Mubadala: Flight - the path to profit

I heard Mubadala's striking deals at the Paris Air show?

You must be talking about the partnerships it announced with Lockheed Martin and Boeing?

So what do the deals entail?

Well, a Memorandum of Understanding (MOU) has been signed with US industrial major Lockheed Martin that will see both companies working together on various aerospace activities and projects in Abu Dhabi and across the MENA region.

And what will this partnership bring to Abu Dhabi?

Basically, the two parties will collaborate to address issues related to the sustainment, maintenance, repair and overhaul, engineering and technical support of military aircraft.

How will both companies join efforts?

Both Mubadala and Lockheed Martin plan to align their activities to attract other strategic partnerships that would provide the best value full-service military aircraft support. It's been said that various military aircraft airframes and engines have already been pinpointed by the two players as part of a joint MRO agreement.

Why is this deal so significant?

You see Mubadala's entry into aerospace investment marks a diversification from its regional focus. So far several Gulf companies have been focused on purchasing large numbers of aircraft but very few have been involved in aerospace investment. Abu Dhabi plans to become an active producer and investor and is expected to start talks with leading international players.

But why invest in the aerospace industry?

The aim is to diversify away from its reliance on oil and gas, thereby developing a more sustainable broad-based economy for the UAE.

Is the other deal part of the same grand plan?

Yes, the MOU signed with Boeing is another partnership that will help grow Abu Dhabi's emerging aerospace strategy.

What will Boeing do for Mubadala?

In accordance with the MOU, a framework for discussion will be put forward. Boeing will offer its strategic guidance to Mubadala on the implementation of its aerospace strategy. It will also pave the way for the identification of potential partnerships and suppliers to become directly involved in the production of advanced aerospace components and raw materials in Abu Dhabi. Things are moving and moving fast in this space.

Anything else?

Cheeky! Boeing is also expected to assist Mubadala on the development of an Abu Dhabi-based aerospace research and development centre. The main point is that these two deals will firmly establish Abu Dhabi's global presence in the aerospace industry.