Subscribe Free
in Features

Is Middle Eastern aviation ready to switch to in-house MRO support?

Posted 25 February 2015 · Add Comment

Currently, the Middle Eastern commercial aviation MRO market is growing at a faster rate than the global average. According to ICF International, it is expected to account for up to 8% of the global civil aviation MRO market in 2015. However, as more and more local carriers find having suppliers from North America or Europe no longer acceptable, it is still unclear whether the domestic ones will be able to fully replace them.


As Middle Eastern airlines continue to grow their fleets and expand their markets, ICF International predicts the regional MRO market to generate up to $4.6 billion in expenditures in 2015. Moreover, growing at an average of 6.7% annually, the market is expected to reach $8.8 billion in a decade. Following such growth, lately it has been becoming more and more apparent that many carriers want their aftermarket services to come from the region.
For instance, currently four major carriers from the region - Emirates, Qatar, Etihad Airways and Saudia - account for about 67% (about $3 billion) of Middle Eastern MRO expenses. They all have in-house maintenance capabilities, which helps explain why 76% of heavy airframe MRO is done within the region. Moreover, Air Algerie, EgyptAir, Emirates, Kuwait Airways, Middle East Airlines, Qatar Airways and Saudia recently signed a memorandum of understanding to cooperate in such areas as maintenance training, vendor audits, line maintenance and the joint purchase of consumable parts. The collaboration is expected to save the participating airlines about $150 million in the next four years, as well as help gain more efficiency.
On the one hand, this does mean that the opportunity for third-party suppliers targeting the MRO segment in the Middle East is becoming increasingly smaller. On the other hand, some experts say there are reasons to believe the carriers’ in-house MRO capabilities might be overestimated.
“The Middle Eastern in-house MRO providers can sure be expected to grow as airlines do. However, at the time they continue to face some specific challenges. For instance, attracting and retaining technical talent has consistently been a challenge for the region. Meanwhile, it is predicted that the Middle Eastern MRO market will require over 11 million maintenance man-hours to support its growth by 2024,” said Aldas Juronis, the Head of FL Technics components and materials sales department (pictured right) . “Comprehensive spare parts solutions are also among the services that are still in need of appropriate development, as obtaining the needed spares quickly – especially in AOG situations – continues to be among the reoccurring issues of the local carriers.”
Aviation Week forecast that of $4.6 billion the Middle Eastern operators are expected to spend on MRO in 2015, 22% will account for various component supply-related services. Not surprisingly, while talks of switching to local suppliers have been becoming more and more active, some of the third-party players have actually been adding capacity within the region, preparing for the anticipated demand. For instance, one of the other large independent MROs in the region claims it is already handling 65 000 annual transactions and is expected to almost double the number over the next five years.
“Of course, locating aftermarket providers in the Middle East and North Africa should decrease the expenses of shipping MRO work outside the region, as well as costs associated with logistics and longer asset downtime. However, whether the region can ensure an equally speedy development of the region's MRO business still remains to be seen. In the meantime, cooperating with reliable partners from relatively close regions in ensuring continuous supply of spares, as well as gaining crucial technical experience in handling MRO operations, might become a viable strategy in the process of getting off the costly support needle,” Juronis said.
 

* required field

Post a comment

Other Stories
Advertisement
Latest News

Will we keep on taking the tablets?

New US and British governments regulations, which prevent passengers carrying electronic devices larger than a cell phone on flights from across the MENA region, may affect the latest in-flight entertainment trend. Steve Nichols

Pegasus Airlines' inaugural flight to Abu Dhabi takes off

Abu Dhabi Airports yesterday welcomed the inaugural Pegasus flight arriving from Istanbul, Turkey. The maiden flight marks the commencement of a direct service three times a week between Abu Dhabi International Airport and Istanbul

Airbus launches new open aviation data platform to support digital

Airbus has launched a new aviation data platform in collaboration with Palantir Technologies – pioneers in big-data integration and advanced analytics. Skywise aims to become the single platform of reference used by all major

PARIS AIRSHOW: Astrobotic and ATLAS announce lunar laser communications payload

Astrobotic, which is making the Moon accessible to the world, and ATLAS Space Operations Inc., the US leader in cloud-based satellite management and control services have announced at the Paris Air Show that they have signed a payload

PARIS AIRSHOW: GE and its JV partners receive more than $31 billion in orders

GE Aviation and its joint venture companies, led by CFM International, announced more than $31 billion (USD) in orders and commitments at this week's Paris Air Show.

PARIS AIRSHOW: Emirates wins World's Best Inflight Entertainment at Skytrax awards

Emirates has won World's Best Inflight Entertainment award for a record 13th year at the prestigious Skytrax World Airline Awards 2017. The airline also picked up the award for Best First Class Comfort Amenities.

TAA SK 12MTHS16
See us at
Global Aerospace BT28218DAS BT1105161117AIME BT1204240118DIAC BT1105121117Aviation Africa BT18418RMIT BT1631817