Middle East Fleet Drives MRO Expansion
Jan 22, 2009
By Frank Jackman/AviationWeek.com
DUBAI--Middle East airlines and MROs are feeling the effects of the global financial crisis, albeit not as acutely as carriers and service providers in other parts of the world, but the long-term outlook remains strongly positive, according to a parade of speakers at AVIATION WEEK's first MRO Middle East Conference & Exhibition.
Repeatedly cited as positive indicators for the MRO market were the strength of the region's flag carriers, such as Emirates Airlines, Etihad and Qatar Airways, the planned growth of relatively new players, such as Jazeera Airways and Sama, and the expected emergence of others, such as FlyDubai and the billions of dollars being poured into the region's infrastructure, particularly in the UAE.. The region's airline fleet is expected to number more than 1,000 aircraft within 15 or so years, according to Iain Lacklin, divisional SVP of Emirates Engineering, the maintenance division of Emirates Airlines.
That expected growth, of course, makes the Middle East an attractive opportunity for local and international MRO providers. Emirates Engineering, with seven A380-size hangars, is focused exclusively on the needs of Emirates for the next several years, but that could change by the middle of the next decade.
Abu Dhabi Aircraft Technologies (ADAT) is building a new three-bay A380 size hangar worth $120 million, said Ian Wolfe, ADAT chief commercial officer, to accommodate growth in the region. All of its current hangars are at capacity and the company expects to grow its revenue base significantly by 2012, said Wolfe.
"We are building in Dubai as if all life ends in 10 years," said Steffen Harpoth, CEO of UAE-based charter carrier Silver Air, who is very bullish on the region's airline and MRO prospects. He predicted that the Middle East's share of the MRO market will grow relative to North America and Europe.
MRO growth to accommodate airline fleet growth, however, has raised some concerns about overcapacity. Harpoth is not among those who are concerned. "I don't see any risk of overcapacity," he said.
Phillippe Erni, VP sales and business development, Middle East & India for SR Technics, said that in some places in the Middle East there is not enough capacity to accommodate the existing fleet, and he cited Kuwait and Oman as examples. Looking at the region as a whole, however, Erni hedged his bet somewhat, saying that MRO capacity will need to be managed.
Chris Doan, president and CEO of TeamSAI said that adding more capacity at the moment is a "little bit concerning" and suggested that the region may be at the "edge of overcapacity."
Photo of Emirates' engine workshop, credit: Emirates
