“The move to the CAV is subject to the approval of a sound business case. We will submit our business case to the board of the Denel group in the first quarter of 2009,” explains Denel Aviation CEO Ismail Dockrat. “We have undertaken a ‘footprint study’ to ascertain what infrastructure we need, and how it should be laid out.
We are consulting with international experts in MRO, to benchmark against the best practice on MRO worldwide. These studies will then be used in our financial modelling. After that, the business case will be developed and go to the board. But we’re quite confident we will meet all the challenges and make a successful move.”
Denel Aviation will have to leave its current premises to free up the land for expansion of the airport.
The company has more than one option.
“But moving to the CAV is the best for us, because the South African Air Force (SAAF) is our main customer,” he highlights. “Being physically closer to our client makes more sense for us and for our client.”
Two key points are that the SAAF has its own MRO facilities at AFB Waterkloof, although on the opposite side of the base to the CAV site, and Denel Aviation and the SAAF have agreed to merge their MRO capabilities, eliminating duplication and reducing costs.
The price tag of the move from OR Tambo to Waterkloof is not yet known – it will be determined by the current technical and financial studies – and, if approved, it will most probably take place between the start of 2011 and the end of 2013.
“Ideally, we would want to move to the CAV in 2011, but we could move as late as 2013,” says Dockrat. “Once the CAV infrastructure is established, the move would probably take us six months to a year, although it could be staggered, moving one element of our business at a time. As much of our current equipment and technology that we can bring across to the CAV, we will. The SAAF’s existing MRO facilities should, we believe, be migrated across the base to the CAV. And we will get new equipment to support the SAAF’s new aircraft.”
The plan is for Denel Aviation and the SAAF to have a long-term relationship, with the State-owned company providing MRO for the Air Force’s new Gripen fighters, Hawk lead-in fighter-trainers, AgustaWestland A109 light utility helicopters, AgustaWestland Super Lynx maritime helicopters, as well as existing aircraft, such as the Denel Oryx medium transport helicopters, Denel Rooivalk attack helicopters, Lockheed C-130 Hercules transport aircraft, and so on.
“We have signed a broad vision statement with the SAAF, and we are now negotiating detailed long-term MRO contracts,” he states.
Denel Aviation currently employs some 1 250 people, of whom about 600 work in Kempton Park, at the OR Tambo facility, with about 250 already working with the SAAF at AFB Waterkloof, and another 400 or so scattered around other SAAF bases.
It is expected that most of the Kempton Park workforce, if not all, will move to the CAV (the new site is directly up the R21 road from Kempton Park).
“The project to move to the CAV makes sense,” affirms Dockrat. “AFB Waterkloof has great infrastructure, and lots of land, but it is underutilised. And coordinating what the SAAF does with what we do is very important. We meet at high level once every month, and we have joint planning teams for each aircraft type. Being right next to a major air base will make things easier for both sides.”