Mubadala aims to make a splash at Farnborough

Abu Dhabi's strategic investment company plans to announce a string of aerospace deals at the international airshow next week.

A repair and service facility of Abu Dhabi Aircraft Technologies, above, one of the two maintenance companies that Mubadala owns.

Mubadala Development is planning to announce a string of aerospace deals at the Farnborough International Airshow in England next week, a top official says. The deals are expected to help Mubadala, a strategic investment company owned by the Abu Dhabi Government, in its ambition of developing an indigenous aerospace industry, including the local manufacture of a business jet by 2018.

"We have a few announcements planned," said Homaid al Shemmari, the executive director of Mubadala Aerospace. The Abu Dhabi company has used summer air shows to announce strategic alliances with global aerospace players such as Airbus and GE, and next week's deals will be "even greater" than those announced in previous years, Mr al Shemmari said. "It is not about the dollar value but the capabilities we are managing to get into our network."

At Farnborough, Mubadala will be highlighting its plans to become one of the top three providers of aircraft maintenance, repair and overhaul (MRO) services worldwide, Mr al Shemmari said. Mubadala owns two maintenance firms - Abu Dhabi Aircraft Technologies and SR Technics, which is based in Zurich. "We want to emphasise our commercial MRO ambitions and also our regional military MRO ambitions," Mr al Shemmari said.

"Some of the things we are going to announce solidifies our ambitions and our capabilities, and what we plan to accomplish." It is estimated that Mubadala, one of several beneficiaries of Abu Dhabi's oil proceeds, has more than US$10 billion (Dh36.72bn) in assets. Aerospace is one of the more active of Mubadala's nine focus sectors, which are being developed to help boost the Abu Dhabi economy. Other sectors include health care, information and communications technology, and property and hospitality.

Its aerospace division includes Sanad Aero Solutions, an aircraft engine and components leasing company, and a composites making company being developed in Al Ain called Strata Manufacturing. Strata has won more than $2bn in work packages to date from Airbus, Italy's Alenia Aeronautica and FACC of Austria. Mubadala Aerospace also owns a 35 per cent stake in the Italian business jet company Piaggio Aero.

Its focus on maintenance comes as analysts predict strong growth in the industry, as well as activity in mergers and acquisitions. According to a report by AlixPartners, the top five players account for only 40 per cent of market share. "The opportunities for consolidation in the MRO sector exist and players in the Middle East and Asia will play a bigger role given the shift in capacity base and demand centres," the report said.

Middle East carriers such as Emirates Airline and Etihad Airways are adding tens of billions of dollars of new long-range aircraft as they seek to shift global air travel over their bases. Bill Lay, a director at the global consultancy PRTM, which has offices in Dubai, said it was critical the region's maintenance capabilities followed suit. "The support system has to grow as the aviation assets grow," Mr Lay said. "If you don't, then you get into trouble."

Mr al Shemmari said discussions dating back to November with Boeing to conclude a wide-ranging strategic agreement were going "extremely well". But he hinted the final agreement, which could include Boeing hiring Mubadala's Strata Manufacturing to make aircraft parts in Al Ain, might not be announced at the air show. "The magnitude of what we are trying to do with Boeing is huge, so we are taking our time," Mr al Shemmari said.

Mubadala has also been negotiating a joint venture with Sikorsky Aerospace Services since February last year to build a huge military MRO centre in the emirate to service the region's fleets of fighter jets, military transport aircraft and helicopters. @Email:[e-mail]