In-house demand remains the main growth factor for the MRO industry in the Middle East

Since the beginning of the year, the Middle Eastern airlines have been maintaining the strongest growth rates in terms of international passenger traffic. According to IATA, the double-digit traffic growth backed by almost 12% capacity expansion will eventually ensure local carriers $1.5 billion profit by the end of the year. But will the rapidly growing local fleet trigger a higher demand for MRO services and technical specialists within the region?

‘The Middle East is a perfect transition hub for the global air transportation industry, successfully exploited by local airlines. Endeavouring to meet the future demand, the region has placed orders for almost the same amount of new aircraft as it already exploits. With this in mind, the local MRO demand is forecasted to grow by 7-8% annually, almost double the world’s average,’ commented Kestutis Volungevicius, the Head of FL Technics Training.

Currently the local MRO industry is mainly focused on widebody aircraft, which contribute to somewhat 75% of the annual MRO spending in the region, reports ICF SH&E. Furthermore, over 50% of the upcoming deliveries will correspond to such large aircraft as Airbus’s A350, A380, Boeing’s 777s, 787s, etc. ICF SH&E forecasts, that as a result of the rapid expansion,  in less than 10 years’ time the Middle Eastern airlines will require over 14 million manhours on airframe heavy maintenance annually,  70% of which will have to be dedicated to widebody airplanes.

But airframe maintenance is not the only segment to grow. With the local engine MRO demand to grow up to 700-730 annual Shop visits by 2022, local players are actively developing their capabilities. They are planning to launch several new Engine Shops during the upcoming 2-3 years alone. As a result,  the industry players will immediately create several hundreds of new jobs for engine maintenance and other technical specialists.

‘Gulf airlines are the main factor contributing to the development of the local MRO industry. However, such countries as the United Emirates, which alone generates practically one third of the local demand, have vast in-house MRO capabilities. Meanwhile, many other carriers are outsourcing maintenance works outside the region, either to Europe with its well-established MRO base, or Asia-Pacific, offering cheaper man-power. Basically, being a perfect transit spot for passenger transportation and cargo logistics, the Middle East is also an exceptionally geographically convenient region for local airlines to send their aircraft for maintenance either to the West, or the East. With regard to the situation, the demand for new MRO specialists will be supported mainly by in-house needs of local airlines rather than by third-party carriers,’ commented Kestutis Volungevicius.