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Mubadala streamlines MRO subsidiaries for success

Abu Dhabi's investment arm, Mubadala, is pressing on with integrating its two major MRO subsidiaries and expanding its capabilities in a bid to establish it as one of the sector's global powerhouses.

Details of the group's new engine overhaul shop in Abu Dhabi grabbed the headlines in December, but the more exciting question is: how will SR Technics and Abu Dhabi Aircraft Technologies be brought together? This will soon be revealed - "roughly in the first quarter 2011" was what Homaid Al Shemmari, Mubadala's executive director for aerospace, told the MRO Middle East conference in Dubai a year ago. So far, the two sister companies have largely been run as separate entities, with their individual management teams, marketing strategies and brands.

The group is "in the middle" of this integration process and is looking at "staff-leveraging perspectives within the two companies", says ADAT chief executive Jeremy Chan. Internal benchmarking determines where work packages can be accomplished most effectively.

GP7200 engines, Airbus
ADAT is targeting full GP7200 engine overhaul capability

There is capability overlap between ADAT and SR Technics, for example in airframe maintenance for Airbus widebodies. Some duplication is also likely in CFM International CFM56 engine maintenance, given that Abu Dhabi supports CFM56-5A models, while Zurich overhauls the -5B, -5C and -7B series.

SR Technics started an investment programme in mid-2010 to expand the engine part repair capabilities of its workshops in Zurich and Cork in Ireland. The group will always rationalise its production to become more cost-effective and achieve its longer-term goals, says Chan.

Al Shemmari also revealed last year that Mubadala was looking to set up additional maintenance facilities in North America and Asia, the main MRO markets outside Europe and the Middle East. He said a greenfield venture would be feasible, for example in India, but indicated that the group was more likely to open a North American site by acquiring an existing company. Either project would be realised within two to five years, he said.

To support its aspirations for global expansion, Mubadala has been steadily developing new capabilities over the past year, forming a number of OEM partnerships and joint ventures in the Middle East. Establishing shared MRO facilities with equipment manufacturers not only gives access to first-hand expertise - building skills to support new-generation aircraft is a major challenge apart from sheer fleet growth, according to Chan - but the co-operation also provides stability in a world of exclusive MRO contracts and ever-growing OEM involvement in the aftermarket.

Although it is not a formal joint venture between the two companies, General Electric is supporting ADAT in building a $150 million overhaul shop for GE90, GEnx and Engine Alliance GP7200 powerplants. The site will be part of GE's global MRO network and construction will begin by April, taking about two years.

Operations will be built up in stages and should reach about 200 overhauls a year. So far, ADAT has only been able to provide on-wing support for GE90 engines and full overhaul of CF6 series at its Abu Dhabi base. Its GP7200 capabilities will begin with module change and will grow to full overhaul.


The company also wants to move into other manufacturers' engine families. Full overhaul for International Aero Engines V2500 powerplants will be available by June. The current Rolls-Royce Trent 500 and 700 module change and testing capabilities will be extended to module overhaul by the end of the year.

Mubadala signed a joint venture last year with Goodrich to build the region's first dedicated landing gear overhaul shop in Al Ain, Abu Dhabi. The company will be operational in 2012, initially supporting Airbus and Boeing aircraft. This is expected to expand to other commercial types and military markets.

A deal with Honeywell turned ADAT and SR Technics into authorised service centres for avionics and mechanical components on various aircraft types, including the future Airbus A350 and Boeing 787. This will give the two companies access to materials, training and technical support from the OEM. The firms had already been co-operating, with SR supporting Honeywell mechanical components and ADAT supporting auxiliary power units.

With Sikorsky, Mubadala has agreed to establish an $800 million military-MRO joint venture - AMMROC - at Al Ain airport. Lockheed Martin has become an equal shareholder with Sikorsky. The intention is to create 4,000 jobs and reach customers as far away as south Asia.

Apart from growing technical capabilities, the company also plans to market more component management services for operators who want to outsource their supply chain demands. SR Technics has been running its ICS (Integrated Component Solutions) support programme for several years, but ADAT has less experience in this field. Also, Mubadala has launched the spare engine and rotable leasing company Sanad Aero Solutions (Sanad means support in Arabic), which uses both companies' maintenance capabilities.

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