Dubai unveils blueprint for US$15 billion global aerospace investment

The Gulf emirate of Dubai has received government backing for a new investment vehicle to channel US$15 billion into creating a global aerospace manufacturing and services corporation. Dubai Aerospace Enterprise (DAE), the new corporate entity, will become the holding company for six operational subsidiaries involved in manufacturing and services across 14 industry segments.

An agreement to establish the company was signed Sunday by the founders in the presence of His Highness Sheikh Mohammed Bin Rashid Al Maktoum, UAE Vice President and Prime Minister and Ruler of Dubai.

Newly named Chairman of the DAE, HH Sheikh Ahmed bin Saeed Al Maktoum, President, Department of Civil Aviation Dubai and Chairman of the Emirates Group, said, DAE would form strategic alliances with leading aerospace operators as it progressively steps up its bid to become a significant presence in the global industry.

He said, “Within 10 years, DAE will become an integral part of the global aerospace industry and a leading player.”

The initiative has been launched against a background of unprecedented growth in the regional aviation market. The Middle East has become the leading buyer of aircraft internationally and together with Asia will account for three out of every five wide-body aircraft delivered in the next few years, according to a feasibility study conducted by A.T. Kearney, a leading management consultancy.

HH Sheikh Ahmed said, "We are putting down a marker for the future. DAE signals our clear intention to become one of the driving forces of the global economy and reflects confidence in our ability to achieve this.

"We are uniquely able to leverage the region's financial strength and liquidity, to draw on the dynamism of immediate and surrounding markets and capitalise on our ability to form international partnerships at the highest level. These qualities will provide the platform from which DAE will emerge as a leading player in the global aerospace sector.

"From its base in Dubai, DAE will be uniquely positioned to drive the development of the industry forward across all markets.”

Initially, DAE will target the US$100 billion global airport development and operations, aircraft leasing and financing, and specialist aerospace education and training segments. Backed by the government of Dubai and leading Dubai-based companies, Dubai International Capital, Dubai Holding's investment arm, Emaar, Istithmar, Dubai International Financial Centre (DIFC), Amlak Finance and the Dubai Airport Free Zone Authority (DAFZA), DAE will progress through a series of phases to establish an integrated aerospace industry cluster.

The Airport Development and Operations business will focus on 'greenfield' development, extending existing airport infrastructure regionally and internationally, and targeting the rapidly emerging markets of China and India. The Aircraft Leasing and Finance business will capitalise on the rapid growth of the wide-body aircraft fleet - primarily Airbus A380 and A350, Boeing 777 and 787 - in the Middle East and Asia. DAE’s aircraft leasing solutions will leverage funding options available in the Islamic and international finance sectors to provide airlines with increased operational flexibility and leaner asset structures.

The Dubai-located Aerospace University and Research and Development facility will offer degrees and apprenticeships. It will be located at Jebel Ali Airport City, currently under construction and which could well become one of the world’s largest aviation hubs. The Aircraft Maintenance, Repair and Overhaul (MRO) businesses will be developed in parallel and launched by the end of this year to enable DAE to pursue its objective of becoming a major MRO hub for airline operators in the region and internationally.

Component and engine manufacturing and assembly will offer global aerospace companies the opportunity to establish a footprint in the Middle East in close proximity to their regional customers. DAE expects this to develop further and will establish an aircraft final completion facility in Dubai.

The group will also develop a presence in business segments such as Space Services, Aircraft Brokerage, Aviation Media and Events, and Aviation IT Systems. DAE has established the market potential for its offering through a study carried out by DAFZA in tandem with A.T. Kearney. The group's projections and plans are supported by evidence of unprecedented growth in the regional aviation industry. Airlines operating in the Gulf region are expected to nearly double their fleets in the next few years. 

Airline passenger traffic in the Middle East and Asia (especially China) is expected to grow as much as 9% a year for the next 10 years, reaching 1.7 billion passengers by 2015. Annual air freight growth is also expected to grow at more than 6% a year. India and China alone plan more than 145 airport projects over the next 10 years – including greenfield builds, expansions and upgrades. This growth will drive the rapid expansion of DAE.

“DAE will be founded in Dubai and is expected to emerge as one of the largest international players in the aerospace industry,” Sheikh Ahmed said.

Dr. Mohammed Al Zarouni, Dirctor General of Dubai Airport Free Zone Authority has been appointed Managing Director of DAE and Rashid Al Malik has been named the Project Director.

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