Alsalam looks to the future

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Twenty years after it was established under an economic offset initiative intended to bring engineering skills to Saudi Arabia's domestic workforce, Alsalam Aircraft is profitable and ready to expand its military and commercial maintenance, repair and overhaul activities, and to begin assembling advanced combat aircraft, says chief executive Mohammed Fallatah.

Boeing has supported operations since 1990, and now has a majority holding in the Boeing Industrial Technology Group, which owns 60% of Alsalam and has a 50% vote in its activities.

Rough road

Alsalam has been in profit for the past five or six years, says Fallatah, who concedes it has taken much work to reach this position. "We had a rough road at the beginning," he says. "When I came here it was open land with empty space and an empty hangar. We lacked engineering skills."

Today, the company has 2,850 employees, including more than 1,300 at its facility bordering Riyadh's King Khalid international airport and the rest at Royal Saudi Air Force bases. The Riyadh site has, as its centrepiece, a structure combining three hangars, each able to house a Boeing 747-400 airliner. A separate hall provides maintenance for up to eight Boeing F-15 fighters, with workshops manufacturing parts, composites and carbonfibre structures.

Military activities dominate Alsalam's orderbook, representing 75-80% of its work each year. The company has supported more than 135 military aircraft since its formation, including F-15 and Panavia Tornado fighters, Boeing E-3A airborne warning and control system aircraft, KE-3A tanker/transports, and Boeing AH-64 Apache and Sikorsky UH-60 Black Hawk helicopters.

Within two months, Alsalam expects to receive a contract for final assembly of 48 of the RSAF's 72 Eurofighter Typhoons (Flight International, 4-10 March). Its first example will be delivered in 2011, with in-service support to be provided with BAE Systems.

Fallatah says an assembly location has yet to be agreed, but he expects it to employ 400 people, including 200 Saudi nationals. This would be close to Alsalam's current structure, which has a domestic workforce of 58%. But building employee numbers is not the major objective with the Typhoon. "We want to transfer real technology here," he says.

Programmed depot maintenance on the RSAF's Lockheed Martin C-130 transports will begin in Jeddah next month, and Alsalam will bid for a requirement to add a glass cockpit upgrade, drawing on Boeing's avionics modernisation programme for the US Air Force. Upgrades are also pending at Riyadh on the F-15S and four E-3As, which are to receive Link 16 datalinks.

Alsalam has also finalised an agreement with EADS Casa to conduct in-country modifications to two of the RSAF's future three Airbus A330-based tankers, opening up a market to support the widebody type in the Middle East. With commercial models including the A300-200, Boeing 727, 737, 747 and Lockheed L-1011 already on its books, the company also hopes to gain future deals to support the Boeing 777, MD-11 and MD-90.

More than 250 airliners and privately owned aircraft have also been maintained in Riyadh since 1993, including over 50 for foreign users - business worth nearly $40 million, says Khalid Abuljadayel, vice-president, commercial operations. Current users include Kabo Air, Sama Airlines and Shaheen Air International.

Other commercial activities include VIP modifications. Work will start in October to equip three L100 Hercules with new interiors and glass cockpits to support royal transport duties.

Alsalam faces commercial competition from nations such as Indonesia, Jordan, Singapore and the UAE, including in retaining its skilled employees. "New companies in the Gulf have been hitting us hard," says Fallatah.

Alsalam conducted business worth about 740 million rials ($200 million) last year, including 140 million rials for commercial customers. "We have had great success here," says Torbjorn Sjogren, Boeing's vice-president, International Support Systems.

"Fifteen years ago, Saudi Arabia used to send its aircraft all over the world," says Fallatah. "Today there is a company that can do all of this in country. We have evolved."