SR Technics closes Dublin base

SR Technics (SRT), a European aircraft maintenance firm partly owned by Mubadala Development, is closing a major facility in Ireland. After losing contracts recently with airlines such as Aer Lingus and Gulf Air, coupled with the unlikely prospect of a quick turnaround in the global economic downturn, SRT said it decided to close the base, which employs 1,135 personnel, as part of a wider restructuring plan. Two other SR Technics facilities in Europe remain open. "We are announcing this deeply regrettable and difficult step only after an exhaustive evaluation of all strategic options for our group-wide operations," said Bernd Kessler, the chief executive of SRT. The global airline industry is in turmoil as falling demand has forced carriers to cut routes and frequencies. The industry could lose US$2.5 billion (Dh9.18bn) this year and traffic could decline 3 per cent, the International Air Transport Association said. Mubadala, an investment arm of the Abu Dhabi Government, is the largest shareholder in SRT after linking with Istithmar and Dubai Aerospace Enterprise to purchase the company for $1.3bn in 2006. Mubadala owns a 40 per cent stake, with Istithmar and Dubai Aerospace - both controlled by the Dubai Government - holding 30 per cent stakes. SRT is now in a 30-day negotiation period with trade unions. A Mubadala spokeswoman said the decision to close the Dublin facility "reflects the impact of the current economic crisis and the downturn in the aviation industry generally". "After careful consideration, the board approved the wider restructuring plans presented by the leadership team," she said. The base was one of SRT's three main European stations, handling maintenance for aircraft and components including landing gear and auxiliary power units. Aer Lingus cancelled its contract with SRT last year in a cost-cutting measure, while Gulf Air last month decided to re-tender its maintenance contract to other firms and also bring more of its work in-house. Executives of SRT, which employs more than 5,000 people in total, said Mubadala was guiding the company through the restructuring process and would increasingly look to find synergies with Abu Dhabi Aircraft Technologies (ADAT), also owned by Mubadala and based at Abu Dhabi International Airport. "We are now a Middle East company and want to grow together with ADAT," said an SRT official. SRT and ADAT have already jointly bid on airline maintenance contracts where the two companies could complement each other. Examples include a pending components bid with Etihad Airways and a maintenance proposal for FlyDubai, the new budget airline being launched this year by the Dubai Government. [e-mail]