Airline E&M: Middle East 2013
The Middle East is well known as a key growth area for the aviation industry - but amidst the immense opportunities of the region, strong challenges face both airlines and maintenance organisations. Joanne Perry travelled to this year’s Airline E&M: Middle East in Amman, Jordan, to hear about the good and the bad of Middle Eastern aviation today.
“We have the manpower, the labour and the wealth for the business,” declared Ziad Abu Ain, GM of Jordan Airmotive, in his keynote address at Day One of the Airline Engineering and Maintenance: Middle East Conference 2013 - this year held in Amman, Jordan. Ain proceeded to give the audience some impressive facts and figures about the region: that the Middle East and North Africa account for almost one third of the world’s population and nearly 16 per cent of global GDP. He added that most of the region’s population is below 35 years of age and therefore “very young” by international standards.
In addition to these strengths, however, Ain admitted that the region battles “a very unique” operating environment - a corrosive combination of sandy and saline conditions which adversely affects aviation operations. Nonetheless, aviation in the Middle East is evidently going from strength to strength. As Ain explained to the audience, the industry has transformed from being the privileged preserve of government officials into a commercial business spearheaded by major airlines such as Emirates, Etihad and Qatar Airways. He said the region has experienced “incredible growth” during the last 30 years, incorporating “massive” airport expansion in Jordan, Dubai, Abu Dhabi, Oman, Qatar and Saudi Arabia plus the development of related facilities such as maintenance, repair and overhaul (MRO) facilities and training centres.
Looking ahead, the Middle East is set for even greater expansion over the next few decades; Ain predicted that the region will even overtake China in terms of traffic growth by 2029. This will be supported by substantial fleet expansion starting with the current total of over 800 firm aircraft orders. Ain said the region has placed 20 per cent of global widebody orders and leads the world with firm orders for the A350 XWB and the 777, accounting for 40 per cent of the backlog for these aircraft types. Moving on to MRO, Ain noted that, while global growth in this sector will increase from $31bn at present to $67bn in 2022, the Middle East will see a 6.4 per cent compound annual growth rate (CAGR) – second only to Latin America. He added that the Middle East’s market share growth will increase from 6.9 per cent in 2015 to 9.2 per cent in 2022. In Ain’s opinion, the recent political difficulties in the region which adversely affect business will not prevent this sizeable growth.
However, Ain emphasised the need for the predicted growth to be supported with appropriate infrastructure and manpower. At the moment, he said, there are a limited number of engine and airframe MROs and training centres for aviation specialists, with much of the available manpower coming from the Far East, India and Pakistan. One of his key recommendations is to establish effective training programmes to make the most of the region’s young population – and another is to encourage elite professionals living in the US and Europe to migrate back to the Middle East and help to develop the local market. The need to keep the industry well-supplied with qualified personnel would be a recurring theme at Airline E&M: Middle East.
Ain’s keynote address was followed by a comprehensive market overview from David Stewart, VP, ICF SH&E, UK. According to Stewart, the global air transport fleet – presently comprising 27,000 aircraft, including turboprops - is set to grow at a rate of 3.1 per cent per annum up to 2022, with the Middle East growing faster than any other region, at 5.7 per cent. Meanwhile, global MRO spend will increase by 4.1 per cent per year from $59bn to $85bn (based on 2012 dollar figures), with the growth concentrated “emphatically in the Middle East and Asia” and Western Europe appearing “quite anaemic” by comparison. Stewart said the 8.5 per cent annual growth in MRO spend in the Middle East – “a very strong growth rate by any stretch of the imagination” - is being led by the national carriers, such as Emirates, Qatar Airways, Etihad and Saudia.
Looking at the specifics of MRO within the Middle East, Stewart explained that the airframe maintenance manhours required to support a fleet within the region have increased from eight million to just over 14 million, at a rate of 6.6 per cent per annum. “That clearly has a significant implication,” stated Stewart – “Is there enough capacity in terms of the skilled labour to support this growth?” This leads to further questions as to how to: train and retain the labour, ensure the supply chain and fulfil all requirements cost-effectively without having to bring in personnel from abroad. On the engine side, Steward pointed out that - largely due to the large number of widebody deliveries over the past ten years - the number of shop visits has increased from 300 to 500 per year, representing a seven per cent annual growth rate. He added that such growth will involve both challenges and opportunities in the supply chain.
Day One moved on with a panel session entitled ‘Assessing fundamental changes to the MRO landscape’, which featured representatives from MTU Maintenance, Mideast Aircraft Servicing Company and JorAMco. A brief refreshments and networking break was followed by an airline round table on ‘Working together to improve efficiencies, reduce costs and share resources across airlines in the region’, with contributions from DHL Aviation, UIMAS, Saudi Arabian Airlines and Petra Airlines.