The Sanad Group is adding LEAP MRO capability—the first in the Middle East—and is seeking other partnerships. Mansoor Janahi, deputy CEO of The Sanad Group, discusses these strategic points with Lee Ann Shay during MRO Middle East in Dubai.

How has your business changed in the past year?

One important change we launched, prior to COVID-19, was the formation of the Sanad Group at the last Dubai Airshow. We already are seeing the benefits. The idea of that strategy was to provide more services for our customers. Yes, there was strong MRO capability and strong finance capability, but we wanted to capitalize on this and provide integrated turnkey solutions through a single channel, Sanad. Since we did that, there have been a couple of touch points to show the benefits of coming under one roof. During the heart of the pandemic, we signed a $270 million deal with IAE on the V2500 platform. It’s a testament to our capability and our partnership with Pratt & Whitney. Second, we also did a financing deal with Etihad on three engines—two GEnxs and one Trent XWB. During the pandemic we also continued on our journey of capability development: we maintained our 100^th GEnx engine, an important milestone, and we are proud to say today that we have full overhaul capability on the  GEnx platform. Lastly, we are gearing up for the CFM LEAP capability. Our plans are well underway to establish this capability by the second half of next year. We will be the first and only LEAP service provider in the region.

What revenue projections do you have for the LEAP service?

We are studying that. But consider that the LEAP is one of the most successful engine programs and the fact that we will be first in the region. While we don’t have revenue projection yet for the LEAP, I can share that since 2018 we have seen more than $7 billion of long-term commitments from various OEMs. We have long-term relationships with GE on the GEnx, with Rolls-Royce on the Trent 700 and with IAE on the V2500. So as an independent service provider, we are extremely proud that we work with every major engine OEM and today more than 60% of our revenue is generated outside of the UAE. We have a customer on every continent of the world. 

MRO is a capital intensive business. Do you expect to see more joint ventures form over the next few years to help MROs gain capabilities without excess expenditures?

Many people are saying ‘cash is king.’ But at the same time, there is a lot of cash available in the market. From a Sanad perspective, we will continue to look for partners not just here in the
UAE. We have global ambitions. We have a network of partners that we have established. Our strategy is to have the core technical competence reside in Abu Dhabi and have a web of partners in regions that are growing. One that we have established is Ethiopian Airlines in Africa. We are also looking at Southeast Asia and the Americas. The name of the game is partnerships. Today cash is king, but liquidity is still available. We definitely pride ourselves in terms of our long-term partnerships, whether they be with OEMs or airlines.

Do you see a shift in any of your business, given that narrowbody travel is picking up much faster than widebodies—and widebodies have traditionally dominated in the Middle East?

The beauty of our business is that we have a well diversified product portfolio. It’s a mix of widebodies, mature engines and next-generation engines. I put it into two buckets: we have a mix of mid- to mature-market engines such as the V2500 and the TRENT 700, and then we have the next-gen engine types such as the GEnx and LEAP. There will always be a need for widebodies, because they underpin long-haul air travel. 

So you don’t expect a shift in capabilities?

No, I don’t think so. Yes, narrowbodies will increase in demand, in my opinion, but at the end of the day, international travel needs widebodies. But in the meantime, domestic is where there’s a significant pick up in activity compared to pre-pandemic, so maybe in the short- to medium-term narrowbodies will be strong, but I don’t see a big shift to be prevalent long term.