Airbus deal helps Strata mine $1bn seam of aerospace work

Strata, Mubadala Aerospace's manufacturing subsidiary, has won a new deal that brings its contracted work to more than $1 billion.

The Strata manufacturing plant in Al Ain. Courtesy Strata
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Strata, Mubadala Aerospace's manufacturing unit, has won an Airbus package that means the Al Ain facility has secured work worth more than US$1 billion (Dh3.67bn) in its first 18 months.

The milestone Strata deal is part of Abu Dhabi's ambitions to become a major player in the lucrative aircraft manufacturing and maintenance industry.

Strata, the advanced composite aircraft-structures maker in Al Ain, has won its first work package on the new Airbus A350 XWB, to provide wing components called flap-track fairings.

The deal has been awarded on the back of a tender process by the Belgian company Sabca, through which Strata is to provide its services.

Aerospace manufacture, repair and training is an important plank in Mubadala's plans to diversify Abu Dhabi's economy, and it has ploughed huge investment into the sector over the past few years as it aims to become a global aerospace hub.

The aerospace unit is part of Mubadala Development, a strategic investment company owned by the Abu Dhabi Government.

"This particular contract with Sabca runs over the lifetime of the [Airbus] A350 programme and its value to Strata will exceed $200 million by 2030, taking Strata's contracted work, in the last 18 months alone, to well over $1bn," said Strata, which began its operations in the summer of 2010.

Ross Bradley, the chief executive of Strata, said the contract was indicative that the company had "demonstrated [its] capabilities in delivering cost-effective products of high quality".

Analysts said the growth of such expertise in the aerospace manufacturing and repair sector would help Abu Dhabi tap a highly lucrative global market.

"Supporting the hundreds of airplanes in service and those that are yet to be inducted means that maintenance activities kept within the UAE, means more income and jobs at home rather than having to ship it out elsewhere," said Saj Ahmad, the chief analyst at StrategicAero Research.

"Maintenance, repair and overhaul [MRO] work generates billions of dollars per annum across the globe and Mubadala's foray means they are set up for the long haul. It's also worthwhile noting that MRO work is long term - over the 20-year lifespan of an operational airplane, checks, maintenance, repairs, upgrades can eventually outstrip the cost of initial acquisition, so there's lots of money to be made in this business."

He said Mubadala's growing role in aircraft structure manufacturing also benefited Airbus and Boeing.

"By bringing in new talent such as Mubadala, they spread risk, mitigate against possible fluctuations in demand and it also gives them the opportunity to get better deals with more suppliers through increased competition."

Mubadala Aerospace's other businesses include Abu Dhabi Aircraft Technologies, Advanced Military Maintenance Repair and Overhaul Centre and SR Technics.