Ten years ago, Saudi Arabia was a captive aviation market—dependent on foreign MROs, with talent migrating to Dubai, Amman, or Singapore. Today, the Kingdom is a contender.
A focus on aerospace and defense is an integral element of Saudi Arabia’s ‘diversify to grow’ strategy. Amongst other high profile developments, it will reimagine aviation MRO as an instrument of statecraft, leveraging sovereign capital, supply chain reshoring, and geographic primacy to redraw a regional maintenance map projected to grow from $16.2B to $20.6B (2025–2035).
Aviation Sovereignty
Saudi Arabia’s MRO push is often reduced to industrial ambition. It would be more accurate to view it as an assertion of aviation sovereignty.
- Captive Demand Generation
The Public Investment Fund’s (PIF) backing of new fleets guarantees long-term MRO flow. Riyadh Air and Saudia together represent over 620 aircraft. The $1.2B Jeddah MRO Village, anchored by Saudia Technic, ensures that work stays domestic. - Regulatory Engineering as Leverage
The Local Content and Government Procurement Authority (LCGPA) requires a significant proportion of Saudi content in public procurement. This drove SAR 86.91B into GDP in 2023 alone raising local contribution to 43% during 2023. More broadly, localization in the the non-oil sector which now contributes to 50% of GDP, has reached 56.8%. - Infrastructure as Strategic Chokepoint
The Global Supply Chain Resilience Initiative (GSCRI) launched in 2022 aims to attract significant investments in logistics with SR10 billion in incentives for investors. Its contribution to GDP is expected to rise from 6% in 2023 to 10% by 2030, an increase of SR20.1 billion. The expansion of logistics zones is an important element of this strategy: the Kingdom plans to increase the number of zones from 22 to 59, including 18 that will be strategically located near ports. These investments in infrastructure will attract global investment, boost supply chain efficiencies and strengthen the Saudi logistics market – ultimately eating into the UAE’s 45% share of the regional MRO market.
The pandemic exposed fragilities—from titanium bottlenecks in China to skilled labor attrition in Europe. In response, the Middle East, and especially Saudi Arabia, is reengineering. It is prioritising digital transformation, embracing automation, digitalisation, incorporating innovative technologies such as blockchain and IoT to strengthen supply chains, cuts costs, and improve operational efficiency. It is investing in infrastructure, sustainable ecosystems centred around business, education and health. It is investing in talent.
Regional Moves
Saudi Arabia’s MRO industry is moving swiftly towards its Vision 2030 goal of becoming a regional MRO hub: $100 billion worth of investments in aviation infrastructure span new airports, new airlines and expansive engineering services. The PIF backed MRO Village near King Abdulaziz International Airport in Jeddah is an impressive case in point. Designed to serve both domestic and international markets, once operational this flagship facility could position Saudi Arabia as a global MRO hub.
The Kingdom is an important emerging player in a rich field of contenders.
The UAE is a well-established leader in the Middle Eastern MRO market accounting for just under half of regional MRO demand (45%). Dubai and Abu Dhabi, home to Dubai Aerospace Enterprise Engineering, Emirates Engineering and Etihad Engineering, have seen major investments in MRO infrastructure, including Emirates’ $950 million state-of-the-art facility at Dubai World Central. Meanwhile Etihad Engineering is investing aggressively in talent development by expanding its training facilities in Abu Dhabi International Airport to train over 18,000 technicians every year.
This tiny country accounts for 60% of all wide-body aircraft maintenance in the region delivering MRO growth of 12% between 2020 to 2023. Along with its strategic location, government investments in both infrastructure and cutting-edge technologies such as predictive maintenance, digital twins and a host of green initiatives have contributed to its booming success.
Meanwhile, Joramco too is ramping up investments in MRO services and has recently announced plans to expand its operations via a strategic partnership with Airport International Group, which is delivering the rehabilitation, expansion and operation of Queen Alia International Airport.
Industry Headwinds
Challenges, albeit not in surmountable, remain.
The biggest is the shortage of trained, experienced technicians. The global aviation industry is looking at a gap of around half a million within the next decade which has knock-on implications across the supply-chain. The Middle East’s MRO players are working aggressively to build their own pipeline of talent and pool of local expertise with a combination of long-term training and career programmes and attractive packages. That includes Saudi Arabia.
Saudia Technic’s is planning a massive training academy at the MRO Village in Jeddah which will provide training capacity, funding, and guaranteed jobs for around 1,100 graduates every year. It is being supported by Lufthansa Technik.
Joramco has put in place a forward-looking employee engagement scheme. Implemented in 2023, it builds on “modern concepts of how you build up your entire package and what that package is worth as a total.” With some of the lowest attrition rates in the industry, the scheme holds promise.
Etihad Engineering in the UAE is planning apprenticeships for next-generation expats and runs development programmes for both Emirati talent and international aviation graduates with an emphasis on incentives to attract and retain young talent. The company’s long-term plan is to develop ‘a three-four year course leading to a City and Guilds-type qualification and guaranteed employment with Etihad Engineering.’
Looking ahead, booming demand for private aviation and the promising (and promised) arrival of air taxis is set to make the skies over the Middle East even more crowded. But the exponential growth of these sectors will increase pressure on the MRO industry for parts, repairs and services, rising demand for technicians and engineers and intensifying competition will mean better pay packets for employees but pressure on margins.
And Tailwinds
The search for immediate solutions to relieve the pressure on MROs, OEMs and airlines is encouraging policymakers, governments and the aviation industry to explore novel solutions: alliances and partnerships. To keep more work in the region, players across disparate industry segments are looking for ways to partner with and leverage each other’s capabilities. There are also opportunities to develop green, sustainable services in the aircraft dismantling and recycling space especially given its environmental impact.
Zooming out, there is renewed emphasis on accelerating the digitalization of maintenance and the integration of AI-led technologies which will dramatically reduce maintenance costs by for instance delivering a shift from unscheduled maintenance to scheduled maintenance and enable airlines to implement fleet health monitoring programmes which could deliver up to 15% efficiencies.
There is also a determined effort to encourage women to enter the field of aviation especially technical and engineering services.
Looking further ahead, the booming private aviation sector and the coming inflection point for growth in the nascent Urban Air Mobility or more familiarly, Air-Taxis segment (currently led by the UAE) is one to keep an eye on.
The Middle East is determined to move the aviation capital of the world from Wichita, Kansas to the GCC. That vision is shifting ever closer from ambition to reality.
KAMS Global bring extensive experience building alliances and partnerships, with a strong MRO industry network. Find out more about our services.
