Maximus, the UAE's largest air cargo operator, has bought three new planes, significantly increasing its fleet
Maximus buys three JAL planes
Maximus Air Cargo, the UAE's largest cargo aircraft operator, yesterday announced a major expansion of its fleet.
The company, which owns eight planes, is in the process of buying three Airbus passenger aircraft from the international carrier Japan Airlines for a total investment of Dh350 million (US$95.2m).
The new aircraft are intended to be used to further the cargo operator's rapid expansion after total flying time last year rose 23 per cent compared with the year before.
Fathi Buhazza, the chief executive of Maximus, said the company was now ready for the extra workload having built the necessary "know-how and understanding" for this type of aircraft.
Offering 48 tonnes of load capacity, the three Airbus A300-600 jets will be first sent to Dresden, Germany, to be converted into freighters at the repair and maintenance centre run by the pan-European aerospace and defence manufacturer EADS.
The Maximus purchase is part of a strategic move by the operator to offer more cargo planes to customers on lease for a fixed term. The company will lease the three aircraft to airlines, complete with engineering crew, maintenance personnel and insurance.
Leasing planes is a low-margin business for Maximus, but it provides a stable income as airlines are charged a minimum price for the lease whether or not the planes fly.
Etihad Airways currently leases two planes from Maximus and Mr Buhazza hopes to offer the new aircraft to the Abu Dhabi carrier first.
Maximus also provides a charter service on an ad-hoc basis, transporting livestock such as horses, or heavy loads such as trains.
Although chartering is highly profitable, the work is less predictable than leasing, so the chief executive aims to buy more planes for leasing in the future.
The addition of the Japan Airlines planes will see Maximus become the world's largest provider of leasing services, also called aircraft, crew, maintenance and insurance (ACMI) services, for this type of aircraft.
Saj Ahmad, the aerospace analyst at FBE Aerospace, said the A300-600 offered good value for money."Being able to acquire three newer jets gives Maximus added growth for the next 10 years or more through more regular ACMI-based business, reducing their exposure to any volatility in the air-freight market, which is still far from stable," he said.
Local and international banks are being tapped to finance the purchase of the three planes, which were built in 2001 and 2002.
Maximus' revenues and profits more than doubled over the past three reported financial years and Mr Buhazza said the strong performance continued last year as revenues grew 16 per cent to Dh430 million on 2009.
Once the new aircraft are brought into service in July, September and November, he expects next year's profits to be materially higher.
"We can now offer cargo agents and freight forwarders a wider choice of cities for their shipments," Mr Buhazza said.
Maximus is owned by ADA Group, which was established in 2005 and includes the private aircraft operator Royal Jet and Abu Dhabi Aviation, the commercial helicopter operator.