Alsalam Aircraft Company is proof that a marriage of local and foreign know-how can succeed, even in a niche industry
On the perimeter of Riyadh's King Khaled International Airport, a joint venture aviation services Company is gearing up for the next phase of its business strategy.
"We have just had two years of tremendous growth," says Engineer Mohammed Fallatah, president and chief executive of Alsalam Aircraft Company (Alsalam), which has been maintaining and modifying civil and military aircraft in Saudi Arabia since 1988.
Alsalam was formed under the terms of the Offset Programme of the kingdom's defence and civil aviation ministry. The Programme aimed to develop Saudi Arabia's indigenous industries by leveraging foreign expertise and technologies, diversifying the economy and generating jobs.
In Alsalam's case, Boeing Industrial Technology Group - a separate entity of the giant US aircraft maker - took a 55 per cent share in the venture. National airline Saudia took a 25 per cent share, while local firms Saudi Advanced Industries and Al Bilad International Technology and Industry took minority shares.
Nearly quarter of a century on the Company is, for want of a better word, flying. It currently employs more than 3,000 people around the kingdom, about half of them Saudi nationals. Alsalam has, Fallatah insists, invested heavily on expertise to maintain its competitive edge.
"For 2010, Alsalam reached a record $270 million in gross revenue which was above target," he explains.
"Order books are doing well and we are continuing to invest in expertise and technological upgrades to diversify and widen our specialist capabilities," says Fallatah, who took up the position in January 2004.
Fallatah has been busy over the last eight years.
A more commercially-orientated and competitive business model was created, while more than $100 million has been spent over the past four years alone to boost Alsalam's technical capabilities and broaden the range of services it offers.
Today, the VIP aircraft interiors segment is one of the biggest growth areas for the Company, and Alsalam is the only designated service centre for Boeing Business Jets (BBJs) in the Middle East and North Africa (MENA) region.
"Our entry into VIP interiors is doing very well, recording strong business growth," Fallatah explains.
"More than 300 specialists work on VIP interiors out of our total workforce," he adds.
The VIP jet market is one of the strongest-growing aerospace sectors in the Middle East, as the number of high and ultra-high net worth individuals increases. This is especially true in Saudi Arabia, where private jet ownership is soaring.
According to Alsalam, once a VIP interior design is conceived for an aircraft, the concept passes through various design development and technical stages, including 3D imaging systems. Interior designs are executed using the latest CAD (computer aided design) technology through to fabrication and implementation by engineers, technicians and craftsmen in Saudi Arabia.
Alsalam says it also installs state-of-the-art flight decks, in-flight entertainment systems and cabin amenities, obtaining all necessary approvals for interior installation.
It has spent $40 million on its specialist interiors workshops to support its capabilities.
According to Fallatah, the entire process from design concept to completion takes 18 months on average. The Company has a 56,000 square metre maintenance facility at Riyadh's airport which includes three aircraft maintenance hangars that can also accommodate wide bodied jets.
"We can cover customised designs from luxury interiors to specialist installations such as state-of-the-art medical evacuation equipment, wireless systems and conferencing facilities, cutting-edge communication and entertainment systems," says Fallatah.
A graduate of Michigan State University in electrical engineering, Fallatah first joined Saudi Arabian Airlines (Saudia) in 1974 as a trainee engineer. He quickly rose through the ranks, and was appointed the airline's engineering manager. This was followed by promotion to executive manager for line operations, before he became vice president of business development for Alsalam. Fallatah became the Company's interim president in April 2003.
His professional background gave Fallatah an in-depth understanding of aircraft maintenance, and he says he can relate maintenance operations directly to the requirements of the shop floor and the technical systems required for successful operations.
Alsalam operates, he says, an 'open-door' policy, talking to customers technically and discussing with operators precisely their requirements and securing contracts in Saudi Arabia and in the MENA region.
The Company's first customer was Saudia when a Boeing 737 entered the facilities for a D-check - a comprehensive inspection required for commercial jets which occurs every five to six years on average - shortly after Alsalam received certification as a repair station in 1993 from the Saudi Presidency of Civil Aviation (PCA), the predecessor of the General Authority of Civil Aviation (GACA).
"I see tremendous opportunities in the private aviation sector and VIP interiors and selectively look at any aviation business that can add value and also see part of our future growth through strategic partnerships," the chief executive says.
"Alsalam has considerable technical expertise and increasingly our customers understand that we have distinct advantages to serve the region."
Last November, the Company announced a tie-up with Marshall Aerospace - said to be the United Kingdom's leading independent aerospace company - to develop maintenance, repair and overhaul (MRO) capabilities for C-130s for the Royal Saudi Air Force (RSAF).
This followed an SR545 million ($145.3 million) military contract awarded to Alsalam in 2010 to provide C-130 technical support services to the RSAF fleet, with a five-year period of performance from 2011 to 2016.
Under the contract, Alsalam is providing skilled manpower to support and train the RSAF to maintain the fleet inside and outside the kingdom. Alsalam has also provided Programmed Depot Maintenance (PDM), technical support services and cockpit upgrades for the C-130 Fleet.
Alsalam has a long-standing relationship with the RSAF, providing technical support and (PDM) on various platforms for the RSAF including F-15, Tornados, AWACS E-3A and KE3-A F-15s. The Company has also supported the RSAF's helicopter fleet.
Alsalam is currently the only MRO centre in Saudi Arabia certificated by the three major aviation authorities - Saudi Arabia's GACA, the US Federal Aviation Administration and the European Aviation Safety Agency - as a Part 145 Organization, which stipulates standards of the repair station.
With VIP and defence spending on the up, Alsalam can look forward with a growing air of optimism.
© The Gulf 2012
