Face off

Obaid Hableel, chairman and CEO of aircraft maintenance provider Hableel Aviation Group, on challenging the Middle East's MRO monopoly.

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By  Administrator Published  February 18, 2008

Obaid Hableel, chairman and CEO of aircraft maintenance provider Hableel Aviation Group, on challenging the Middle East's MRO monopoly.

How strong is the MRO industry in this region?

Hableel Aviation doesn’t want to be specific to any airline because we are not a flag carrier or national institution.

Each one hour flight costs around $1000 in MRO, so if you take the aircraft in the region and multiply it by 4000 hours, which is average hours per year, it gives you business.

Today, in the GCC maintenance, repair and overhaul is a $2.5 billion business. Normally 70% of this business is going to three or four specific entities outside the region.

In the meantime, we have the downside of this which involves sending the equipment to international agencies.

We have difficulties getting the components, equipment or engines back on time. We have to wait in a queue and it's first come, first serve. The whole process lasts nearly one year, so during this period the end-users are suffering delays.

This means they have to buy more engines and components, so it's all calculated to make people buy more equipment and wait. You are increasing demand on certain services that have limited supply, leading to higher prices and manipulating the market.

Ultimately, three to four users in this area have consistent pricing and vested interests. They also have political and national alliances, so lots of airlines have agreed strategic partnerships with these specific service providers.

If we have 1000 aircraft in the region, they are divided between four or five users and all of them already have partners in one form or another. They agree on pricing structure, so today the objective is to break the monopoly.

How will you break that monopoly?

We break it by providing better service and turnaround times. Our services are carried out in this region near the customers and they are directly involved in the repair processes.

They will make the decisions for the costing, making it faster and more efficient. If an invoice is sent across the continent you have no choice but to pay it whether you like it or not.

That will not be the case here. Price structuring takes into consideration transport costs and taxes, which are usually 15-20% higher outside this region.

If we can provide similar services for cheaper rates without the tax and transport costs we are providing one third of our rivals' costs.

So there are few MRO providers in the UAE?

Today, people are obliged to go outside the UAE because there is no alternative here. There are a few establishments here, including GAMCO (now ADAT). This institution was built to support Gulf Air and Tristars.

It was built as a base maintenance operation to carry out checks - it wasn't designed as an MRO. It was designed for aircraft which today is obsolete. The facility can support Tristars, with companies coming to GAMCO for maintenance.

They are highly skilled in Tristars but we are not in the Tristars age - we are in the A380 age. The A380 doesn't fit their hangars and they don't have the tools for them.

We have a big facility in this region, which is Emirates Engineering. It is highly advanced and very modern. It is designed for the A380. However, Emirates Engineering Services was designed to support it's in-house equipment, so the people in charge are doing a tremendous job to keep their fleet in the air.

They are also having difficulty supporting expansion. Every other day, Emirates is buying more aircraft but doesn't hire more people to support those additional planes.

How are you different to other providers in this region?

We support other airlines in the region. We don't want to be specific to any airline because we are not a flag carrier or national institution.

It gives us flexibility to provide effective and cost efficient price structures to the people who like to receive our service. Everybody in this region is lacking these services.

Which airlines do you work with?

I have three airlines committed to work with me and we are dealing jointly with them. For example, there is a need to offer these services in Ras Al Khaimah so we will go there and support our client.

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