Economy Middle East speaks to Mansoor Janahi, Group CEO of Sanad, about the challenges in the aviation industry and how the company is leveraging opportunities for future growth. Janahi highlights the important role of the UAE in supporting the sector and encouraging its development.
Alp Sarper: Would you start by telling us what the services offered by Sanad are?
Mansoor Janahi: First of all, Sanad is a wholly owned Mubadala entity. As you can see here, we’re part of the Mubadala group.
We have been in business for 35 years. Our core service areas, we provide aviation services. In particular, our focus is on engine MRO or engine maintenance. We also provide financing and leasing services to the aviation sector. The business of Sanad has been around for over 35 years.
All of our operations are based out of Abu Dhabi, around 450 people strong. We work with all the major engine OEMs. Today, in aviation, the major OEMs are GE Aerospace, Rolls Royce, Pratt &Whitney, and CFMI. I’m very proud to say that we have long-term commitments with all the major engine OEMs.
They have entrusted us with over $8 billion and that’s a testament to the position of Abu Dhabi. The trust that the major OEMs have placed in Sanad where Abu Dhabi today is a major aviation destination and a key part of the global aerospace supply chain.
Alp Sarper: If I were to ask you, what does the future of aerospace supply mean? What are some key opportunities as well as challenges that you’re preparing for?
Mansoor Janahi: If you look at the air show, the Dubai Airshow and its 18th version, I think to me, that is the answer. If you look at the orders that have come, record orders.
If you look at air travel activity, we are already close to 98. 5 percent of pre-COVID flight levels. The Middle East has already surpassed the pre-COVID flight levels. Air travel is expected globally at 3. 6 percent in the Middle East. It is expected to grow at a key growth of six percent.
Aircraft orders from this region are larger, from a wide body perspective than any other region. In a nutshell, growth within aviation is on the agenda in the Middle East. It is global as well. I think aerospace is very exciting at the moment. Of course, it doesn’t come without its challenges being manpower.
We’re seeing there being a challenge around the availability of labor. We have a plan against that. Our plan is very much, across multi-levels. One, we are focusing on creating a sustainable pipeline, through empowering more UAE nationals to participate. Today, we’re over 25 percent. Our target in the next two years is to surpass 30 percent.
Alp Sarper: What are your thoughts on the future of aviation and aerospace? What are some of the challenges and opportunities that you see?
Mansoor Janahi: I think the Dubai Airshow is a great example of the growth that the aviation sector is going to see. Orders that were made in the first few days just show that aviation, in particular in the region, is here to grow.
If you look at air travel activity, it is expected globally to be growing at a Compound Annual Growth Rate (CAGR) of 3. 6 percent. Whereas the region is expected to grow at 6 percent compared to the rest of the globe. If we look at air travel activity and compare it to pre-COVID levels, today we’re at about 98.5 percent. However, the Middle East has already surpassed this target.
I think what we’re seeing is we’re seeing significant growth in aviation and what this translates is it translates to many ancillary opportunities and it translates to opportunities in MRO because ultimately the sustainability of the airline and the aviation sector with having a robust maintenance ecosystem goes hand in hand.
Therefore, we’re looking forward to the growth that is going to happen in the region. We strongly believe this is going to present opportunities for people like Sanad and others as well. We just said it, growth. Are there any challenges? Definitely, there are going to be challenges as well associated with this upcoming growth.
One area of these challenges is going to be the availability of talented and skilled manpower. We’re already seeing a shortage globally, so what we are doing in Sanad is we are actually taking the challenge head-on. We want to focus on empowering Emiratis and increasing the participation of Emiratis within our workforce.
It is important that we have a sustainable workforce. Within our Emiratization program, what we are focusing on is on multi-levels. We are looking at technician programs to basically feed our technical workforce from a direct perspective. We’re also looking at our engineering workforce where we are working with universities to supply us with this pipeline.
Alp Sarper: With regards to engine MRO services, what kind of demand do you have in the region?
Mansoor Janahi: So today, if we talk numbers, within the region or globally, the size of the engine MRO market is 64 billion U. S. dollars and within the region, it is around the 10.6 billion mark. Today, Sanad is the largest independent engine MRO provider in the region. As I mentioned earlier, as airlines are growing, as demand is growing for air travel, there is going to be a subsequent need for this MRO capacity. With the focus today on sustainability, and with the focus on in-country value, the reality is that most of the engines that operate in our region are not being maintained in the region.
They’re contributing to emissions. So the challenge is more of an opportunity where I think, with the growth that we’re seeing in the region and the demand for maintenance capacity, that the focus becomes on creating local content and supporting these engines within the region versus sending them out.
Alp Sarper: You mentioned you’ve been in business for 35 years. In recent years, what have been some of your most impressive milestones?
Mansoor Janahi: I think if I may take it to three, I’ll focus on things that have happened recently. Last week, we had a very important milestone, something that we’re extremely proud of.
We opened a new facility, a 5,000 square meter facility, which brings our total footprint in Abu Dhabi, our Abu Dhabi campus to 30, 000 square meters. Along with it, we invested over AED100 million to bring this infrastructure up. The significance of it is we’re going to be establishing a new capability for an engine that is called the Leap.
The Leap comes in two variants, the 1A, as well as the 1B. The 1A powers the A320 Neo, and the 1B powers the 737 Max. We will have more than 30, 000 units of this engine in the next 10 to 15 years. What makes this sort of moment significant in our history, is that we will be the first facility in the South Asia, Middle East, and North Africa region with this capability.
So that is one. Secondly, again, this happened this year. We’ve been doing business with Rolls Royce since 2012. At an event in October, we were recognized by Rolls Royce as the most improved supplier within the Rolls Royce network. This is across 6, 000 suppliers, across their supply base, whether this is manufacturing or services.
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It’s the first time that a company from the Middle East or a company from the UAE has been recognized for their service excellence. Third, I have to say, ultimately all of this is done through people, so I’m extremely proud of the team that we have, whether it is our expat employees, or whether it is our nationals. We’re really seeing, talent coming up through the ranks.
it’s our duty as an entity that is owned by Mubadala and part of the Abu Dhabi government that we produce talent and we contribute to the diversification of the economy by creating sectors and businesses like Sanad. And the aerospace sector has proven today in Abu Dhabi that it is playing an active role and it’s also playing a role within the economy where it is contributing to the GDP and reducing our dependency on fossil fuels and petrochemicals.
Alp Sarper: Abu Dhabi is your headquarters, that’s where you operate from. But what are your geographical expansion plans?
Mansoor Janahi: One of our strategic objectives is, today we’ve got the industrial capability. We’ve got the OEM relationships. We’ve got the customer network as well. And we believe that around us today around the UAE and around Abu Dhabi, there are opportunities in markets that are growing, in markets that we’re not in, and also in markets that need our service. So we’re targeting regions such as Africa, such as South Asia, such as Eastern Europe, that we want to grow into and to leverage our expertise.
Technically and also from a market perspective to ultimately grow into these markets.
Alp Sarper is Economy Middle East’s editor-at-large.
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