Gulf Air and SR Technics sign MOU on maintenance
Gulf Air has announced that it will sign a Memorandum of Understanding (MOU) with Swiss-based SR Technics Holding (“SR Technics”) in terms of which SR Technics will assume total responsibility for the maintenance, repair and operation of the airline’s fleet in a five-year contract valued at USD750 million. The MOU also makes provision for the establishment of an aircraft maintenance facility and training centre to be based in the Sultanate of Oman.
Commenting on the announcement, Gulf Air President and Chief Executive James Hogan said: “We have been very fortunate in having had the benefit of world-class maintenance service from GAMCO. And I would like to thank GAMCO and the government of Abu Dhabi for their outstanding support and service during our very positive relationship.”
“Now, following the change in our shareholding structure in the light of Abu Dhabi’s withdrawal, and our move to a two-hub model, it is no longer commercially or operationally viable to continue our maintenance services out of Abu Dhabi, and as a result we have had to explore other options that will minimise our cost base while ensuring efficiency and high service standards.”
The Oman based USD50 million three-bay hangar and maintenance facility in which Gulf Air will have a ten per cent shareholding, will provide maintenance solutions, based on customer requirements, to include aircraft and component services, technical training, logistics, on-wing and light engine services and engineering for Gulf Air and other third party customers.
Using its Integrated Airline Solutions (IAS*) product, SR Technics Switzerland will provide full fleet technical management for Gulf Air’s fleet which presently comprises ten A320, six A330, nine A340 and nine B767-300 aircraft. While fleet management will be undertaken from Switzerland underpinned by a powerful, integrated IT system, maintenance and repair services will be provided through the joint venture, local partnerships and SR Technics global component logistics network.
“After fuel, maintenance is our second highest operating cost,” said Mr Hogan. “In the first step to address this, we concluded a rotables maintenance agreement with Lufthansa Technik at the end of 2004. Building on the savings achieved this agreement with SR Technics is expected to result in further savings of about USD190 million or 24 per cent over the five year period, while delivering world-class maintenance services.
Another significant feature of the new agreement is that the maintenance planning function reverts to Gulf Air, facilitating more efficient utilisation of our assets and giving greater control over costs.”
“However, on a broader scale, the cumulative benefits to the local economy are significant with suggested estimates of at least one percent to the GDP of the Sultanate,” said HE Shaikh Mohammed Al Harthy, the Minister of Transport of Oman. “When fully operational, the joint venture will create jobs for in the region of 850 skilled and professional people, over the initial five year period. In addition to the enormous employment opportunities the venture presents for Omanis, a subsidiary maintenance training centre will also offer world-class technical training for airline maintenance engineers and technicians for the regional industry.”
“It will also create an environment in which downstream businesses and industries can develop and flourish, generating further revenue and employment opportunities.”
This joint venture (JV) is a significant development for SR Technics in the Middle East and supports its overall global growth strategy and confirms our commitment to the region.
Commenting on this significant development, Frank Turner, Chairman, SR Technics said: “The signing of this MOU is a first step for SR Technics in establishing a physical presence in the Middle East which we see as a key growth region in the aviation services sector. We believe that SR Technics is offering a uniquely different proposition to customers through our integrated solutions concept and airlines can see the cost benefits and the overall attractiveness of having a single, capable, experienced and quality technical services partner. Our repeated success over the past year, and this decision by Gulf Air indicates that we have the right proposition, flexible to be tailored to each customer’s requirements and combining SR Technics and local expertise to deliver.