The Maintenance, Repair and Overhaul of Aircraft Industry in South Africa 2022

Introduction

South Africa has the most developed aviation maintenance, repair and overhaul industry on the continent. Its position of strength has been undercut by the recent, rapid decline of the two largest aircraft maintenance organisations, South African Airways Technical and Denel Aeronautics. 2019 was a defining year for the local industry as Comair shifted its fleet maintenance contract to Lufthansa Technik. The pandemic affected the aviation maintenance, repair and overhaul industry.

Global trends point to increased barriers to trade for independent aircraft maintenance players as airlines take their maintenance inhouse and original equipment manufacturers of parts, components and systems place increasingly onerous quality-assurance, certification and royalty requirements on independents. While maintenance companies servicing international and regional commercial airlines may struggle in the short- and medium term, there are opportunities for companies that maintain smaller planes and helicopters.

Opportunities

Hub and clustering growth around major maintenance suppliers, well planned, can result in effective positioning of supply chain and complementary capabilities.

Maintenance, repair and overhaul capabilities in Africa are growing, allowing for investment opportunities on the continent. The severe impact of the pandemic, particularly on the African continent, has caused a slowdown in the purchase of new aircraft and the requirement to keep older aircraft airworthy for longer.

Outlook

The industry is the aftermarket partner of the broader aviation sector which has experienced decline in recent years.

The industry has retained some stability, especially companies servicing the smaller business and recreational general aviation market. Factors affecting the outlook of the domestic industry include the future performance of South African Airways Technical and Denel Aeronautics, the recovery of airlines, the growth of CemAir, FlySafair, Airlink and Lift airlines, which all have their own maintenance capabilities and the pace of development of maintenance, repair and overhaul industries in Africa which may eclipse those of South Africa.

Report Coverage

This report focuses on the maintenance, repair and overhaul of aircraft in South Africa and includes information on the state and size of the industry, the major players, corporate actions, key trends and factors influencing the sector.

There are profiles of 25 companies including the major players SAA Technical, Denel and Lufthansa Technik, airlines such as CemAir and Safair and other players such as Transafrica Aircraft Services, Solenta Aviation, Global Aerotech and Airwork Africa.

Strengths

A strong business and recreational aviation industry which can support maintenance SMEs.

Airline AMOs can take on third-party work. Extensive engineering and technical capabilities have existed in the industry for a long period, particularly in Gauteng. Major airlines have their own maintenance capabilities and provide aviation maintenance divisions access to funding and investment. The full range of technical capabilities for maintenance in airframes, avionics, engines and components, for both line and heavy maintenance. Well-developed facilities and infrastructure with more capacity being developed at a number of international airports. Well-positioned to act as the continent’s maintenance hub.

Threats

Continued question marks over the future viability of South African Airways Technical and Denel.

Hub growth does not attract sufficiently large and influential players and is not supported by adequate incentives and support from local governments. Manufacturer and airline control over the maintenance supply chain may raise barriers to entry and limit opportunities especially for third-party, independent and small maintenance service providers. South Africa’s economic environment does not support the restoration of pre-pandemic flying volumes, limiting the growth of the industry. The strong emergence of Ethiopia as an aviation force on the continent, now attracting investment in maintenance, repair and overhaul capabilities.

Weaknesses

A poor working relationship between the authorities and maintenance organisations affect certifications. An industry training system weakened by the decline of South African Airways Technical and Denel. Lack of access to skills and skilled personnel. Limitations in present certifications available in the industry, preventing access to more complex work and larger contracts and causing these activities to be completed overseas. Limited government support.