What are the big opportunities for improving maintenance for fast-growing Middle East carriers?
Over the next five years, MRO demand in the Middle East is estimated grow about 9% annually, notes Rahul Shah, AAR SVP for Asia Pacific, Middle East and Africa. Moreover, engine maintenance is expected to increase nearly 12% annually through 2022. Given the harsh environment airlines face in the Middle East, the biggest share of maintenance spending, 40%, is for engines. “If they can save 10 to 15% by reducing core engine part replacement cost, it will significantly reduce their maintenance cost,” Shah observes.
Another opportunity for better Middle East maintenance lies in improving technical dispatch reliability by having the right parts available at the right time, reducing AOGs and increasing revenues.
Finally, interior modifications on older aircraft to harmonize with new aircraft coming into Middle East fleets have tremendous cost implications that need to be carefully monitored, according to the AAR exec.
Shah thinks his firm can help along all three improvement paths. AAR can provide engine parts cost-effectively. It offers supply-chain solutions with its OEM distribution network and flight-hour solutions for high-cost rotables. And AAR can integrate modification work and expedite FAA STCs for airlines.
Shah emphasizes that AAR is currently the largest global supplier of used, serviceable OEM parts for both engines and airframes. The company holds $400 to $500 million of used stocks at any given time. For PMAs, AAR has a strict policy in place. PMA piece parts are supplied only at customer requests, and PMA quality is monitored vigilantly by the MRO.
At present, AAR’s Middle East airline customers are on a mix of flight-hour support and time-and material transactions. “Solutions are tailored to requirements of airlines and best suited for their operations,” Shah says. AAR will continue to offer this mix of approaches to Middle East carriers.
This fits with AAR’s plan to build a more international foot print. One expansion is a heavy-maintenance facility in India. “This will have all the bells and whistles as what we have in U.S.,” Shah says. Technology, best practices and MRO IT systems will be spread from AAR’s North American MRO to the Indian shop.
“Ultimately we want to deploy all the advance-technology repairs we have in North America to the international market,” Shah says. AAR wants to serve international commercial and defense markets with supply chains, warehousing, component repair and other services.
One of the challenges of setting up MROs in the Middle East region is attracting and retaining skilled labor. One way of meeting this challenge publicizing the skills required and the carrier path MROs can provide through education. “This does not necessarily mean opening more campuses or colleges, but ensuring that students get the right type of courses that gear them up to tackle the needs and challenges in the industry,” Shah says. “This is what we do with our EAGLE career pathway program, started last year in the U.S., and more and more colleges are added.”