Text size:

  • Small
  • Normal
  • Large
A worker checks a turbine in an ADAT hangar. The company is doubling its aircraft hangar space.
Jaime Puebla
A worker checks a turbine in an ADAT hangar. The company is doubling its aircraft hangar space.

Fixing planes set to reap $5bn for region

Revenues from aircraft servicing are forecast to double to almost double over the next decade.

Aircraft maintenance companies and investors are banking on a major expansion in the Middle East in the next decade, amid forecasts that annual revenues could double to almost US$5 billion (Dh18.36bn) by 2020. Mubadala Development, one of Abu Dhabi's largest investment vehicles, is moving to capitalise on the expected growth, while smaller players from Dubai to Fujairah are setting up new facilities.

Mubadala believes the regional market will grow from $2.3bn to $4.8bn by the end of the decade, even as this year looks to be one of modest recovery from the recession. The growth in aircraft maintenance, repair and overhaul (MRO) is being driven by the expanding fleets of Middle East airlines, particularly the big three Gulf-based long-haul specialists Emirates Airline, Etihad Airways and Qatar Airways, which are expected to receive about 40 new aircraft a year over the coming decade.

"The number of aviation MRO firms is growing and this is not surprising, with new aircraft deliveries and record traffic figures at airports here," said Sheikh Ahmed bin Saeed Al Maktoum at the opening of the MRO Middle East 2010 exhibition and conference yesterday in Dubai. Sheikh Ahmed oversees Dubai's aviation sector including Emirates, Dubai Airports and the Department of Civil Aviation. Mubadala, through its maintenance companies Abu Dhabi Aircraft Technologies (ADAT) and the Swiss-based SR Technics, is expanding its capabilities in the Middle East and Europe to provide financing and supply-chain management for its components and engine maintenance businesses.

It is also considering adding new business lines such as an MRO unit for business jets, and a VIP interiors company. Mubadala's plans also extend beyond the region. It is embarking on expansion into the Americas and Asia-Pacific over the next two to five years, said Homaid al Shemmari, the executive director of aerospace at the company. It would do this by both acquiring existing MRO companies and establishing its subsidiary firms in new facilities, Mr al Shemmari said. "Each region has its own culture and business environment."

ADAT has been a prime beneficiary of the growth of Etihad, while Emirates has its own in-house engineering centre. Qatar Airways has outsourced its maintenance needs to the private sector, including Lufthansa Technik. But newcomers are expected soon. Europe Aviation, a maintenance firm based in Paris, plans to open its $25m maintenance centre at Fujairah International Airport by October, and will initially service planes such as the Boeing 737 and the Airbus A330.

The company will focus on cargo airlines in the region and also hopes to capitalise on a number of low-cost carriers rumoured to be setting up at airports such as Al Ain International Airport and Dubai International Airport. Nine business jet maintenance companies, including Livewel and Jet Aviation, are expected to start building facilities at the new Al Maktoum International Airport in Jebel Ali when it opens in June, officials said.

But the rosy long-term forecasts do mask a grim reality. Worldwide, airlines have grounded aircraft and cut flights to deal with a fall in air travel demand and the resulting financial losses. This has led them to defer aircraft maintenance, said John Byers, the chief executive of ADAT. "But the Middle East will be a key emerging market," Mr Byers said. The company has increased its revenues by 35 per cent in three years and is doubling its aircraft hangar space at Abu Dhabi International Airport after receiving a $500m maintenance contract with Etihad.

Its capital expansion projects include a new line maintenance centre, a paint hangar and an A380 superjumbo hangar. igale@thenational.ae

Back to the top

More articles


Editor's Picks

 The Greens, villas: Q1 no change. 3BR - Dh210-250,000. 4BR - Dh210-260,000. 5BR - Dh220-300,000. Q1 2013-Q1 2014 5% rise. Pawan Singh / The National

In pictures: Where Dubai rents have risen and fallen, Q1 2014

Find out how rental prices in the prime locations in Dubai have altered during the first three months of the year and the current rates you will pay according to data provided by Asteco.

 Above, the private pool of Ocean Heights' five-bedroom penthouse flat. Courtesy Christie’s International Real Estate

In pictures: Penthouse flat is height of Dubai luxury living

A five-bedroom penthouse in Ocean Heights in Dubai Marina is on sale for Dh25 million and comes with a private pool and an unparalleled view of Dubai.

 The cooling towers of the Temelin nuclear power plant near the Tyn nad Vltavou in Czech Republic. The country wants to continue expanding nuclear energy capacity despite cancelling a tender to build two new units. David W Cerny / Reuters

In pictures: Best business images for the week to April 17, 2014

Here are some of the best business images for the week to April 17, 2014.

 A sign points the way to an outdoor market popular with German visitors on the Polish side of the German-Polish border. Sean Gallup / Getty Images

In pictures: A decade since the European Union went east

May 1 will mark 10 years since the European Union expanded east, taking in countries like Poland, the Czech Republic and the Baltic states as new members. And though the border region between Germany and Poland is flourishing with trade and cultural exchange, the open border has also brought a sharp rise in crime.

 The Wind, Energy, Technology and Environment Exhibition takes place from April 14 to April 16. Above, the Dewa showroom during last year’s Wetex. Jaime Puebla / The National

April corporate and economic calendar for the UAE and overseas

From Cityscape to Wetex to stock-market holidays to nations reporting first-quarter GDP figures, here is our helpful calendar of April's business events in the UAE and internationally.

 Get the latest information on credit cards, bank accounts and loan products in the UAE. Mark Lennihan / AP Photo

Rates report: Latest on UAE loans, accounts and credit cards

Souqamal.com brings you the latest interest rates on banking products in the UAE.

Events

To add your event to The National listings, click here

Get the most from The National