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Doan, who will be speaking on the first day of next week's inaugural MRO Middle East Conference & Exhibition (MRO ME), running from January 21-22, 2009 at the Dubai Airport Expo Centre in Dubai, UAE, also stated that while MRO demand is likely to fall in the near future, due to increasing global economic pressures, MRO providers need to address certain opportunities in readiness for when the airline industry recovers.
"The 10-year MRO forecast is robust despite the current global economic situation. Looking back through the past three or four decades, world airline growth has remained solid despite interruptions every eight to 10 years due to global economics. After each slowdown, there has been a surge of growth responding to pent up demand,"
said Doan, who will be addressing the seminar: 'The market forecast over the next 10 years for the Middle East and the implications for the region and the world' at the MRO ME conference.
"The obvious immediate issue is that MRO demand is trailing off as airlines rationalise fleets and schedules due to decreasing passenger and cargo demand in the midst of the worldwide economic crisis. With MRO requirement set to grow as the airline industry recovers, there are longer-term opportunities that must be addressed to ensure post-recovery success".
Doan outlined three major areas which MRO companies need to focus on over the next 10 years to make sure their market propositions continue to be worthwhile; outsourcing, human resources and speed and quality.
"Outsourcing will remain a priority among airlines if there is an appealing value proposition for doing so. While each MRO business must make some careful strategic decisions in this regard, certainly one of the major trends points to 'integrating services' i.e. less complication for the airline customer in dealing with the significant MRO requirements and more real value in the outcome as a result," he said.
"In addition, MRO providers need to develop a strategy for dealing with the worldwide human resource shortage that threatens to constrain the business if not adequately addressed. The supply/demand theory would also indicate that salary and labour costs will be escalating which will, in turn, impact the value proposition for outsourcing.
"Lastly, speed and quality are two attributes which can be leveraged to increase the value proposition. Faster and more predictable turn around-times coupled with improvements in quality are easy to say but hard to do. More and more MRO providers are turning to lean strategies to improve, some with impressive results."
Doan also said that the Middle East has a geographical edge when it comes to marketing services to Eastern Europe, Africa and Asia, an area which has a combined MRO market worth of over $14bn. However, he believes that the region has certain barriers which it must overcome before it can successfully capitalise on increased market share.
"The Middle East is clearly central to Eastern Europe, Africa, and Asia, including India and China, which provides a natural geographic advantage in marketing services in those regions. To be competitive though, it must be easy to do business without delays from immigration, customs, or without extraordinary risks. There also needs to be a keen business focus on creating other advantages to doing business in the Middle East rather than in one of the adjacent regions - a value proposition which is appealing and compelling for the airline customer," said Doan.
"While the Middle East aerospace industry may be healthier than other areas at the moment, the region includes some inherent barriers that make it difficult for players from the East or the West to enter. It is also important to consider that outsourcing decisions tend to be awarded within operators' regions when possible to reduce the time and expense of longer travel times. It takes a compelling value proposition to overcome that reality."
MRO Middle East is produced by Aviation Week Conferences & Exhibitions and F&E Aerospace, in association with Overhaul & Maintenance. During two days of intensive sessions and workshops, industry leaders will discuss the necessary next steps for the region, where air transport is a catalyst for growth, economic development, and job creation. In addition to HH Sheikh Ahmed Bin Saeed Al Maktoum, President, Dubai Civil Aviation Authority, and Chairman of Dubai Airports & Emirates Group, keynote presenters include Abdulla Al-Hudaid, Vice President of Maintenance and Engineering, Jazeera Airways; Andrew Cowen, CEO, Sama; and Steffen Harpoth, CEO, Silver Air. The full list can be found at http://aviationweek.com/conferences/mmemain.htm.
MRO Middle East will also host an exhibition hall with over 100 MRO product and services suppliers featuring the latest in service and technology. In addition, visitors from 36 countries, with representation from USA, Europe, Great Britain, Asia and Middle East, will attend the event.
The platinum sponsor is Dubai World Central Aviation City. The gold sponsors are Goodrich and Pratt & Whitney. The silver sponsors are Europe Aviation, Lufthansa Technik, Messier Services, Airbus and SR Technics. It is supported by Arab Air Carriers Organization. Emirates is the official airline. Aviation Week & Space Technology, Outsourcing2India and Aviation Business are the media sponsors.
Nadeen El Ajou
