Aviation MRO aftermarket faces specific challenges in Middle East

13 February 2019 Consultancy-me.com

Aviation sector executives have gathered in Dubai to discuss the local MRO market, with a number of challenges specific to the Middle East region.    

Organised by industry publisher and event producer Aviation Week Network, the MRO Middle East conference has wrapped up for 2019. Prior to the event, senior members of Roland Berger’s Aerospace & Defense practice spoke to MRO-Network.com on some of the aviation maintenance and repair issues specific to the Middle East market, such as the hot and sandy local environment.

Held at the Dubai World Trade Centre from the 10th to the 12th, the 2019 MRO Middle East conference and exhibition brought together more than 150 senior professionals from the aviation aftermarket for discussions around topics such as innovation in MRO (maintenance, repair and overhaul), optimisation and cost reduction strategies, and big data, prognostics and predictive maintenance.

Among the speakers for the event were Robbie Bourke, Vice President of Oliver Wyman aviation subsidiary CAVOK, providing a regional industry overview and forecast, and Roland Berger partner Richard Paton, who moderated a panel on the local threats, trends and aftermarket growth opportunities in the Middle East – featuring among others senior leaders from Etihad Airways Engineering and Jordan Aviation Airlines.Challenges remain in Middle East aircraft maintenance segmentPrior to the conference, Paton – who was recruited as a partner last year to Roland Berger's Bahrain office – spoke to Aviation Week Network-affiliated industry media site MRO-Network.com on the local market challenges, alongside UK-based Roland Berger managing partner Robert Thompson. One of the most challenging issues: the hot and sandy Middle Eastern environment.

Naturally, such conditions are not ideal for aircraft, and especially their engines. But delving deeper, Thompson further note the rapidly expanding fleets in the region – with recent departure growth estimated at around 6.5 percent – but an ageing profile, as the moderation of oil prices and economic slowdown have delayed retirements of older aircraft and curbed the number of new deliveries.

Yet local MRO operators – serving an industry which is forecast to grow by 4 percent globally over the next decade to $115 billion – are lacking price competitiveness due primarily lack of home-grown workforce and thus higher labour costs, with international outsourcing the result. Still; “For engine and component services, where labor is a smaller portion of total costs, Middle East providers can be competitive,” says Thompson.

Particularly, he adds, if they develop their capabilities by investing in facilities such as test beds for engines. Here, there has already been some movement, with new MRO facilities in the UAE and in Jeddah – the latter said to the largest in the world – to provide a more competitive landscape. But, more investment will be needed, concludes Paton, to ensure a stream of qualified local mechanics.


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EY estimates $33 billion boon to UAE economy from Expo 2020 Dubai

16 April 2019 Consultancy-me.com

Professional services firm Ernst & Young has outlined the potential economic impact of Expo 2020 Dubai to the UAE economy, concluding a possible $33 billion windfall in gross value add and a near 50,000 full-time equivalent jobs per annum to 2031.

With the Expo 2020 Dubai global showcase now just around the corner – and expected to attract 25 million visits from across the world during its six month schedule from October next year – professional services firm Ernst & Young has released an economic impact report for the event, calculating a US$33 billion (AED122.6 billion) boost of gross value added (GVA) to the local economy from 2013–2031 along with contributing more than 900,000 ‘job years’.

“Expo 2020 Dubai is an exciting long-term investment for the UAE, and is expected to have a significant impact on the economy and how jobs are created directly and indirectly,” said EY MENA Transaction Advisory Services partner Matthew Benson, adding; “Dubai aims to use the event to further enhance its international profile and reputation. The event will celebrate innovation, promote progress and foster cooperation, and entertain global audiences.”

According to the report, the six months of the Expo – the first to be held in anywhere in the Middle East, Africa or South Asia in the event’s 168-year history – will contribute around 1.5 percent of the UAE annual forecast GDP, with the analysts taking in ‘direct’ increases in economic activity, ‘indirect’ benefits of increased supply chain demand, and ‘induced’ benefits from increased spending by employees of participating firms to arrive at its $33 billion figure.EY estimates $33 billion boon to UAE economy from Expo 2020 DubaiConsidering further the planning and legacy phases, EY has in addition estimated AED 4.7 billion in investment to small and medium enterprises (SMEs) during the pre-Expo phase, supporting approximately 12,600 job-years, with the Expo expected to support more than 900,00 full-time equivalent (FTE) job-years in total in the Emirates from 2013 to 2031 – equivalent to some 49,700 FTE jobs. Meanwhile, strong legacy planning will ensure the ongoing benefits.

“Over 80 percent of the Expo built environment is planned to be retained for District 2020, and eventually expand into a city covering more than four million square meters,” states the report, adding that District 2020 aims to support the UAE’s future vision as to sustainable economic development and an innovation-driven economy, with a supportive business environment for key growth industries such as logistics and transport, tourism, construction, real estate and education.

“Although the Expo event lasts less than a year, the positive economic impact continues far beyond the event,” said Jamie Torrens, EY MENA’s head of Economic Advisory in its transaction advisory service division. “Across the period of our study, spanning the Pre-Expo, During-Expo and Legacy phases between 2013 and 2031, Expo 2020 is expected to support billions of dirhams of Gross Value Added (GVA) and thousands of jobs in the UAE.”

As a breakdown, the three largest impact areas across the full study period will be events organisation & business services (contributing over half of the overall figure) followed by construction and then hospitality, while transport, storage & communications will be another significant contributor during the life of the Expo and its planning phase. Retail will also see a boost during the legacy period, with nearly 550,000 jobs years created in this period across sectors.

“This independent report demonstrates that Expo 2020 Dubai is a critical long-term investment,” said Expo 2020 Executive Director Najeeb Mohammed Al-Ali. “Not only will the event encourage millions around the world to visit the UAE in 2020, it will also stimulate travel and tourism and support economic diversification for years after the Expo, leaving a sustainable economic legacy that will help to ensure the UAE remains a leading destination for business, leisure and investment.”

Related: Accenture and SAP roll out next-generation technology for Dubai Expo