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Aircraft maintenance, repair and overhaul providers (MROs) need to forge alliances to create synergies amid global supply chain disruptions, according to a Saudi Aerospace Engineering Industries (SAEI) executive.
The airline industry is in the middle of a post-pandemic rebound, but supply chain bottlenecks have left aircraft manufacturers scrambling for raw materials and components.
“For many years, airlines have had alliances and codeshares, but MROs in the region and globally have competed with each other for way too long,” Majed Sabbagh, vice president of shared services at SAEI, said at the Middle East and North Africa Business Aviation Association (Mebaa) show in Dubai on Wednesday.
“It's time to co-operate … it's time to complement each other rather than competing.”
The global MRO industry is expected to grow to a $1 trillion business over the 2022-2031 period, according to Aviation Week Network.
Meanwhile, engine MRO demand will grow at 3.7 per cent, which will boost the market size to $474 billion over the next decade.
Specifically, the Middle East demand for MRO services will grow to $12.9 billion by 2031.
Russia’s invasion of Ukraine and Covid-19 lockdowns in China have worsened global supply chain problems.
“Many original equipment manufacturers and operators have been pressuring tier one suppliers to enhance and increase the stock where they're staying,” Mr Sabbagh said.
“We're seeing more localisation and domestic onshoring.”
Supply bottlenecks have also affected corporate plane makers as the pandemic led to an unexpected surge in business.
A record for global business jet demand was set in the first half of this year and although the rebound is slowing, the gains on 2019 have held steady at about 20 per cent, according to a report by data research and consulting company WingX Advance.
“We are still impacted by bottlenecks in logistics, whether it is sourcing parts, new technology or equipment,” said Fahad Al Jarboa, chief executive of Saudia Private Aviation (SPA).
“There are bottlenecks in chip making and if China doesn’t recover soon from Covid and open up for business, that’ll be a challenge too,” Mr Al Jarboa said.
SAEI and SPA are subsidiaries of Saudia Group, the kingdom’s flagship airline.
In October, Saudia signed an initial agreement with German air taxi developer Lilium to buy 100 of its aircraft to serve its domestic network.
Lilium’s electric Vertical Take-Off and Landing (eVTOL) vehicles could ferry passengers onward to Mecca or AlUla from the regional air hub of Jeddah, Mr Al Jarboa said.
“It’s an interest proposition … it’s just a question of whether it can be economically feasible, given the number, capacity, the technology and the routing,” he said.
The kingdom's Saudi Aviation Strategy calls for tripling annual passenger traffic to 330 million by 2030, boosting the number of destinations to 250 from 99 at present and establishing a new flag carrier. This strategy is backed by $100 billion in investments from the government and private sector.
Saudi Arabia's push to develop its air transport sector is part of the Vision 2030 plan aimed at diversifying its economy away from oil.