x Abu Dhabi, UAEFriday 19 January 2018

Abu Dhabi Aviation looks further afield

Feature Before the globe-hopping appeal of Etihad Airways and the five-star executive luxury of Royal Jet, there was Abu Dhabi Aviation.

Abu Dhabi Aviation has been quietly serving the air transport needs of society for more than 30 years.
Abu Dhabi Aviation has been quietly serving the air transport needs of society for more than 30 years.

Before the globe-hopping appeal of Etihad Airways and the five-star executive luxury of Royal Jet, there was Abu Dhabi Aviation (ADA). Largely flying under the radar of most residents, the company has been quietly serving the air transport needs of one particular section of society for more than 30 years. With the largest fleet of helicopters in the Middle East and a number of small aeroplanes, Abu Dhabi Aviation mainly transports its passengers to offshore islands and oil and gas facilities. In any given month it will carry 27,800 passengers and 175,000kg of freight to and from offshore areas. Another 10,000 passengers are moved between locations. The company owns more than 60 helicopters and aeroplanes and manages and operates another 40 for other owners. The requirements of this capital-intensive industry can be immense, forcing the carrier to develop it own in-house paint, maintenance, repair and engineering shops. Its sheer size has made it the largest helicopter maintenance provider in the Gulf. The value of its spare parts alone is US$46 million (Dh168.9m). With its roots in the Gulf, it is increasingly seeking opportunities abroad, where it says it can earn higher profits. In the UAE, it is facing increasing competition from new helicopter operators. "Historically, we always make better margins when we work outside," says Nadir al Hammadi, the managing director of Abu Dhabi Aviation. "So what we are trying to do is be recognised by the big oil companies such as Petrobras and Petronas, and provide offshore oil and gas support." Abu Dhabi Aviation dates back to 1976, when the UAE federation was a mere five years old. Oil was first exported out of Abu Dhabi in 1962 and with the world's sixth-richest reserves of hydrocarbons, production was soon increased and facilities built offshore. "There was a need to establish a company specialised in onshore and offshore support," Mr al Hammadi said of the company's origins. In the UAE, it has become an air transport omnivore, devouring any work it can find to utilise its huge stable of aircraft. On any given day an ADA aircraft, with its trademark white paint job and falcon-inspired red swooshes, might take schoolgirls living on remote Delma Island to their academy in Al Ain, pick up a Sheikh's family from their desert palace for a trip to the capital, carry troops between airbases throughout the Emirates for the Armed Forces, or spray a farm in Al Gharbia. However, the mainstay of its business is in offshore oil support. During Abu Dhabi's early oil boom, processing plants, offices and housing were built on offshore islands such as Das, 180km from Abu Dhabi Island. Abu Dhabi Aviation routinely ferries workers to Das, the base for the Government's top offshore oil and gas company, Abu Dhabi Marine Operating Company (ADMA-OPCO), and Zirku, the main industrial base for the emirate's Upper Zakum, Umm al Dalkh and Satah fields. Both islands have helicopter pads and landing strips, with Abu Dhabi Aviation's Bell and Agusta Westland helicopters combining with 37-seat Bombardier Dash 8 aircraft to provide a vital link to civilisation for workers. The company began operating Bombardier aircraft in 1993 when it purchased Emirates Air Service, a small operator based in Abu Dhabi that focused on offshore oil support. Today, it uses these aircraft for the Das and Zirku routes and as a shuttle service for Delma Island residents to the Abu Dhabi mainland. The flights, intended to support the residents against a harsh life in one of the emirate's remote outposts, are paid for by the Abu Dhabi Government. For three decades, Abu Dhabi Aviation has expanded in step with the country's burgeoning oil and gas industry. As of December, its assets, including aircraft, a private terminal at Abu Dhabi International Airport and maintenance facilities, were worth more than Dh3.05 billion. Last year, however, its status as the sole provider of helicopter services ended. Falcon Aviation, an upstart outfit operating out of Bateen Air Base, won its first offshore oil helicopter service contract, signing a three-year deal with Total, the French oil producer. The contract was for up to three flights a day from Abu Dhabi to production platforms and drilling rigs at Total's Abu al Bukhoosh field, located 177km offshore near the maritime border with Iran. The fracturing of the offshore market continued this summer, when Falcon swooped in on another contract, effectively splitting a large offshore support deal with ADMA-OPCO between Falcon and ADA. Like Abu Dhabi Aviation, which is chaired by Sheikh Tahnoon bin Zayed, a son of the late Sheikh Zayed, the founding President of the UAE, Falcon enjoys royal patronage, having been created in 2006 by Sheikh Sultan bin Khalifa, the son of Sheikh Khalifa, President of the UAE. Mr al Hammadi says it was inevitable his company would have to give up its monopoly. In fact, he is glad of it. "We have been looking at competition as a positive thing, pushing Abu Dhabi Aviation out of our comfort zone," he says. Monopolies can work both ways, he says, either for you or against you. "When you think you have a monopoly, but then actually, the other party, the biggest customer, is going to have the monopoly on you, demanding certain things that really you will have little room to manoeuvre or negotiate around, since without them you cannot survive." Despite the dominant position in the offshore support market, Mr al Hammadi says the company is eager to shift resources internationally to earn more attractive margins. Abu Dhabi Aviation has hired public relations teams in Australia, Brazil, Oman and Yemen to further its oil and gas support business because aircraft freed up after it split the ADMA-OPCO contract with Falcon can now be sent abroad, as it has done in the past, he says. "Those aircraft could be taken out and sent to a job and could generate even better revenues for us." The company has also leased helicopters to other air operators or to oil and gas firms in Ethiopia, Pakistan and Afghanistan. For the past 11 years, it has sent helicopters to Spain under summer firefighting contracts and recently signed new alliances with India's Heligo, for the use of one Agusta Westland 139, and an offshore support firm for Petrobras. Like its ambitions, the company's fleet continues to grow. It is still receiving the last of an order for 20 Agusta Westland 139 helicopters ideal for oil and gas work, and is negotiating the purchase of one more Bombardier Dash-8, Mr al Hammadi says. The company is also in talks with Agusta Westland for a joint venture involving Abu Dhabi-based maintenance business for the Anglo-Italian helicopters. Finally, it has not ruled out launching a regional shuttle service from Abu Dhabi to neighbouring countries. "If we get the excess aircraft and the opportunity, we will do it," Mr al Hammadi says. "But the question I have is: Is the market sustainable? The way we would do it is just go and test the market." igale@thenational.ae