Etihad Airways Engineering has signed a letter of intent outsourcing all its internal logistics functions to DHL Supply Chain.

Under the agreement, DHL Supply Chain will manage stores, local transport movements and associated supply chain planning at the Etihad Airways Engineering facility at Abu Dhabi International Airport.

“We see this agreement as a win-win opportunity not just for Etihad Airways Engineering and DHL Supply Chain, but also for our customers around the world who will be served more efficiently and cost effectively as an outcome of the partnership,” said Jeff Wilkinson, chief executive officer of Etihad Airways Engineering.

According to DHL, aligned storage capacity planning and inventory policies will be a major element of the supply chain. Efficient pick processes and performance indicators will help to reduce response lead times. DHL will also make several changes to the layout of Etihad’s current warehouse and set up an off-airport warehouse.

“This is a significant business win for DHL in the United Arab Emirates,” said David Christmas, CEO of DHL Supply Chain Middle East, Russia & Turkey. “We have a long-standing relationship with Etihad Airways Engineering, which will continue to maintain our aircraft. Our new partnership will build on and broaden this relationship, synergizing the unique strengths of each partner to maximize efficiency and profitability. The supply chain performance and solution has a major impact on the effectiveness of the MRO function. Our expertise and services will help Etihad Airways Engineering to progress towards its vision and meet its strategic agenda effectively. Transforming the MRO logistics and warehousing solution will help them to remain competitive today and build capability for tomorrow.”