Analysis
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Airline E&M: Middle East 2013

The Middle East is well known as a key growth area for the aviation industry - but amidst the immense opportunities of the region, strong challenges face both airlines and maintenance organisations. Joanne Perry travelled to this year’s Airline E&M: Middle East in Amman, Jordan, to hear about the good and the bad of Middle Eastern aviation today.

“We have the manpower, the labour and the wealth for the business,” declared Ziad Abu Ain, GM of Jordan Airmotive, in his keynote address at Day One of the Airline Engineering and Maintenance: Middle East Conference 2013 - this year held in Amman, Jordan. Ain proceeded to give the audience some impressive facts and figures about the region: that the Middle East and North Africa account for almost one third of the world’s population and nearly 16 per cent of global GDP. He added that most of the region’s population is below 35 years of age and therefore “very young” by international standards.

In addition to these strengths, however, Ain admitted that the region battles “a very unique” operating environment - a corrosive combination of sandy and saline conditions which adversely affects aviation operations. Nonetheless, aviation in the Middle East is evidently going from strength to strength. As Ain explained to the audience, the industry has transformed from being the privileged preserve of government officials into a commercial business spearheaded by major airlines such as Emirates, Etihad and Qatar Airways. He said the region has experienced “incredible growth” during the last 30 years, incorporating “massive” airport expansion in Jordan, Dubai, Abu Dhabi, Oman, Qatar and Saudi Arabia plus the development of related facilities such as maintenance, repair and overhaul (MRO) facilities and training centres.

Looking ahead, the Middle East is set for even greater expansion over the next few decades; Ain predicted that the region will even overtake China in terms of traffic growth by 2029. This will be supported by substantial fleet expansion starting with the current total of over 800 firm aircraft orders. Ain said the region has placed 20 per cent of global widebody orders and leads the world with firm orders for the A350 XWB and the 777, accounting for 40 per cent of the backlog for these aircraft types. Moving on to MRO, Ain noted that, while global growth in this sector will increase from $31bn at present to $67bn in 2022, the Middle East will see a 6.4 per cent compound annual growth rate (CAGR) – second only to Latin America. He added that the Middle East’s market share growth will increase from 6.9 per cent in 2015 to 9.2 per cent in 2022. In Ain’s opinion, the recent political difficulties in the region which adversely affect business will not prevent this sizeable growth.

However, Ain emphasised the need for the predicted growth to be supported with appropriate infrastructure and manpower. At the moment, he said, there are a limited number of engine and airframe MROs and training centres for aviation specialists, with much of the available manpower coming from the Far East, India and Pakistan. One of his key recommendations is to establish effective training programmes to make the most of the region’s young population – and another is to encourage elite professionals living in the US and Europe to migrate back to the Middle East and help to develop the local market. The need to keep the industry well-supplied with qualified personnel would be a recurring theme at Airline E&M: Middle East.

Ain’s keynote address was followed by a comprehensive market overview from David Stewart, VP, ICF SH&E, UK. According to Stewart, the global air transport fleet – presently comprising 27,000 aircraft, including turboprops - is set to grow at a rate of 3.1 per cent per annum up to 2022, with the Middle East growing faster than any other region, at 5.7 per cent. Meanwhile, global MRO spend will increase by 4.1 per cent per year from $59bn to $85bn (based on 2012 dollar figures), with the growth concentrated “emphatically in the Middle East and Asia” and Western Europe appearing “quite anaemic” by comparison. Stewart said the 8.5 per cent annual growth in MRO spend in the Middle East – “a very strong growth rate by any stretch of the imagination” - is being led by the national carriers, such as Emirates, Qatar Airways, Etihad and Saudia.

Looking at the specifics of MRO within the Middle East, Stewart explained that the airframe maintenance manhours required to support a fleet within the region have increased from eight million to just over 14 million, at a rate of 6.6 per cent per annum. “That clearly has a significant implication,” stated Stewart – “Is there enough capacity in terms of the skilled labour to support this growth?” This leads to further questions as to how to: train and retain the labour, ensure the supply chain and fulfil all requirements cost-effectively without having to bring in personnel from abroad. On the engine side, Steward pointed out that - largely due to the large number of widebody deliveries over the past ten years - the number of shop visits has increased from 300 to 500 per year, representing a seven per cent annual growth rate. He added that such growth will involve both challenges and opportunities in the supply chain.

