How did PAL Aerospace first come to base its overseas operations in Abu Dhabi?
PAL Aerospace is a Canadian company whose core competency is special mission aircraft that engage in Intelligence, Surveillance, and Reconnaissance (ISR). In an increasingly important global market, PAL offers turnkey solutions for clients with the ability to do engineering and design, modification and integration, maintenance, integrated logistics support, training, and In-Service Support (ISS). What makes PAL unique, however, is that we can operate our own aircraft, deploying on short notice in various countries and environments around the world. PAL established its presence in Abu Dhabi over a decade ago at a time when GCC countries started to consider the acquisition of their own special mission aircraft. Given PAL's ability to provide aircraft, training and support services, we offered a unique value proposition to governments in the region. Ultimately our decision to partner with Emirati ownership, choose Abu Dhabi as our base of operation in the region, and form PAL Aerospace LLC was influenced by the UAE's tremendous foresight in understanding of the value of ISR services and appreciation for how our services could complement their objectives.
What distinguishes the UAE from neighboring countries as a market for special mission aircraft and ISR?
The UAE is the only country in the region with a mature ISR fleet, with neighboring countries only now seeking to acquire comparable assets and capabilities. So, as a fundamental differentiator, the UAE is much further advanced in this area. We believe, based on our experience in this market and the partnerships we've built here that we are uniquely capable of contributing to the training and planning required to support ISR services as other GCC countries seek to integrate that capacity into their nation and regional defense plans. We also believe, based on the UAE's head start in ISR, that it will remain a regional leader in that capacity for years to come.
What factors drive PAL's decisions regarding aircraft used on ISR missions?
Traditionally, PAL's focus of work has been in maritime surveillance. This specialty has served our partnership with the UAE well given the country's size and location proximate to the Strait of Hormuz and the Red Sea. In the maritime domain, the two key aircraft attributes are the ability to operate “low and slow." Twin turboprop aircraft are both well suited to this type of operation and have the capacity to carry the technology we need to successfully identify threats like terrorists, narcotics traffickers and human smugglers. With that in mind, PAL has developed significant capacity in operating and supporting Bombardier Dash 8s, ATRs, Beachcraft King Airs and Airbus C295s. These are all reliable airframes with a track record of exceeding client expectations for reliability and performance in ISR operations.
What is your assessment of the skill levels of technicians operating in the UAE?
At large, the skill level of technicians in the UAE is quite high, as it needs to be. People look at one of PAL's specially modified Dash 8s and assume that the maintenance is the same as an off-the-shelf aircraft; however, when you board the aircraft, you quickly realize just how substantial the differences are between a missionized aircraft and a commercial airliner. For instance, we do not operate the same fuel system as a regular Dash 8, we have significantly different wiring and electrical requirements – the differentiators are substantial. An ISR asset is not a plane with electronics on board; it is an electronics system that has a set of wings. To give you an idea of the level of technology on board, an ISR asset, including the aircraft and onboard systems, could cost anywhere between USD100-250 million. The airframe accounts for less than 10% of that cost. Operating this level of advanced technology effectively requires world-class talent and we have seen a significant development and maturation of the skill sets we need in the UAE over the last several years. This has come from government leadership, development of training techniques and programs required to properly nurture skills development and, when needed, recruiting specialized capacity from abroad.
Do you see the UAE being able to build a completely localized ISR industry?
The global ISR market is so deeply interconnected, and specialized that it is almost impossible to get the economies of scale needed to localize the industry in any one country. The UAE has developed a substantial fleet of military aircraft, and has successfully localized maintenance, repair and overhaul operations. PAL appreciates and supports this approach. We have chosen to operate as a local company in the UAE market, and we have an Emiratization strategy in place. Our staff is currently composed of around 10% Emirati nationals. We are very proud of this, and we are always looking to increase the numbers. That said, ISR assets are completely unique aircraft, built for a unique set of special mission criteria. So to properly support those operations and make sure we are keeping up with leading-edge technologies in the field, some degree of international participation will always likely be required.
What is the current frontier of innovation in ISR?
There is rapid innovation going on in the ISR market, not necessarily focused on the airframes so much as on the onboard ISR systems. The electro-optical/infrared (EO/IR) camera market, for example, has changed dramatically in the last three years. EO/IR used to be comprised of a single camera and a lens. Now, cameras offer multiple lenses and make use of artificial intelligence. The ability of radar technology to detect ever smaller targets at increasing distances advances every year. Most of the R&D that PAL has undertaken in the UAE been developing here is driven by our clients' needs. For instance, we have always been heavily invested in software development and as a result we have been doing more and more work locally on refining the mission systems software that essential serves as the central nervous system for the aircraft.
Does PAL see any of its services in the Gulf region moving beyond the defense sector?
There has been some interest in the UAE to see PAL apply our work outside the national defense domain, particularly in addressing environmental and security concerns around critical infrastructure, like offshore oil and gas installations. There is an evolving discussion as to whether the responsibility to act as the custodian of this critical infrastructure lies with the companies managing it or the government. In Canada, for example, this stewardship is accomplished through a partnership between government and private industry. PAL owns and operates aircraft under direct contract from the oil and gas industry, but we also have surveillance operations in the same areas under contract with the government. We believe that in time of responsibility for infrastructure monitoring will shift toward industry.
What is the biggest growth segment of the ISR industry in the Gulf region?
Training services are set to be the biggest growth sector in the ISR market in the Gulf region over the next few years. The demand for ISR assets in the GCC is only increasing. As PAL has worked closely with the Government of the UAE in to develop ISR capacity here and have established local operations with demonstrated ability to successfully train and support ISR operators, we are in a strong position to lead the training elements of this future growth. Additionally, Canada is globally renowned for its sensor operator training capabilities. This allows us a unique opportunity to tap into a substantial supply of high-quality, specialized trainers, bringing world-leading techniques and technology to the UAE.
What recommendations do you have for the further development of Abu Dhabi's aerospace and defense sector?
We believe Abu Dhabi would benefit from an increased recognition of the importance of a mature defense and aerospace cluster with a clear export focus. From PAL's perspective, for our company to grow, we need to be able to market our services effectively in the rest of the Eastern Hemisphere, secure in the knowledge that there is a supportive ecosystem to help us do the actual work and bring significant economic and technological benefit back to in Abu Dhabi.