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Born in the UAE: Bayanat fortunes mirror Gulf boom – IHS Airport 360

01 September 2015, UAE, IHS Airport 360

Airport systems infrastructure specialist Bayanat has carried out hundreds of projects in Qatar, the UAE, and elsewhere

Georges Hannouche is the doyen of airport systems integration in the United Arab Emirates (UAE). A quintessential Lebanese expatriate success story, he has been based in the Gulf since the early 1980s and has become a leading contributor to the airport development boom that has been so vital to the success of aviation in the region.

As such, Hannouche is one of the architects of Dubai’s success. Over the past 15 years Bayanat Airports’ success has become inextricably entwined with the flourishing Gulf aviation sector.

Set up in 1999, Bayanat Airports Engineering and Supplies is a member of Bayanat Engineering Group, the information and communications technology (ICT) systems company Hannouche founded in 1983. “Bayanat [is] a contractor, system integrator, [and] service and solutions provider for aviation. Our business is focused on airspace in general, including aviation, meteorology, satellites, and security, which are complementary to our business,” Hannouche explained in an exclusive interview withIHS Jane’s .

“Bayanat Airports specialises in airport systems infrastructure, whether special terminal systems, air traffic control [ATC], or airside, including airfield ground lighting [AGL]. In the past 16 years we have done hundreds of projects of all sizes in Qatar, the UAE, and elsewhere.”

Such successful timing of market entry and subsequent growth caught the attention of major global technology players and Bayanat has a history of being a target for international companies. In 2008 the former ICT/Networking Division was taken over by South Africa’s Dimension Data, which in turn was acquired by Nippon Telegraph and Telephone Corporation (NTT) of Japan in 2010. The remaining aviation engineering department was legalised in 2008 as Bayanat Airports Engineering & Supplies LLC. Hannouche said that Japanese investors do not like minority shareholders, so Bayanat has now withdrawn from the arrangement and is once more independent.

“We have had constant growth since 1998,” Hannouche said. “We started small and grew. The best years started in 2008, when we incorporated Bayanat Engineering as an independent company. In spite of the financial crisis, we grew in a conservative manner. We did not go for risky projects. Thus we avoided what many companies faced after the crisis. Many companies were burdened with such large risks that many of them disappeared.”

UAE location

Bayanat has been fortunate to be based in the UAE, which, with eight international airports, has seen airport growth out of all proportion to its size in the past decade. While Dubai World Central (DWC) in Jebel Ali garners much attention before Emirates makes its big transition (expected in 2024-25), efforts are still needed to maximise the potential of Dubai International in Al Garhoud.

Bayanat has partnered with some big names in this regard. “In Dubai, we delivered the Wind Tracer light detection and ranging [lidar] system from Lockheed Martin [in 2013]. Dubai Airport has capacity problems; [It wants] to reduce the distance between aircraft on the airside to gain slots. That project was deployed and we were [the] main contractors,” he says.

Recently at Dubai Airport, Bayanat integrated a foreign object debris (FOD) detection system from Singapore-based Stratech, while at Abu Dhabi Airport it helped to implement a pre-clearance facility for US-bound passengers.

“Dubai and Abu Dhabi airports are advanced because they have deployed the latest technology. Dubai applied the first ground movement radar, in which we participated, in the early 2000s. It was the first surface-movement radar deployed in the Middle East. The associated multilateration system gives you the exact position of the aircraft with very high precision. These airports were able to get to Category III [Normarc ILS from Indra Navia] that enables them to have full security for aircraft landing in almost any conditions.”

Bayanat deployed the ground movement radar and ILS, voice features, and radios for most of the airports in the UAE, including Abu Dhabi, Dubai and Sharjah. It was the main subcontractor for several military runways, supplying navaids, AGL, meteorological systems, and runway visual range (RVR) equipment.

Bayanat also installed technology in all three terminals at Abu Dhabi International. It acted as the main subcontractor under the Habtoor-Murray and Roberts JV on Terminal 3, said Hannouche, and his company has since carried out the maintenance programme for that facility.

Hannouche said Bayanat’s revenues are in the hundreds of millions, rather than billions of dollars. Most projects undertaken are eight-digit millions in value. “Rarely a project in our field would be a nine-digit project. They are relatively small- to medium-sized. A project of USD10 million is a consistent size; a project of USD30 million is quite big and attracts many competitors.”

GCC states

Bayanat has not yet penetrated much of the Gulf Cooperation Council (GCC) market. To date, its activities have been confined to Qatar, Oman, and the UAE, but Bayanat was one of nine prequalified companies for the main contractor role in a new USD100 million terminal at Bahrain International Airport.

Saudi Arabia is another market that Hannouche is studying, and the work to set up an office is under way. “The Saudi market is very promising. Doing business in Saudi Arabia is different from other Gulf countries. It cannot be supported out of the UAE, unlike Qatar and Oman,” he said, adding that the Saudi aviation market is dominated by major contractors which have a substantial presence and have taken most of the big projects in the country. “Employing consultants in Saudi Arabia is not as common as in other Gulf countries. Take the UAE, for example: on most of the prestigious projects, civil contracting, and the rest, they employ high level consultants. In Saudi Arabia it is not the same,” he explained.