Day One moved on with a panel session entitled ‘Assessing fundamental changes to the MRO landscape’, which featured representatives from MTU Maintenance, Mideast Aircraft Servicing Company and JorAMco. A brief refreshments and networking break was followed by an airline round table on ‘Working together to improve efficiencies, reduce costs and share resources across airlines in the region’, with contributions from DHL Aviation, UIMAS, Saudi Arabian Airlines and Petra Airlines.

John Avery, director of supply chain solutions, A J Walter Aviation (AJW) then stepped up to give a well-structured, no-nonsense presentation on ‘Improving cost management in maintenance and operations’. Sample quote: “We talk about cost like it’s an absolute; cost is not an absolute. The lowest cost available to you is zero. If you spend no money, you’ll have no business and you’ll need to find something else to do.” Avery’s message to the audience was that cost has to be taken into context, namely the operating environment of the region concerned. He urged the attendees to pay attention to cost accounting - which he labelled boring “but so important” – and likened poor accounting to a football match “where no one keeps score”. Avery concluded with a list of crucial tips for how to handle suppliers.

During a busy Day One, the Airline E&M: Middle East attendees enjoyed further presentations from Tiymor Kalimat, manager, technical procurement, Royal Jordanian Airlines – on ‘Aircraft and engine industrial collaboration and innovation in managing leased aircraft’ – and Paul Page, customer business manager, Honeywell Aerospace, who spoke on ‘Streaming and improving inventory management’. The day ended with a double-bill from Oussama Jadayel, director at the Balamand Institute of Aeronautics, University of Balamand: firstly, a presentation on ‘Developing a training strategy to overcome the challenges of the new EASA [European Aviation Safety Agency] maintenance certification requirements’; and secondly, a brainstorming session on ‘Strategies to overcome the region’s technical manpower shortage’.

Day Two kicked off with a brief summary of the previous day’s findings from conference chairman Rashad Karaky, manager – economics, IT and technical management at the Arab Air Carriers Organisation (AACO). The first panel of the day, ‘Preparing for the arrival of new generation aircraft in the region’, featured representatives from Bombardier Commercial Aircraft, AFI KLM E&M and GE Inspection Technologies.

The audience then received an update from Miyan Razzaq, VP, Middle East and North Africa, Pratt and Whitney (P&W), on modern engine design and the contrasts between P&W’s geared turbofan (GTF) and competitor offerings. Razzaq suggested that customers are looking for the kind of engine commonality across airframes that is offered by the GTF, three designs of which accommodate five platforms: the A320neo, the MC-21, the MRJ, the CSeries and the E-Jets. Razzaq pointed out that such a strategy should assist airlines with maintenance considerations and is "something I think we will see more and more for new design engines”. He emphasised that the design of an engine “is the first step towards better maintainability of the engine – and that’s what’s demanded by the airlines today”.

Razzaq then hit on a topic which concerns many in the industry today: the increasing influence of original equipment manufacturers (OEMs) in the aftermarket. Somewhat predictably, he extolled the benefits of OEM total care packages, especially for the new engines which require advance investment in different tooling - adding that about 80 per cent of the engines which have been sold by P&W are now maintained under such agreements. Razzaq did note that some airlines have “very capable” MROs which are able to conduct maintenance in-house effectively, but said that overall “more and more airlines are looking to offload the risk of maintenance cost to the OEMs”. He pointed out that P&W offers a range of aftermarket options in addition to total care packages, including maintenance services agreements and time and materials contracts. “There is no revolution from our perspective on the management of the maintenance,” he stated.

The Airline E&M: Middle East attendees then received the latest information on airworthiness regulations and safety standards from Chris Drew, safety and airworthiness consultant, Baines Simmons, focusing mainly on key proposed amendments to Part M and Part 145 operations. The next two presentations came from Michael Groh, product manager repairs, MTU Maintenance – who spoke on ‘Employing the best technologies to improve performance in difficult conditions’ – and Alexey Ivanov, VP engine management, FL Technics, who spoke on ‘The economy of the repair engine using PMA parts and DER repairs’.

Day Two’s conference rounded off with a detailed presentation from Qadir Chandio, avionics aircraft engineer, airworthiness management, Pakistan International Airlines, on ‘Critical design configuration control limitations (CDCCL) and electrical wire interconnection systems (EWIS)’.

Airline E&M: Middle East finished with a site visit to the facilities of Jordan Airmotive, where Haitham Shaheen, deputy GM for commercial affairs, showed attendees the company’s recently upgraded engine test cell and maintenance hangar. Listening to Shaheen, it appeared that business is good for Jordan Airmotive and new engine capabilities are being added to the existing portfolio; provided that other MROs in the region follow the company’s lead and push for progress, they too should be able to capture a slice of the immense growth now occurring in the Middle East.

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