Friday, July 18, 2008

Mubadala Aerospace Joint Venture

Original Article

Abu Dhabi keeps up aviation pressure on Dubai

Abu Dhabi's determination to keep pace with the aerospace ambitions of neighbour Dubai was underlined at Farnborough with a flurry of new projects and joint ventures with Western partners that reinforce the industry's reliance on the oil-rich region's rapidly diversifying economies.

Meanwhile, the first sign that even the Gulf is not immune to the global slowdown has come with news that Dubai Aerospace Enterprise is axing plans to establish an aviation academic institute in the emirate, blaming "uncertainty surrounding prevailing market conditions".

Abu Dhabi's government-owned investment arm Mubadala will open the Middle East's first composite aerostructures plant by early 2010 and has signed a supplier agreement with EADS.

As part of the deal, the two companies will establish an engineering centre in Abu Dhabi, with Mubadala eventually supplying aerostructures to Airbus and other manufacturers.

Initially, the factory - at a yet to be disclosed location in the emirate - will employ almost 400 staff and supply spoilers and flap track fairings for Airbus widebodies, moving later into primary structures and components.

Homaid Al Shemmari, director of Mubadala Aerospace, says the company wants to be a "tier one, risk-sharing partner to Airbus, Boeing and other OEMs" within five years, as well as creating a "cluster" for other suppliers to establish facilities in Abu Dhabi.

"We have the right conditions for people to come and establish greenfield projects. We make sure the environment is welcoming. We don't want to control everything ourselves."

At the same time, Rolls-Royce and Mubadala maintenance, repair and overhaul subsidiary Abu Dhabi Aircraft Technologies (formerly Gamco) are launching a joint venture to provide the engine manufacturer's On-Wing Care support to Trent operators in the region.

It joins other R-R centres in London, Hong Kong, Frankfurt, Indianapolis and Singapore. ADAT is in addition increasing its capacity by 35% with a 10,000m2 (107,500ft2) hangar due to open in 2010. Chief executive John Byers says the MRO house wants to achieve $800 million revenues by 2012.

Al Shemmari says further initiatives are likely. One possibility is establishing a factory for a new larger aircraft programme from Italian business aircraft manufacturer Piaggio - in which Mubadala purchased a 35% stake in 2006. "We are in talks...that is somewhere down the line," he says.

Aside from two major fleet deals with Airbus and Boeing for its leasing arm, DAE had a quieter Farnborough. The Dubai-based conglomerate is focusing much of its investment activity outside the Gulf, in recent months developing its aviation IT arm DAE Services and consolidating its acquisition of North American MRO houses Landmark and Standard Aero under the Standard Aero brand.

Plans to establish a DAE University offering diploma courses on engineering to airline management have been "put on hold until further notice". Instead, the division is focusing on its DAE Flight Academy pilot training school.

The company says: "DAE University was established to become a global leader in aviation and aerospace higher education. While that ambition remains firmly held, the demand for an aerospace workforce has shifted amid a deteriorating global economy."

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