The Middle East’s MRO sector has come under sustained pressure from Covid-19-related factors and appears likely to recover more slowly than overall fleet growth to the end of the decade, industry statistics show.
Oliver Wyman’s MRO Middle East 2021 outlook said that whereas the Middle East fleet shrank 24.1 percent in 2021 to 1,093 aircraft compared with the 2019 figure of 1,440, MRO spend fell 31.1 percent in the same period.
The regional fleet should grow later this decade. Oliver Wyman’s data show that by 2025 the fleet will grow 16.7 percent larger than in 2019, to 1,680 aircraft, and, by 2030, 56.6 percent larger, to just over 2,250 units. That would put Middle East fleet compound annual growth at 4.3 percent for the 12 years to 2030.
The Middle East accounted for 11 percent of global MRO spend, or $9 billion in 2019. The Oliver Wyman outlook forecasts the figure to fall to $6.2 billion in 2021 or 31.1 percent. It projects spending to grow by 2025 to $10.8 billion, up 20 percent on the 2019 level, and 27.8 percent by 2030, when the figure of $11.5 billion accounts for 10 percent of global MRO spend, according to the report.
“The Middle East fleet is expected to recover to its pre-Covid size in 2023, driven by strong narrowbody growth from new deliveries; by 2027 narrowbodies are expected to overtake widebodies as the most popular class in the region,” said Oliver Wyman partner Michael Wette in the outlook, published in June 2021.
As a result of deteriorating conditions during the pandemic, Middle East airlines have remained tight-lipped on their MRO operations. In its 2020-21 annual report, Emirates said that direct operating costs, including aircraft-related handling, in-flight catering, overflying, landing, and parking, crew layover, and aircraft maintenance expenses fell by 64 percent during the period, in line with the decrease in overall capacity.
“Primary capital expenditure comprising aircraft spend (including pre-delivery payments, aircraft, engines, and parts), major aircraft and engine maintenance costs and spare engines represented 93.3 percent or $1.28 billion of the annual capital spend,” it said. “This spend includes the addition of three A380s delivered this year.”
In April, Qatar Airways doubled its engine production capability by opening a 9,000-sq-ft facility to allow it to cut annual MRO costs by $2.2 million. “It is estimated the new facility will enable the airline to improve workflow by 23,400 man-hours per year, by centralizing its engine production and engine parts storage processes, increasing the number of its engine production lines from four to eight, covering a variety of aircraft engine types,” the airline said.
Saudi MROs continue to keep a low profile. Alsalam Aerospace Industries, the military MRO to VIP conversion specialist, and Saudi Arabian Aerospace Engineering Industries (SAEI), the MRO to national airline Saudia, saw their joint venture with Boeing—the Saudi Rotorcraft Support Company—awarded full Part-145 certification by the General Authority for Civil Aviation (GACA) in May. Fort Worth, Texas-based GDC Technics, an engineering and MRO specialist, announced an industrial partnership with SAEI in December 2020.
Jordanian MRO Joramco, an affiliate of Dubai Aerospace Enterprise, announced the appointment of Fraser Currie as CEO in September, while outgoing CEO, Jeff Wilkinson, takes up “an expanded role at DAE Engineering to grow the engineering division’s footprint,” it said.
Joramco announced a new maintenance agreement with Flydubai in March, marking a continuation of the long-term partnership between the two companies that began in 2013. “The new agreement includes all due C-checks on the carrier’s Next-Generation Boeing 737-800 aircraft. Checks began March 1, 2021, and are set to continue through December 2021,” it said.
Boeing’s Commercial Market Outlook (CMO) for 2021-2040 projects that the Middle East would require 51,000 new maintenance technicians, a slight but notable decrease in the figure compared with the 2012-2031 CMO’s forecast of a need for 53,700 such individuals. IATA’s Annual Review 2021, published October 4, outlined the challenge in uncompromising terms and may explain the slight fall in forecast numbers.
“Thousands of highly skilled individuals have left the industry through layoffs and retirements,” it said. “The task of retraining licensed personnel who are coming back from months of furlough and inactivity is huge. Equally enormous is the job of returning thousands of parked aircraft to service at a time when the maintenance, repair, and overhaul (MRO) and parts supply chains are stretched thin.”