Dubai Air Show

Maintenance companies reaping fruits of region’s growth in airline activity

 - November 11, 2007, 7:17 PM

Both local and Western companies are enjoying a strong market for maintenance, repair and overhaul (MRO) services in the Middle East, due to increased airline activity and military aircraft fleets. For instance, Air France Industries-KLM Engineering & Maintenance (AFI-KLM E&M) is considering the launch of a joint venture with a Middle Eastern carrier, and local MROs, such as Joramco (Stand E816) and Alsalam Aircraft (Stand C706), are boosting their workforces to meet rising demand.

At AFI-KLM E&M, Fouad Benbrahim, sales manager for Africa and the Middle East, estimated that the market for aviation maintenance in the region is worth $1.6 billion per year. While this could look like a small portion of the global $40 billion market, it is growing at a much swifter pace–9.2 percent per year, more than twice the global average. “Over the 2006-2011 period, it is the fastest growing region,” Benbrahim told AIN.

AFI-KLM E&M (Stand W626) is talking to potential partners among its customers in the region, with the aim of setting up local MRO operations. Thus far, it has sales offices only in the Middle East–one in Dubai and one in Jeddah, Saudi Arabia.
Its current airline customers include Royal Jordanian, Jordan Aviation, Saudi Arabian, Yemenia, Qatar Airways, Kuwait Airways, Oman Air, Emirates and Etihad. The company served as a consultant to the latter as it prepared for Boeing 777 operations, with a team spending between one and two years on site.

Alsalam Targets Civil Market

In Riyadh, Saudi Arabia, Alsalam Aircraft (Stand C706) is planning on significant growth. “We now have about 2,500 employees and expect to reach 3,500 in 2010,” CEO Mohammed Fallatah told AIN. The company’s main business is military aircraft support, often conducted at Saudi air force bases. It is now trying to increase civil revenues.

In September, Boeing recruited Alsalam to upgrade the Saudi airborne warning and control system fleet, consisting of four aircraft. The company expects to complete the work, in Riyadh, by December 2009. “So far, our turnover has been 70 percent military. We would like to increase the civil part to 50 percent, rather than the current 30 percent,” Fallatah said.

Current civil work at Alsalam consists of heavy maintenance and refurbishment. Alsalam technicians work on Boeing 737s, 747s and 707s, as well as the Airbus A300B, Boeing Business Jets (for which it is an authorized service center) and Gulfstream executive aircraft.

Plans for the Saudi firm to get approval from the European Aviation Safety Agency for Boeing 777 heavy maintenance, earlier pegged for the second quarter of 2007, have been delayed. Fallatah is talking about having 777 capability in 2008 and said he expects the company to add new workshops next year.

In addition to the military side of its business, Alsalam also attempts to shield itself from the cyclical nature of the air transport market by expanding its manufacturing activity. The firm produces various aerostructures, from both composite materials and sheet metal.

But Fallatah’s main concern seems to be finding enough manpower to accommodate his growth plans. “Increasing our workforce is a big problem,” he said. Alsalam is responding by preparing to open its own training academy next year.

Joramco Thrives in Jordan

In Amman, Jordan, Joramco is enjoying fast growth, too. Its workforce, currently 900 employees, has grown by 30 percent over the last two years. CEO Bashir Abdel Hadi is also bullish about the future of the firm, jointly owned by Dubai-based Abraj Capital (80 percent) and Royal Jordanian Airlines (20 percent).

Joramco expects its employee roster will swell by 100 by year’s end and an equal number in 2008. From then on, it expects to hire about 50 more every year. The company is hiring technicians from all four local maintenance schools. It also has started its own academy, which operates in partnership with UK-based Air Service Training.

To cope with growth, Joramco last year started building new facilities, which are due to open very soon. They boast two new bays that have been designed for heavy maintenance operations, each of which can house either one Airbus A340 or three narrowbodies.

Hadi attributed his company’s growth to two main factors. “First, there is a genuine–rather than cyclical–growth in air transport in the region and in Asia,” he asserted. Second, he said, the Jordanian firm is more competitive than European rivals, with costs estimated to be 30 to 40 percent lower. Hadi insisted that Joramco can match both quality standards and turnaround times.