“I am very familiar with Saudi Arabia. I set up one of the subsidiaries of my previous group there in 1983. … Riyadh Airport, constructed in the 1980s, was the one of the most interesting and important airports in the region. I still remember when I first went there. I was amazed at the size of the infrastructure [and] at how efficient and beautiful it was.

“When the late King Abdullah took over, he really made fantastic efforts and pushed development to the highest level. The intention is there. I believe that the Saudis realise that aviation is an important sector, that if they compare their airports to other airports in the region, they are lagging behind. And they want to catch up.”

Hannouche identified basic problems, such as the lack of professionals in the Saudi aviation sector. The formalities there, not to mention access, make doing business more difficult than in other countries, and there is the contrast with the UAE’s open skies. In Hannouche’s view, it all means that Saudi Arabia is more restricted.

“What is missing is the lack of an overall global vision of where they want to go. In the UAE, it is: ‘This is our vision. This is where we want to go. This is what we have to do to reach it,’” he argued.

“Currently we have a joint venture [in Saudi Arabia] with a very large group. That activity has not started yet. We are not naming them. It does not make sense to do so. Once it is operational, then we can announce it.”

Bayanat has operations in Morocco, Qatar, and the UAE. “Oman is in the making. We will keep Saudi Arabia on hold to continue our expansion and then prepare to go in; [it] is a very promising market.”

In Qatar, Hannouche said Bayanat has carried out installation works on the old airport in Doha, including navaids. “We have participated as subcontractors for the building of the new tower for the last six years. We have had a team of engineers working with the contractor and are now doing ATC maintenance. We have [also] won a new contract for flight inspection of the runway.”

North Africa is another market where Bayanat expects to do well, and, two years ago, it undertook an investigation of the best location for its operations to allow its business model to flourish.

“We thought initially of South Africa, where we have our [former] partners, but it was a mature market. We had the opportunity to work with some people in Morocco, who encouraged us to start our operations there. It is an open country that needs to develop its aviation. The target [in Africa] is mainly French speaking countries,” he said.

Western airlines

Like many businessmen in the region, Hannouche is quick to dismiss arguments from US airlines that their Gulf challengers are subsidised and anti-competitive. “First of all, their arguments are not consistent. It is just some airlines facing tough competition trying to get the support of the government to stop the growth of the Gulf.”

Second, he said, Europe and the United States should not forget that the Gulf airlines are the biggest clients for their aircraft, in the billions of dollars. This is something they should bear in mind.

“Why don’t these airlines try to be more competitive and offer better services?” Hannouche asked. “The problem is they are caught between high employee overheads, so that every time they want to increase profitability, they cut staff. They are caught in a circle they cannot get out of. I think low-cost carriers [LCCs] offere a new profitable model where services are minimal. That is growing.”

The traditional airline business model of economy and business class is no longer sufficient, he argued. “They are unable to satisfy the clientele. The Gulf is next to a booming region. China and India have developed a very wealthy middle class in the hundreds of millions that wants to discover the world. They want to travel by air. They want airlines that offer good services at a good cost. They find that the Gulf countries offer the best alternative.”

CANSO

Bayanat recently joined the Civil Air Navigation Services Organisation (CANSO) on the premise that membership would help it keep ahead of the competition. “We, as a company, always want to be at least 15 years ahead of anyone,” said Hannouche.

“Our model is different because we are proactive. In the industry there are technology providers, system integrators, and contractors. Bayanat is a combination of all three aspects; it works closely with end-users and authorities to identify their business and operational requirements, and provides solutions to address their needs by bridging the technology providers and engineering. We have solutions for any requirements and work closely with technology providers to make sure the solutions cater to customer demand. So we are in touch with consultants, [and] international companies, and are present at industry events in the region and internationally.”

Sometimes manufacturers do not understand the commercial requirements for operating in the Middle East. “We can help these companies whenever they need a professional partner. We act in all phases. With technology providers, we promote a certain technology; we do a presentation, and work with them to do a competitive bid. When we are awarded a project, we do project management and provide services where required. No other company combines our model,” he said.

Hannouche emphasised the importance of aviation infrastructure to the prestige and economic health of the Middle East. “Airports are the first and last place visitors see the country. The aviation business can bring a good deal of growth to a country.” While the projects in the UAE are grand in scale, each airport is “growing at its own pace and with its own model”.

Gulf leaders realise they are eight hours from two-thirds of the world. With this knowledge, there is a “fantastic opportunity to open skies and develop aviation seriously, with a business environment that is open to the world”.

HANNOUCHE URGES FORMATION OF EUROCONTROL-STYLE ATM ORGANISATION

A single umbrella organisation for the Gulf states would help air traffic management (ATM) keep pace with the rapid expansion of airline fleets and airports in the region, Hannouche said during the Airport Show 2015 in Dubai.

He hailed moves in the UAE to improve co-ordination between regulators and air navigation agencies, but argued that these need to be replicated in the wider region. A “Gulf-wide body equal to Eurocontrol with the involvement of all stakeholders and regulators” is also necessary, he added.

Dubai Air Navigation Services signed a pact with Eurocontrol in early 2015 to spread best practice and knowledge from the Single European Sky ATM Research (SESAR) programme. Hannouche called for more airports in the Middle East to embrace change, for example with Airport Collaborative Decision Making (A-CDM).

 

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