NAS Holding the key to Saudi aerospace jobs

In many Middle Eastern countries there is one business that creates a springboard for private individuals to develop the indigenous industry.

In Saudi Arabia there is no question that this is the mantle carried by National Air Services (NAS).

Many of the key personnel from the companies that make up Saudi’s burgeoning aerospace industry have cut their teeth in the offices of NAS. But, for the current chief executive of NAS Holding, the group is now about building careers within and not just act as a stepping-stone to opportunities elsewhere.

Sulaiman Al-Hamdan heads the team that has, for the past two years, set about changing the NAS companies into an organisation that can – and will – compete internationally and utilise Saudi Arabian human talent in order to achieve that goal.

“Since November 2008 we have set about turning around NAS. It is an organisation with great potential,” Al-Hamdan said.

The group was established in 1999 when the Netjets-Middle East Program was introduced, but since then it has developed extensively.

There are three main stands within the holding group. The newest – and currently the highest profile – is the low-cost carrier nasair (see story page 60). Then there is the founding private aviation business, which for the past decade has seen NAS continue to operate the Netjets fractional ownership brand in the Middle East alongside its own charter business. Finally there is NAS Tech, the MRO and engineering business that has supported the business aviation activities.

Al-Hamden has put his management in place. “We have the best team I could have dreamed of,” he said. And they have enthusiastically and innovatively begun reducing the losses that have been dragging the group down.

“We have seen our losses cut from SAR900m (US$240m) to SR180m (US$48m) in 2010,” Al-Hamdan said. “We will see nasair in profit in 2011. We have been working with the McKinsey firm to help us develop a road map for our divisions. We have made some tough decisions with the airline and our route network but it is up to the government to change the regulations if they want us to serve throughout the country.”

Al-Hamden continued: “We cannot afford to do business that doesn’t generate money for us. The airline had a bad start because of this. Also, the concept of a low-fare airline is new in the region and the perception was bad. But this is changing. Our top priority is safety and then on-time performance. People now believe we are reliable and because of that we are seeing up to 35 per cent of our passengers using the airline for business travel.”

Everything in the group is up for challenge – and that includes the Netjets partnership.

Although NAS will continue to operate the Netjets business in the region, it will now operate from under the NAS Jet brand with operations centred in Riyadh, rather than Jeddah.

“Netjets has a good name,” said Al-Hamdan. “But my intention is to position the private jet business more to meet local needs and considerations. We have 65 customers and so we will be modifying what we do but maintaining the core element.”

NAS Tech is also seeing investment and growth. Late last year Al Hamdan signed a contract with German MRO giant Lufthansa Technik to develop a partnership to grow NAS Tec’s engineering capabilities over the next ten years.

Under the agreement Lufthansa Technik will provide engine and component maintenance services for the entire NAS fleet while NAS Tech will build up capabilities for line and light base maintenance of narrow-body aircraft, especially for the Airbus A320 family.

“Lufthansa Technik is supporting the process with engineers and technical advisors but once established, the service portfolio of NAS Tech will also be offered to local, third-party, customers,” Al-Hamdan said.

“This agreement is the result of negotiations between the two companies for more than a year and we are proud and happy of this partnership with Lufthansa Technik, admiring the ability of NAS to expand and absorb such advanced technology.”

This move paves the way for investment in both infrastructure and people.

At its home airport, the King Khalid International Airport in Riyadh, NAS is currently investing to establish maintenance facilities, including a hangar and a maintenance workshop. Lufthansa Technik will begin training NAS Tech maintenance staff to get technical expertise based on international license standards.

“We have three clear goals with NAS Tech,” said Al Hamdan. “Firstly it is to provide the best service to our fleet; secondly to look at the market to enable us to provide third-party services to other operators in the region; and thirdly, and importantly, to enhance the knowledge of young Saudis to work on aircraft engineering and maintenance.”

Al-Hamdan said the group would also continue to look at its aircraft needs, both for the commercial airline and for the private jets business.

Currently Netjets has 16 aircraft in operation and 60 additional aircraft on order alongside management and operations contracts for more than 50 government, corporate and private aircraft. The NAS commercial fleet has 12 aircraft with outstanding orders for 37 more to join gradually until 2016.

“If the domestic market changes we could be looking at turboprops to serve parts of the region,” said Al-Hamdan. “And we are all now very positive about the future for NAS.”