Italian aerospace giant Leonardo is finalizing plans to establish an international joint venture for its struggling aerostructures division, aiming to transform the unit into an industrial leader. The company expects to announce the deal in July following months of intensive negotiations involving a 30-person team.
Strategic Move to Create Industry Leader
Leonardo CEO Alessandro Cingolani revealed the company is “at the end of a very long road” in forming a partnership that would expand the division’s capabilities. “We’re creating a sort of champion that will serve commercial aircraft and other major markets we don’t currently cover,” Cingolani stated, while cautioning that “the devil is in the detail” regarding final negotiations.
Persistent Profitability Challenges
The aerostructures business has faced years of financial difficulties, with recovery hopes dashed by Boeing’s slower-than-expected 787 production rates in 2023. This forced Leonardo to reduce output at its Grottaglie facility in southern Italy, which manufactures composite fuselage sections for the Dreamliner. The COVID-19 pandemic recovery failed to provide the anticipated boost to the division’s performance.
Exploring Multiple Strategic Options
Leonardo has evaluated various solutions for the unit, including a potential spin-off, before settling on the joint venture approach. The company has simultaneously sought to diversify production at Grottaglie, securing contracts for emerging programs like the Otto Aviation Phantom 3500 and Vertical Aerospace VX4, though these projects remain years away from full-scale production.
Future Growth Prospects
The planned joint venture represents Leonardo’s strategic pivot to reposition its aerostructures business for long-term viability. By partnering with international players, the company aims to access new markets and stabilize operations while maintaining its position in the global aerospace supply chain. Industry analysts will closely watch the July announcement for details on the partnership structure and growth roadmap.
