Mubadala forges jet engine alliance with GE

The strategic investment company signs an agreement on maintenance and repair at the Paris Air Show.

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PARIS // Mubadala Development, the investment arm of the Abu Dhabi Government, announced a comprehensive alliance with General Electric Aviation at the Paris Air Show yesterday for jet engine maintenance and repair. Under the deal, workers at Mubadala and its two affiliate companies in the maintenance, repair and overhaul business, Abu Dhabi Aircraft Technologies (ADAT) and SR Technics, which has its headquarters in Zurich, will be trained and certified to undertake heavy maintenance on General Electric's (GE) existing and new civilian and military engines, opening up extra business opportunities for the two firms. The agreement fixes a missing link in Mubadala's plans to develop a world-class hub for aerospace services and manufacturing in the emirate, and builds on an alliance with GE created last year covering finance, clean energy, leadership and training and aerospace. "This new agreement with GE finalises one of the remaining aspects of our strategic partnership," said Homaid al Shemmarri, the associate director of aerospace at Mubadala. Mubadala will become the world's first maintenance, repair and overhaul provider for GE's GEnx engines, which were developed for Boeing's 787 Dreamliner and its 747-8, both of which are expected to enter into commercial service next year. Beginning in 2013, ADAT, which is based at Abu Dhabi International Airport, will become a network provider for the GEnx engines for the Middle East and North Africa region, GE said. Workers at SR Technics, which is 70 per cent owned by Mubadala, will receive the same training and certification on GE engines as workers at ADAT. Mubadala's two affiliates have strong capabilities in the maintenance and repair of commercial airframes as well as components, which include landing gear and other aircraft fittings. However, its capabilities in the engine maintenance and repair sector are more modest, Mr al Shemmarri said. "The GE deal hits the mark for us there," he said. David Joyce, the chief executive of GE Aviation, said the deal would help his company improve the service it provided to airline customers in the region including Etihad Airways, which this week purchased engines for 35 Boeing 787s and 10 Boeing 777s, in addition to signing a maintenance contract, in a deal worth a collective US$3.9 billion (Dh14.32bn). "After-the-sale support is one of the biggest strategic questions as an engine maker," Mr Joyce said. "Guys like Mubadala, which has an absolute passion for aerospace, are perfect partners for us in a global sense." Engines covered under the agreement include the F110 family of jet engines for the F-16 fighter plane, whose customers include the UAE Air Force. ADAT and SR Technics will also be given instructions and certification for engines produced by CFM, a joint venture between GE and the French engine maker Snecma. Mubadala is also an investor in GE, having amassed 65.8 million shares in the company as of March, a 0.62 per cent stake, with ambitions to become a top 10 shareholder in the engine manufacturer. The two companies are developing an $8bn commercial finance company together, as well as co-operating in a joint vocational project, the Abu Dhabi Leadership and Development Centre. While most of the training GE provides will be on-the-job, Mr al Shemarri expressed the hope that an indirect benefit of the new developments would be to encourage more UAE nationals to take up careers in science and engineering. The development of the Emirati workforce is a cornerstone of Mubadala's philosophy. "We're hoping that with this announcement that we can grab the attention of the young generation so they can see there are high-value career opportunities within the aerospace industry," Mr al Shemmarri told reporters yesterday. Currently, there are roughly 400 UAE nationals graduating each year in the science and engineering fields, he said. Mubadala's partnership with GE is the latest in a series of agreements and alliances the Emirati organisation has signed with the world's largest aerospace and defence firms, including Rolls-Royce, Airbus, Northrop Grumman and Finmeccanica, as part of its plan to transfer technology and know-how to Abu Dhabi.