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For decades, the Kingdom of Saudi Arabia and MTU Aero Engines have shared a common interest in equipping aircraft with the very latest technologies. Government-owned Saudi Arabian Airlines and the Royal Saudi Air Force operate ultra-modern fleets, while MTU provides high-tech engine components and high-quality maintenance services. Now the German engine manufacturer has stepped up its involvement by taking a stake in Middle East Propulsion Company (MEPC), a provider of military maintenance services.
MTU’s acquisition of a stake in MEPC was announced by MTU CEO Egon Behle at this year’s Paris Air Show: “This is a first important step for us towards building a presence in the Middle East, considering that this is a region of growing importance. With this development in mind, we have decided to acquire a stake in MEPC.” MTU has been building up an impressive reputation in the Middle East over a number of years. Government-owned Saudi Arabian Airlines operates wide-body Boeing jets as well as aircraft from the highly successful Airbus A320 family, all of which have components or modules made by MTU on board. The Desert Kingdom’s airline also places its trust in MTU’s expertise for its maintenance services and has been a customer of MTU Maintenance Hannover for several years. Collaboration between the two business partners has been excellent and close ties have been established, with members of the Saudi royal family as well as the airline’s senior management having already made several visits to the company’s Munich and Hannover locations.
The first Eurofighter Typhoons were ferry flown to Saudi Arabia.
The Desert Kingdom also seeks out the best materials when it comes to its military operations: the backbone of the fleet of fighter jets flown by the Royal Saudi Air Force (RSAF) is formed by Tornado multi-role combat aircraft, which will soon be joined by 72 Eurofighter Typhoon jets, one of the most modern aircraft of its kind. Both these military aircraft boast top-quality European origins, and MTU is involved in their production thanks to its contribution of high-tech components, including compressors and control systems. The newly acquired stake in MEPC has now enabled MTU to expand its maintenance activities in the region.
Middle East Propulsion Company, based in Saudi Arabia’s capital Riyadh, is the only military engine shop in Saudi Arabia, and it works strictly in accordance with the highest standards of certification. The military maintenance specialist has a workforce of 65 and generates annual revenues of around 60 million U.S. dollars. MEPC is a joint venture of Pratt & Whitney’s parent company United Technologies (UTC), Saudi Arabian Airlines and Shomoukh Al Hemman for Communication and Information. MTU now holds a 19 percent share in the company; U.S. company Wamar International has also acquired a stake.
The Royal Saudi Air Force is currently operating a fleet of 84 Tornados.
To date, MEPC has been providing maintenance for the Pratt & Whitney F100 engines powering the Boeing F-15 fighter aircraft operated by the RSAF. But its portfolio is now set to undergo a major boost, with the first new business coming from components of the Tornado’s RB199 engine; 84 copies of the combat jet are currently in operation in Saudi Arabia. The second addition to the portfolio will be components of the Eurofighter Typhoon’s EJ200 engine. The Kingdom’s flying squadrons have ordered 72 of these jets, some of which have already been delivered. Further additions will be the T56, the propulsion system used in the four-engine C-130 Hercules military transport aircraft, and the PT6, which powers helicopters and propellerdriven aircraft in Saudi Arabia.
The planned expansion will lead to changes in both personnel and space requirements. Staffing levels are set to rise significantly over the coming years to deal with the additional workload, and the existing building will be replaced by a new, substantially larger facility. With the foundation stone soon to be laid in the airport industrial zone, the facility is scheduled to be up and running by 2011.
MTU and MEPC employees at work.
Preparations for the new engine programs are currently in full swing in Saudi Arabia and Germany, with MEPC staff receiving intensive RB199 training at MTU and work on the EJ200 scheduled to follow. The first group has already successfully completed its training, most of which was carried out at MTU’s facility at Erding Air Base, where maintenance of the RB199 is carried out. As Michael Schreyögg, Senior Vice President, Defense Programs, explains, one thing was immediately apparent: “Our colleagues from MEPC are superbly trained professionals who demonstrate outstanding technical skills.”
Apart from equipping MEPC staff with the necessary expertise, the German engine experts are also helping the company to set up repair and test procedures on site. MTU’s specialists will also be providing advice on constructing a test rig—an essential element if MEPC is to become the number one choice of maintenance shop not only for the Royal Saudi Air Force, but for the entire Middle East.
MTU expertise for Saudi Arabia
Successful talks:
The European military market no longer offers any major growth potential, at least for the foreseeable future. That is why MTU Aero Engines has decided to explore new opportunities and take up activities in other regions of the world. We discussed the company’s plans and objectives with Michael Schreyögg, Senior Vice President, Defense Programs.
Mr. Schreyögg, in which regions do you see a potential for growth with MTU military products?
I think the Arab world is definitely a key region, and India, too, has a strong demand for combat aircraft. In general, with the engines for the Eurofighter Typhoon and the Tiger helicopter, we hold a very solid presence all over the world in ongoing marketing campaigns.
How do you think the military market will develop?
In the medium term it is clear that transportation capacities are going to be increasingly important, with significant demand for fixed and rotary wing aircraft. We are extremely well positioned in both product categories, with the TP400-D6 for the new Airbus A400M military transport and with the new GE38 helicopter engine being developed by General Electric, in which MTU has secured a stake.
How can MTU gain a foothold in the Middle East market?
There are various ways of accessing this market. One of them is to sell the engine along with the weapon system to the customers in an all-in-one package deal. In this case, MTU shares in the new business through the sale of the components it contributes to the propulsion system. Besides, we can also offer efficient support concepts directly to the end customer. In doing so, we benefit from the excellent reputation we enjoy for our proven repair technologies worldwide. The repairs we have developed over the last few years in collaboration with our partners from the German Armed Forces are really quite unique and in great demand all over the globe. Another possibility is to acquire an interest in local industrial companies. In Saudi Arabia, we have recently taken a stake in MEPC, an engine maintenance company.
What are the key issues to focus on in the Arab region?
Our initial focus is always on the customer. Establishing close contact with our customers, understanding their needs and being able to respond to them “on the spot” obviously makes a local presence essential and secures us an important competitive edge. Our goal is to transform MEPC into the leading provider of military engine MRO throughout the entire region and ultimately to bring our high-tech, our expertise and new jobs to the Arab world.
What are the next steps you will be taking?
Apart from activities in the area of engine maintenance, repair and overhaul, MTU has the capability to offer services also in the field of modern health monitoring systems. For Tornado operators, we developed a state-of-the-art engine control system featuring integrated maintenance management. This system is used by the German Air Force and also in Italy, in both cases with great success. The technology is comparable to that used in the Eurofighter. In collaboration with Diehl Aerospace, Rolls-Royce and BAE Systems, we are working on a concept for the Tornado fleet of the Royal Saudi Air Force that will save the customer money and improve the availability of the weapon system.
