Viewpoint

Israel underestimated for MRO

This year has seen expansion across the Middle East MRO sector. Mubadala Development Company continues to go from strength to strength with new facilities in Abu Dhabi and ever closer cooperation with Etihad Airways. JorAMco has put in solid work with new deals to service Air Astana and Jazeera Airways aircraft.  Bombardier is to set up an Authorised Service Facility (ASF) in Qatar and Iraq is pouring $50bn into the country’s shattered aviation infrastructure.

With all these developments it’s easy to overlook Israel’s MRO business, which is underestimated as an economical location for MRO work.

A recent trend in European aviation has been to nearshore work to Eastern European countries. This has sometimes been problematic, as a recent report for Starair notes: “There have been concerns about the quality and reliability in terms of scheduled downtime of some of the suppliers.  Additionally there are signs that these facilities are already becoming capacity constrained.” One solution is to send aircraft to Israel. As Starair’s report says: “Suppliers in Israel however have also managed to make an impact. Labour costs are also low, but quality and reliability are good.”

Air Canada signed a five-year agreement with Israel Aerospace Industries’ (IAI) Bedek division for heavy maintenance at Ben Gurion International Airport earlier this year. Bedek also has a side line in converting passenger aircraft into cargo transporters. Clients have included Kalitta Air and Air China.

Parent company IAI’s order book stands at around $10bn, and the business has considerable experience from defence work that could potentially be leveraged into the civil arena.

El Al Tech – Israel’s other local MRO provider – specialises in Boeing aircraft, and goes up to C checks. Customers have included Nepal Airlines, Austrian, BA and Delta.

Lufthansa Technik became the first foreign MRO company to set up a base in Israel this year. Israir Airlines uses Lufthansa to service its A320 fleet under a Technical Operations Management contract that covers three aircraft.

 

These might be modest developments compared to the global MRO market, but for a small player Israel can punch well above its weight.

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