Viewpoint

The Middle East’s JV trend continues at Dubai

While it was noted in yesterday’s Talking Point that the first day of the 2015 Dubai Airshow was a largely subdued affair, a flurry of multi-billion dollar deals by some of the region’s big hitters followed on Monday and Tuesday to bring proceedings to life.

Among the many engine deals, MRO contracts and aftermarket service agreements rubberstamped in the past two days, the Middle East’ penchant for joint ventures (JV) was further underlined by Abu Dhabi state investment fund Mubadala signing a deal with GE Aviation to form a GEnx engine MRO joint venture (JV) to be based in Al Ain.

In an extension of a maintenance partnership signed in 2013, Mubadala will expand its GEnx cooperation with the OEM through its dedicated engine MRO subsidiary, Turbine Services & Solutions (TS&S).

This will lead to the creation of a new MRO facility at the city’s Nibras Al Ain Aerospace Park and puts Mubadala on track to become a major GE supplier by 2020.

The deal also includes the establishment of a GEnx component logistics centre to serve the JV as well as third party GEnx operators in the region.

Given the trend of the JV presence in the region has been anticipated for some time, the Mubadala-GE announcement wasn’t surprising.

With the influx of new aircraft into the region, including the GEnx-powered 787, sure to generate many MRO opportunities, demand for the GEnx worldwide remains strong. Last month, GE rolled out its 1,000 GEnx engine model since 2006.

Engine demand in a rapidly expanding market is also matched by Abu Dhabi’s ambition to further grow itself as a commercial aviation hotbed.

Speaking at the Dubai Airshow on Monday (November 9), Homaid Al Shemmari, CEO of aerospace and engineering services at Mubadala, said the MRO facility provides “an important platform” as Mubadala’s looks to further grow its aerospace capabilities.

“Our longstanding relationship with GE along with our global vision and local expertise will make this new facility a success,” he said. “It is Mubadala’s goal to become a diversified global aerospace supplier through partnerships like this.”

And it wouldn’t be unrealistic to rule out further JV announcements before the show ends later this week.

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