Printed headline: Etihad Airways
The anticipated arrival of the Airbus widebody into Etihad’s fleet, along with third-party customer demand, has its maintenance division pondering development of new capabilities. Abdul Khaliq Saeed, CEO of Etihad Airways Engineering, talks to James Pozzi about these plans and why it sees itself as more than just an airline-affiliated MRO.
As the maintenance division of Etihad Airways, what are some of the key elements of your MRO strategy?
One of the most important parts is not being viewed solely through our affiliation with Etihad Airways. While we operate as part of the same company, when it comes to providing MRO services, we don’t differentiate between our in-house airline work and third-party customers. To us, Etihad is a customer, as are the other airlines and operators we work with. We want to maintain this balance, so that third-party customers come to us with the confidence that we are not purely focusing on Etihad, and we can provide the highest standard of services to them also.
What is the split between Etihad airline work and third-party services
In June 2018, it was 24% in-house and the remaining 76% of work was done for third parties. As an average, it’ll be 24-26% over the course of the year. Last year, Etihad fleet work accounted for 40% of our output. The Etihad work is constant, as there’s roughly the same number of aircraft every year, but we’ve been successful at attracting more third-party operators into our facilities.
In our part of the world, summer is a high-revenue period for airlines, which means more aircraft in operation and fewer aircraft in the hangars for MRO.
This year, we rose above that challenge by acquiring new and repeat business, and strategic planning of aircraft inputs and deliveries through the summer. Since June, we have been consistently exceeding our man-hour budget and delivering one aircraft after another for our customers, sometimes nose to tail. And our hangar slots are now booked beyond the summer months into September, with the projects mainly comprising heavy checks and end-of-lease aircraft with leasing companies.
By the end of the year, I foresee us exceeding our man-hour budget by a significant margin, as demand for our services doesn’t seem to be slowing down anytime soon. This isn’t a matter of chance but a result of careful planning.
What does Etihad look for in companies when forming a partnership?
Quite simply, both parties must be happy. If one partner is happy and the other is not, then that is not a true partnership. For Etihad, it needs to be advantageous for both parties. The longer the partnership lasts, things become smoother and mutual trust will grow. We’ve taken this approach whether it is for customers, parts and materials suppliers, or an OEM.
Etihad is one of the world’s largest Airbus A380 operators while the maintenance division also services third-party operators of the superjumbo. With the program in service for more than a decade, how has its maturation resulted in more shop visits in Abu Dhabi?
Whatever Etihad’s required checks are, the A380 will be coming into our hangars. One of our facilities alone can accommodate up to three of these aircraft. Third-party work on the A380 has been particularly successful for us and this year has been an active area for us. So far this year, we’ve serviced A380s operated by European carriers, and most recently in July 2018, we had an A380 from the fleet of one of the East Asian airlines in our hangar. As the market gets ever more competitive, carriers are recognizing Etihad’s expertise and capabilities with the A380.
Your capabilities cover a wide-range of aircraft, but are there any other aircraft types that Etihad is seeing a high volume of in its shops, whether from the airline or third-party customers?
Certainly, the Boeing 787 and Airbus A330 are common sights in our hangars, not just from Etihad but also other operators. We don’t yet possess A350 capabilities, but that is something we are studying, as customers have been inquiring about this. To stay ahead in the industry, maintenance providers need to possess capabilities for all the latest aircraft flying. Our A350 plans have moved beyond mere discussions, and we are analyzing what capital expenditure is needed for training and tooling for the aircraft. That’s something we are continuing to study and hope to make progress on this year.
One of Etihad’s primary services is in component repairs. Are there plans to grow this?
We are aggressively looking into expanding our component repair capabilities, again to cater for aircraft like the 787 and the A380. There’s a lot of focus on this, as it is an area we simply cannot lag in.
The Middle Eastern aviation industry is growing strongly, but is there a concern that a labor shortage could hamper the region’s continued growth?
We’ve not seen a problem in recruitment, while our retention of staff has also been robust—with staff turnover standing at less than 4% annually, below the industry average of around 10%. Our employees are our asset, so we put a lot of work into building their capabilities up while training them to stay on top. Progression within the company is also important, not just by providing opportunities but a clear pathway to move further on. Our work with training schools is also important, and we are just about to take on board the first batch of 10 technicians trained in the United Arab Emirates. By next year, we’d like this to grow considerably—I envisage between 40 and 50 new technicians joining Etihad over the course of 2019.
What have been some of your key investment priorities since joining the company in September 2017?
Technology is an area where, regardless of what you spend, there will always be something else to catch up on. Nevertheless, this is an important area we are focusing on, to see what we can apply that is good for the business. This summer, we have four technology-focused projects going on, including paperless documentation across our hangars, where technicians can use programs to transmit and receive information digitally after inspections. Using drones for inspection work—such as lightning-strike checks—is another area of consideration for us. We are in discussions with providers to come to our facilities and demonstrate this to us. c