Two new airframe maintenance, repair and overhaul facilities in the Middle East and the southern Mediterranean will seek to meet strong demand for lower maintenance costs and greater customer proximity, while increasing the Gulf region's clout in the MRO business.

One will see Swiss-based SR Technics--since April controlled by UAE investment company Mubadala--open a narrowbody maintenance, repair and overhaul facility in Malta to provide base and heavy maintenance for 2,000 narrowbody aircraft operating in Europe, North Africa and the Middle East. The four-bay facility, to open in early 2012, is part of an SR Technics plan to redeploy airframe and other labor-intensive activities to low-cost areas and to increase proximity to the customer base.

The cost, which was not divulged, will be shared by SR Technics, Mubadala and Maltese government partners, said Bernd Kessler, CEO of SR Technics.

The launch customer will be EasyJet, which will shift base load IL-checks for virtually its entire narrowbody fleet of 181 aircraft to Malta as part of a $1.6 billion, 11-year deal announced at the Dubai Airshow. The new agreement, which will include light E-checks, component repair and overhaul, engineering and logistics services to be provided by centers in SR Technics existing European network, will require SR Technics to meet certain performance targets aimed at helping EasyJet improve its bottom line.

The key objective of the risk-sharing partnership, said EasyJet Chief Operating Officeer Cor Vrieswijk, is to improve MRO efficiency by at least 17% over the life of the agreement.

EasyJet Deal

The initial focus will be on EasyJet's A320 family fleet, which SR Technics has already been serving since 2005 under an existing arrangement. The low-cost carrier currently operates 157 aircraft but plans to be flying 207 units by 2012. Work is to start on A319s in the third quarter of 2010 using an existing twin-bay hangar. EasyJet Boeing 737 aircraft will join the flow once the new facility is ready. By 2014, SR Technics expects to employ 350 people in Malta, and to expand to six bays.

For the time being, Kessler says, widebody and high-value component MRO work will continue to be done at SR Technics' main plant in Zurich, but the company ultimately plans a network of delocalized low-cost MRO facilities, along the lines of those established by rival Lufthansa Technik. The network will be developed in step with Abu Dhabi Aircraft Technologies, also owned by Mubadala, which will become a second center of excellence for engine and component repair and overhaul.

In further evidence of SR Technics' strong ties to the Middle East, the company yesterday landed a $250 million, 10-year component deal with Etihad Airways.

CEO Bernd Kessler said his company aims to coordinate its marketing strategy with its affiliates in the Middle East as part of its international development efforts. Of the Etihad agreement, Kessler said it is "further proof of the successful repositioning of our company." Earlier this year, SR Technics closed its Dublin facility, among other moves to downsize.