Viewpoint

JV surge set to shape Middle Eastern MRO

The Middle Eastern MRO sector will be shaped by the establishment of more joint ventures (JVs) and mergers to meet growing demand, while firms will also insource their capabilities.

This was the conclusion of a panel discussion held at MRO Network’s Airline E&M Middle East (#AEMME) conference in Abu Dhabi yesterday (April 28) which debated the region’s growth opportunities.

To meet the influx of new aircraft for fleet expansion and upgrades, John Bowell, managing director of ADA Millennium — a JV between Abu Dhabi Aviation and JCBA —said more companies like the recently formed ADA will emerge.

“If you look at the major carriers in the region over the last 10–15 years, fleets are expanding and it now stands at about 500 aircraft. In the next 10 years this is set to double again,” he said. “There will be more opportunities for JVs and MROs from outside the region to come into play and secure new business here.”…

The prevalence of “insourcing” in recent years was also predicted to continue by the panel, as firms extend their existing capabilities and expand their offerings.

“More players want to be global, so the idea is to have a wider network, wider coverage and with more capabilities,” said Remzi Saltoglu, director commercial at myTechnic. “This is not only some orthodox capabilities like components and engines, but something more extensive such as full support capabilities, for example, Part 21

But a lack of skilled labour could hamper the Middle East’s burgeoning MRO sector to meet the predicted 11 million maintenance man hours required within the next 10 years.

ADA’s Bowell felt the lack of skills could restrict industry growth and said this needs addressing by firms investing more in training.

Ziad Al Hazmi, general manager Gulf, Lufthansa Technik (LHT), said the question of what services to invest in is another challenge, with LHT currently focusing on what he described as “value-added” projects, such as mobile teams and on-wing repairs.

“There are certainly opportunities, but the question is how much you invest and where you invest it – that’s always the challenge. At the end of the day, if the bottom line doesn’t fit, then investing in something doesn’t make sense,” he said.

The Middle East’s growth figures – surpassing those of regions such as Europe and North America – offer great opportunities. However, the panel discussion yesterday also shows it is a region in the midst of great challenges.

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