Abu Dhabi Aircraft Technologies has begun work on a dedicated Etihad hangar as part of $500 million deal.

The company has begun constructing the dedicated single bay, line and light maintenance hangar for the UAE’s national airline Etihad as part of a $500 million, five-year maintenance, repair and overhaul (MRO) pact between the two, the company said in a statement.

Developed to service Etihad’s fleet of 14 A330s, nine A340s, 6 A320’s and five Boeing 777-300ERs, the hangar, to be completed in July this year, will significantly improve turnaround times – a vital facet of the Abu Dhabi Aircraft Technologies’ total care provider strategy, it added.

“The cornerstone agreement with Etihad is integral to maintaining our standing as the Middle East’s leading MRO, and the development of this dedicated facility underlines our commitment to providing world-class turnaround times through total maintenance solutions and classic MRO services,” said Abu Dhabi Aircraft Technologies chief executive officer John Byers.

“Etihad is expanding rapidly, both in terms of fleet size and network reach, and ready access to reliable MRO services is crucial to its growth strategy. The solid working relationship between us reinforces the UAE capital’s reputation as a leading emerging aviation centre of excellence.”

The Etihad accord, signed last November, was the first sealed by Abu Dhabi Aircraft Technologies since its re-engineering from the former Gulf Aircraft Maintenance Company (GAMCO). The re-launch of the company was part of a long-term strategy of targeting a $800 million revenue stream by 2012.

Under the agreement, Abu Dhabi Aircraft Technologies provides award-winning Etihad with integrated MRO solutions, covering airframe services, including 'A' and 'C' checks, technical, procurement & logistics and engine services including its innovative Total Care Auxiliary Power Unit (APU) Support product - a first-of-its-kind in the sector.

With Abu Dhabi Aircraft Technologies predicting a 7.3 percent compound average growth rate for the MENA region’s five year MRO addressable market, Byers believes the addition of new facilities is key to securing a sizeable share of the forecasted expansion.

“As the Middle East is currently a net importer of airframe work, not an exporter, airframe MRO capacity exceeds demand. However there is significant under capacity in terms of engine and component MRO, with a very high proportion of both currently being exported,” said Byers.

“Future demand for hangar facilities should be met by modest growth of existing regional MRO providers. The planned expansion of local facilities will keep up with airframe MRO demand in the short term, however if more engine and component overhaul demand is to be satisfied locally, there is a clear requirement for new facilities.

“The market dynamics of the engine and component repair business - primarily the need for large work volumes to justify capital investments - tend to require and attract OEMs who understand that a partnering climate is necessary.” – TradeArabia News Service