x Abu Dhabi, UAEMonday 22 January 2018

An island of aviation expertise

An aircraft maintenance centre in Malta is part of Abu Dhabi's global aircraft maintenance expansion plans

The SR Technics facility in Malta.
The SR Technics facility in Malta.

In a hangar on the Mediterranean island of Malta engineers work diligently on changing a navigation light bulb on the wing of an easyJet plane.

Others check the engine fan on a nearby aircraft, helping to ensure the safety of the thousands of passengers who travel on these planes each year.

Such safety checks are part of an operation that represents a significant investment for the UAE. The company working on the planes is SR Technics, an aircraft maintenance company based in Zurich in which Mubadala Development has a 70 per cent stake, with the remaining shares owned by Dubai Aerospace Enterprise. Mubadala is a strategic investment company owned by the Abu Dhabi Government

For SR Technics, the decision to set up one of its two main European facilities in Malta is largely a cost-saving measure. Two years ago, the maintenance, repair and overhaul (MRO) company shut down its facility in Dublin, Ireland, as part of a restructuring plan.

More than 1,000 workers had been employed there. The closure came after it lost contracts, including ones with Aer Lingus and Gulf Air, as airlines looked to reduce costs during the global economic downturn that badly hit the aviation industry. The global airline industry suffered a loss of US$16 billion (Dh58.76bn) in 2008 and a $9.9bn loss in 2009, according to the International Air Transport Association.

"Our main facilities are in Zurich, which is in quite a high-cost country, so we were actually obliged to look at lower cost regions, and filtered our selection down and came to Malta," said Jutta Trimmel, the general manager at SR Technics Malta.

The facility on the island opened last year, with the budget carrier easyJet as its first customer in a $1.6bn 11-year contract with SR Technics.

Salaries in Malta are between 40 and 50 per cent of those in Ireland, according to the Malta Country Report produced by CountryProfiler, a specialist publisher of country reports and investment guides.

As well as the cost saving, other reasons included the fact Malta already had quite a significant aviation industry and it is an English-speaking country, Ms Trimmel said.

The scope of the company's work there includes six-yearly checks on planes, which take two weeks to complete and require between 3,500 and 4,000 man-hours.

Ms Trimmel said the facility, which can house two aeroplanes at a time, and employs more than 150 workers, is aiming to expand its customer base and capabilities.

For Mubadala, the investment is part of a wider strategy to develop Abu Dhabi's aerospace industry. Mubadala, Istithmar, and Dubai Aerospace Enterprise bought SR Technics for $1.3bn in 2006. Mubadala bought out Dubai's Istithmar's 30 per cent stake in 2009 for an undisclosed sum to increase its share from 40 per cent.

"Mubadala Aerospace is building on the technical expertise and experience of SR Technics and Abu Dhabi Aircraft Technologies to put together a global MRO offering which provides flexibility, reliability and cost-effectiveness for its customers and partners," said Homaid al Shemmari, the executive director of Mubadala Aerospace.

Abu Dhabi Aircraft Technologies is also owned by Mubadala and is an affiliate of SR Technics.

"While building capability and capacity in Abu Dhabi is important, given the rapid expansion of the region's carriers, our strategy also involves investing both locally and internationally to increase the scale and breadth of the global MRO network product offerings," said Mr al Shemmari.

"This approach supports Mubadala Aerospace's broader strategy to develop an aerospace industry in Abu Dhabi, spanning manufacturing, maintenance and training, by building on the strategic geographical location between Asia and Europe to strengthen our relationships and reputation with all the key operators in the global aerospace industry."