Plane and simple
Aircraft manufacturer Airbus is hoping to boost the global distribution of its spare parts with a state-of-the-art warehousing facility in Dubai Airport Free Zone.
When the sun comes up on Saturday 2nd August, the gargantuan Airbus A380 will have completed the first of many voyages from Dubai to New York, marking a new phase in the Middle East's aviation industry.
But if anything goes wrong with the 300 miles of wiring in the double-decker 'superjumbo', Emirates will not have to twiddle its thumbs while parts arrive via sea freight from Hamburg. Instead, Airbus has set up a new material and logistics centre in Dubai Airport Free Zone to speedily convey spare parts to local customers.
"Basically we opened this facility in order to have greater proximity to our customers," says Joerg Helmerichs, director for material, logistics and supplies at Airbus Middle East. "It will also enable us to reduce transportation time for the huge A380 spare sub-assemblies.
Before, these parts would have been delivered from Hamburg, Frankfurt and occasionally also from Singapore - on exception also from Washington. It depends where the parts are available. Now it's a lot faster and more reasonable in terms of transportation costs; consequently our aircraft operating costs are optimised. The reaction time due to the proximity is much better and will improve our clients' aircraft utilisation."
He added that although delivery to clients in the Middle East will be from the logistics base in Dubai, orders will still be processed centrally through the head office in Hamburg.
On 28th July, Emirates will receive the first A380, which will begin scheduled flights just four days later on 1st August. However, it is not the only firm to order the jet - other regional companies with outstanding orders include Etihad Airways and Qatar Airways.
The aviation business in the Middle East is a booming industry - over the next 20 years, passenger travel is expected to rise by 6%, with cargo to increase by 5%, according to Airbus - and the new facility has already attracted interest from local operators.
"Before we opened two weeks ago we had already received orders from regional customers," Helmerichs says.
Airbus is now delivering items to its Gulf customers, especially to Qatar Airways, Etihad, Emirates and Air Arabia.
"Regional customers are using us more and more, enabling our brand to be recognised," explains Helmerichs confidently.
"They certainly know we are here. Our clients have to make some administrative attachments with shipping information in order to ensure a smooth process. But this has been done step by step and the process is getting better and better," he adds.
The A380 is available both in passenger and freighter models. The A380-800, the passenger model, is the largest passenger jet on the market, while the freighter version, the A380-800F, has a listed payload capacity exceeded only by the mammoth Antonov An-225.
The actual construction of the A380 is done in an assembly hall in Toulouse, with the various parts being sourced from around the world.
The process begins in Hamburg where an Airbus roll-on/roll-off (RoRo) ship picks up the front and rear sections of the fuselage before departing for the UK. Here, the massive wings manufactured in Bristol and North Wales are transported by barge to Mostyn docks, where the ship adds them to its cargo.
At the Saint-Nazaire port, in France, the fuselage sections from Hamburg are traded for larger, assembled sections, which the ship then unloads in Bordeaux.
From there, the freighter then collects the belly and tail sections from Cadiz, Spain, before returning to Bordeaux to drop these off. The full quota of A380 parts are then transported by barge to Langon, and then by road to Toulouse.
After assembly, the aircraft are flown to Hamburg, where they are furnished and painted.
This process has required the laying of several new roads and canals have even been dug in order to accommodate the larger/heavier parts.
Airbus has said that it is able to produce four A380s a month with the current supply chain model, but rather than play a role in the construction of the aircraft itself, the Dubai warehouse will mainly stock specific parts of the aircraft required in case of damage.
The facility, which opened at the beginning of June, will, at full capacity, house more than 5000 different parts, with 43,000 in stock at its launch.
"Predominantly we will stock here A380 parts - spare parts which need to be available as soon as possible such as wing-tips and doors," explains Helmerichs.
"These are actually the parts that are often subject to potential damage while the aircraft is being serviced on the ground. Additionally, we will also have the related tools to remove and reinstall those parts, plus we also have located here those parts that we consider to be high-runners - those pieces required most frequently on a yearly basis and which are generated by the demand from our regional clients."
Airbus already has spares centres in Beijing and Ashburn, Washington DC, as well as warehouses in Shanghai, Frankfurt and Singapore.
The plans for the Dubai warehouse were first announced last year, but it was only at the beginning of June that the opening ceremony was held at the site.
Underlining the value of the site to local business, Sheikh Ahmed Bin Saeed Al Maktoum, chairman of Dubai Civil Aviation Authority, was in attendance.
"The facility has a footprint size of 2700m2 and it also has a storage capability of 2700m2," outlines Helmerichs.
"This is because we have multiple levels of stacking. We have one area which is used for block storage of the larger parts and a cantilever area where we put the lighter sections. In another area we have the shuffle racking area, where we have the three layer shuffle racking system, which is completely manual."
In addition, Airbus also has an avionics-electronics workshop on the first floor of the facility.
"This is being used for the repair of avionic-electronic equipment used on board the A380, especially items like cabin control, the lights, the seats, the music, and temperature control," adds Helmerichs.
"We are also offering 15 offices on a lease for suppliers who may take them if they wish. Up to 10 offices have already been filled, but in principle I have more than 15 interests for 15 offices."
The initial stock in the warehouse is being filled by sea freight, as local demand for replacement parts of the A380 has not yet hit a peak. "Because of the costs, sea freight is a cheaper option," Helmerichs adds.
"We haven't had any delivery obligations and thus have a much more comfortable time schedule for delivery. Airfreight is generally only used when we need replacements provided quickly and we would use sea freight for the bigger parts even during replenishment."
Last year, Airbus signed a three-year contract with Danzas AEI Emirates, which officially began with the opening of the warehouse.
At the contract signing in 2007, Enver Moretti, CEO and chairman of EMA - DHL Global Forwarding, speaking on behalf of Danzas, said that the company was proud to be embarking on a "long-term commercial relationship" with Airbus.
The contract meant that the 3PL firm is now handling all local logistics for Airbus, including maintaining the warehouse. "They are actually running the show," Helmerichs quips.
"We made a request for a quote last year so other logistics firms could compete. But we finally opted for Danzas as they offered us the best package for a reasonable price. We are very happy."
Does the size of the A380 parts pose any unique challenges to Danzas in delivering them to customers? "Some parts will not fit into a normal undercarriage airfreight plane so we are forced to use an uploading aircraft," says Helmerichs.
"The challenge is to find the right transportation method to the aircraft from the ground. So we depend on special trucking and freighters, which have the ability to raise and carry those parts. We may also use special transportation on those occasions where Danzas is not able to fit the parts, but to my knowledge it has never happened with the A380. But the A380 programme is of course still young."
However, Helmerichs was quick to add that the company uses a range of delivery methods appropriate to the specific customer. "For Emirates and Etihad Airways we deliver by road," he observes.
"It really depends on the part itself. If it is a big item we need to consider if it makes sense to deliver via road transport to Saudi Arabia from here, due to height and weight restrictions on the road. For Qatari clients, we would obviously deliver by airfreight. It is much quicker than other forms of transportation."
Despite being rocked by a series of set-backs which pushed back deliveries, it is believed that Airbus will deliver 12 A380s this year, followed by 21 next year and the full production rate of 45 a year by 2010.
So with the increase in the number of aircraft being sold, will there be a need for the warehouse in Dubai to expand to service local customers?
"For the time being we are happy with our facility," says Helmerichs.
"Our size fits our clients' needs. Of course, we will need to wait to see what the future will bring, but if there is any expansion it will take place in Dubai," he concludes.