Middle Eastern fleet development: it’s not the size that matters

Fuelled by the oil prices of around $124/b and a solid performance in the non-oil producing sectors aviation in the Middle Eastern continues on its path of staggering growth. It has already outpaced the global average with regard to traffic numbers. One of the main drivers of such a success remains the aggressive fleet expansion strategy of such major carriers as Emirates, Qatar Airways or Etihad Airways. However, as the new machines are being delivered, local carriers are beginning to face the challenging maintenance-related reality.

As the economies of Saudi Arabia and the United Arab Emirates continue to maintain their strong positions, the region has developed an increased demand for air travel. There’s no surprise that the local airlines wish to capitalize on the highly favourable circumstances through implementing a variety of growth strategies, including alliances, partnerships, development of low cost services, and, most importantly, fleet expansions.

One of the best examples of the latter remains, of course, the Dubai-based Emirates airline. While back in 1985 it began service with a leased Boeing 737 and Airbus 300-B4 only, today the carrier has more than 200 aircraft, and is expecting the delivery of another 13 A380s this year. Moreover, during the last year’s Dubai Air Show Emirates placed a record order for 150 Boeing 777s (with options on additional 50), along with an order for 50 A380s. However, such a huge expansion of the fleet may prove exceptionally challenging, even for such a solid airline as Emirates.

“Today more and more industry players are seeking to meet the rising demand for air travel. Many of them tend to invest into younger aircraft that offer more economic opportunities. However, the physical preparation for welcoming the delivery of the new aircraft while maintaining the current fleet can become a major challenge,” comments Andrius Norkevicius, COO of FL Technics Engineering. “For instance, Emirates is expecting to take in 25 of its new A380s just within the next four years. At the same time it will still have to deal with the maintenance of the other aircraft in operation as well as prepare its older fleet of leased A330s and 340s for return. As a result, the carrier will need to build additional hangars at its base airport. Similar challenges are awaiting other major industry players in the region, too. However, are such investments really necessary?”

According to Andrius Norkevicius, while operating a large young fleet is appealing, there are other options that can ensure the reliability and predictability of a fleet. For instance, Delta Air Lines, which has the second-largest mainline fleet in America, also has the smallest order backlog. Rather than buying new aircraft only, the carrier is substantially investing (the planned sum tops $770 million) in spares, cabin refurbishment and new seats thus increasing passenger comfort, raising the capacity and maintaining the appeal. As a result, in 2013 Delta's 740-aircraft mainline fleet logged about 120 days - 2-3 each week - without a single maintenance-related cancellation. Moreover, it went the entire October without a single domestic cancellation and claims to have achieved the highest flight completion percentage (99.7%) among U.S. majors as well as a net profit of $2.7 billion. All of that whilst operating a fleet that averages 17 years of age.

“The preparation for introducing new aircraft is not cheap. A carrier with a fleet of 200 or more aircraft and another 200 aircraft on their way will naturally face the undercapacity of its infrastructure. The more so if the existing fleet consists of wide-body machines. Moreover, the next-generation aircraft rely on many advanced repair and inspection techniques such as NDT, which imply personnel qualification-related headaches,” explains COO of FL Technics Engineering. “Meanwhile, even the manufacturers say that with higher-density seating configurations and such comfort-related upgrades as Wi-Fi and other, you can actually take advantage of a mature fleet. All it takes is a more aggressive management and control of your maintenance strategy.”