Mubadala Development and Abu Dhabi Aircraft Technologies are planning new agreements with aircraft manufacturers to further Abu Dhabi's rise as a centre for aircraft maintenance
Mubadala Development expands its push into aircraft maintenance
Mubadala Development, an investment arm of the Abu Dhabi Government, and its subsidiary Abu Dhabi Aircraft Technologies (ADAT) are planning another round of agreements with aircraft manufacturers to further Abu Dhabi's rise as a centre for aircraft maintenance. A focus of the next push, which will follow the tie-ups with the engine heavyweights GE Aircraft, Rolls-Royce and Engine Alliance, will be on makers of high-end, specialised components, one of the fastest growing segments of the aircraft maintenance market. These "original equipment manufacturers" (OEMs) are expected to include the makers of landing gear, avionics and auxiliary power units, including Goodrich, Honeywell and Hamilton Sundstrand. "Getting the right type of partnerships with components OEMs remains a core strategy," said Ian Wolfe, the chief commercial officer at ADAT.
The plans come as Mubadala seeks to develop the capital into a centre of aerospace manufacturing and maintenance. It is in talks with manufacturers such as Sikorsky Aerospace Services, Boeing and Lockheed Martin to create an Abu Dhabi military aircraft sustainment centre. It has also signed agreements on the commercial aviation side with GE Aircraft to create a facility to repair the GE90 and GEnx engines that are used on Boeing's 777, 787 and newly upgraded 747 jets.
Agreements with components manufacturers could pave the way for ADAT to take on increasingly specialised repair work through licensing agreements, and staunch the flow of this higher-margin work to Europe. Mubadala's creation in February of another subsidiary, Sanad Aero Solutions, which finances components and engines for airlines, would also help by funnelling repair work on those components to ADAT, Mr Wolfe said.
The plans come as the global market for traditional aircraft repair jobs, such as line and heavy base maintenance, is forecast to grow by 1.5 per cent a year or less for the next decade, according to AeroStrategy, a research and consulting company based in the UK. By contrast, the demand for repair of components is forecast to have compound annual growth of 3.1 per cent until 2019, while engine work is expected to grow by 4 per cent a year.
Component and engine work represents 55 per cent of maintenance spending by Middle East airlines, although the region's airlines often have the work done in Europe. "There is currently only sporadic capability to handle the work in the region," Mr Wolfe said. "The time is right for a full service MRO [maintenance, repair and overhaul] capability here." firstname.lastname@example.org