market.

- General aviation implies that aside from sporting purposes, airplanes are also used for the purpose of commercial flying, aerial photo survey, agriculture, training of pilots... That is a huge market - Matic says and adds that their market is Europe, stressing that they are also negotiating with prospective buyers from Australia, America and Africa.

Recalling his beginnings, Milorad Matic says that he remembers when he told the local government in 2002 what business he wanted to start that they were looking at him in amazement, probably thinking: "People have no money to buy food, who would now buy airplanes."

- It is true that not many people in Serbia want to buy our aircraft, which is why we export 99% of the production. When I started making airplanes, the local government did not have trust in our project. We have fullfilled our plans and hired between 30 and 40 people, but we are not stopping there. If everything goes as planned, we will employ another 100 to 150 people within the next two of three years. Of course, we need assistance in the form of available funds for working capital and investment in a new production facility that should be built next to the airport in Kraljevo.

Airplanes made by this company in Kraljevo are priced at between EUR 53,000 and EUR 128,000 (four-seater), meaning that their prices are 30-70% lower than those of competitive airplanes in the global market.

M.K.