Mubadala to highlight future plans at Farnborough

Homaid Al Shemmari, Executive Director of Mubadala Aerospace recently told The National (Abu Dhabi), that the announcements are expected to help further Mubadala’s stated ambitions of developing an aerospace industry in the emirate, including the local manufacture of a business jet (by 2018), as part of Abu Dhabi’s economic diversification campaign.

He said: “We have a few announcements planned.”

In recent years, the Abu Dhabi firm has used the summer air shows to announce strategic alliances with global aerospace players such as Airbus and General Electric, and Mr. Al Shemmari said the significance of this summer’s announcements will be “even greater” than before. He told The National : “It is not about the dollar value, but the capabilities we are managing to get into our network.”

A major focus for the firm at Farnborough will be highlighting its plans to become one of the top three providers of aircraft maintenance, repair and overhaul (MRO) services worldwide. Mubadala owns two maintenance firms, Abu Dhabi Aircraft Technologies and the Zurich-based SR Technics. He said: “We want to emphasise our commercial MRO ambitions and also our regional military MRO ambitions,” he said. “Some of the things we are going to announce really solidify our ambitions and our capabilities, and what we plan to accomplish.”

  
Also, in an interview with Reuters yesterday, Mr. Al Shemmari said Mubadala Aerospace will start making Airbus parts at its new facility by fourth-quarter, sees a deal with Sikorsky imminent, and expects to conclude up to five financing deals this year.

Mubadala Aerospace is set for handover of the first phase of Strata, a composites aerostructures manufacturing facility, next month. He told Reuters: "We are on target by the beginning of the fourth-quarter to produce the first article to be delivered to Airbus." 

The parts will be flap-track fairings for A330s and A340s.

Mubadala had set aside an investment of $500 million until 2015 for the three phases of Strata, which will start by manufacturing components such as spoilers and flap-track fairings and eventually develop primary aircraft structures.

Abu Dhabi aspires to build itself into a regional aerospace hub, while neighbouring Dubai, the Middle East trade and tourism capital, aims to become an aviation and logistics centre, building what is planned to be the world's largest airport. According to Mr. al Shemmari, Mubadala has so far signed work packages in the range of $2 billion and is in talks for additional deals, aiming to reach a target of $5 billion by 2020.

Strata's first phase covers contracts with Airbus, Alenia Aeronautica, part of Finmeccanica, and FACC, he said.

In November, Mubadala and Boeing inked a deal to co-operate in activities including composite manufacturing, engineering, R&D, training and maintenance.

He also indicated that phase two of Strata will include work for Boeing, after agreements on work packages materialise, but did not give a timeframe for the start of the second phase.

Military Services

A joint venture deal between Mubadala and Sikorsky, a unit of United Technologies Corp, is close to completion and will pave the way for setting up a military maintenance, repair and overhaul (MRO) capability in the emirate. Mr. Al Shemmari told Reuters: "The deal is almost closed so hopefully very soon we can announce the creation of the joint venture and the starting of the building of that capability," adding that legal documents were being finalised.

Al Shemmari said Mubadala is servicing the United Arab Emirates' armed forces, but added: "The business case is so lucrative that we could be going after some of the NATO platforms in the region in Iraq and Afghanistan."

He said eventually, the aim is to service military aircraft including Chinook, Blackhawk, Apache, and F-16: "I think it will be a much more logical solution to come to Abu Dhabi from Iraq or Afghanistan or wherever in the Middle East and North Africa area instead of sending things back to the US or even to Europe."

The Middle East is home to a fast-growing aviation industry that is defying the global slowdown but its MRO sector has some catching up to do and so should grow from $2.1 billion at present to at least $4.4 billion by 2019, a recent study showed.

Upcoming Deals

Through its aerospace financing firm Sanad, Mubadala is eyeing deals to provide financing and maintenance.

Al Shemmari said: "We are working on multiple deals and hoping we will close four or five of them before the end of this year."

Sanad had signed a $100 million deal with Germany's Air Berlin for 12 spare engines and engine maintenance on Feb. 3.

Talks with potential partners for Strata are also underway.

He said: "There are three, four different entities we are working with at the moment," adding that he hoped some would be finalised "very soon" while others would be closer to year's end.

He declined to be more specific.

Mubadala owns a 70% stake in aircraft maintenance company SR Technics.