The decision of the Abu Dhabi government to pull out of Gulf Air – leaving just Bahrain and Oman as shareholders – leaves a question mark hanging over the future of Gulf Aircraft Maintenance (Gamco), the region’s only big third-party maintenance, overhaul and repair (MRO) player, which was set up as a joint venture between the airline and the Abu Dhabi government in the late 1980s.
Gulf Air owns 40% of the company and provides about half of its revenues. Yet the majority shareholder, the Abu Dhabi emirate, is now backing its own horse – Etihad. This airline’s headquarters sit next door to Gamco’s 55-hectare facility at Abu Dhabi airport and its rapidly expanding new fleet is beginning to pass through Gamco’s hangars and workshops. The carrier shares a chairman with Gamco and its support is likely to prove crucial.
Gulf Air – as well as Etihad – is treated as a third-party customer and is free to take its business elsewhere as long as it pays compensation for contracts signed, insists general manager Saif Al Mugharir, who has steered a financial turnaround at Gamco since he and chairman Sheikh Ahmed Bin Saif took charge in early 2001. He says the business can ride out whatever Gulf Air decides to do.
Etihad and Gulf Air – together with another new UAE carrier, Air Arabia, based in the emirate of Sharjah – account for 90% of its sales, but Gamco does not depend just on its home market. The company does business with 70 airlines and air forces because, says Al Mugharir, it offers a range of heavy overhaul services – from near-destructive testing to repair of composite parts – that few in Europe or even North America can match.
“We have equipment here, such as a high-speed grinder, that it is very unusual to have under one roof,” says Al Mugharir, who adds that the company has spent $10-$20 million a year over the past three years on equipment and infrastructure, all of it self-generated investment. “We get no money from the Abu Dhabi government,” he says.
A map on the office wall shows the company’s plan to double the size of the facility over the next five years, with a composite shop opening early next year and a hangar capable of taking three Boeing 777s coming on-stream in 18 months. There will also be a centre to overhaul Thales in-flight entertainment equipment, a joint venture with the European company.
Gamco is increasing its military business too – currently only about 5% of its revenues – shortly taking over the upkeep of the UAE armed forces’ Lockheed Martin C-130J and Casa transports at a nearby airbase. It also carries out maintenance support for the UK Royal Air Force’s Lockheed L1011 TriStars.
Like most aviation businesses in the Gulf, it recruits from around the world – its 2,000 staff represent 50 nationalities. Al Mugharir admits that lower labour costs – taxes in the UAE are virtually non-existent – help give Gamco an edge over European competitors such as Lufthansa Technik and SR Technics.
Source: Flight International