The emirate's bid to become a hub for aerospace research, manufacturing & repair
Abu Dhabi, United Arab Emirates (UAE) has very real ambitions to join Seattle, Washington and Toulouse, France as a world-class hub for aerospace research, manufacturing, repair, and overhaul – and the vision, commitment, and resources to back them up.
Abu Dhabi has made visible strides toward this goal, holding in April the second bi-annual Global Aerospace Summit (GAS 2014) “fueled” by Mubadala Aerospace, a subsidiary of Mubadala Development Company and Abu Dhabi’s flagship aerospace investment firm. GAS 2014 is supported by the highest levels of the UAE government and held under the patronage of Deputy Supreme Commander of the UAE Armed Forces and Abu Dhabi Crown Prince His Highness General Sheikh Mohammed bin Zayed Al Nahyan. The two-day conference promises to bring over 1,000 industry representatives from around the world to Abu Dhabi, including a US Department of Commerce-endorsed trade delegation of American aerospace executives led by the Aerospace Industries Association (AIA) and the US-UAE Business Council, to exchange ideas and forecasts for the future of global aerospace.
GAS 2014 is taking place during a pivotal time for the global commercial aerospace sector, with demand spreading eastward to access rapidly developing markets in the Middle East North Africa (MENA) region and Asia. Accordingly, airlines from some countries in the region are emerging as dynamic players in the international marketplace. For its part, the UAE is cementing its status as a key transit point for many global travelers flying on Emirates through Dubai or on Etihad Airways through Abu Dhabi to destinations around the world.
To cope with the sector’s evolution, many US aerospace companies are increasingly looking abroad to international partners and investors to secure future business that will sustain jobs and support the growth of their commercial aviation and aerospace industries. American companies — both large and small to medium-sized enterprises (SMEs) — are looking for long-term sustainable business and investment opportunities globally; namely toward the Middle East and Asia. Here, demand is growing at a rapid pace and a common thirst for innovation and expansion is supported at the highest levels of government and industry.
An emerging contributor to the rapid globalisation of these industries and a cultivator of sustainable American business abroad in general is the UAE — America’s top export market in the MENA region for the fifth year in a row and a key gateway to the lucrative Asian and African markets. Notably, Abu Dhabi, the largest emirate in the UAE and home to the nation’s capital, has emerged as the catalyst behind the country’s growth in these sectors.
Indeed, commercial aviation and aerospace are key economic verticals highlighted by the UAE’s leadership in the Abu Dhabi 2030 plan - a strategy designed to drive the emirate’s economic diversification away from a dependence on oil over the next two decades -, as well as the Dubai 2020, and UAE 2021 economic plans. According to the Abu Dhabi 2030 plan specifically, Abu Dhabi will match vision with resources as it builds and expands current infrastructure to support in-country airplane manufacturing by 2019.
The emirate also plans to vastly increase capacity at Abu Dhabi International Airport (AUH), with the completion in 2017 of the new Midfield Terminal complex that will accommodate the growth of Etihad Airways and handle an expected 49 million passenger a year.
Moving forward, Abu Dhabi endeavours to boost its status as a nerve center for global aviation, joining Seattle and Toulouse as a leader in component manufacturing, aircraft production, and aviation technological innovation.
While the progress in Abu Dhabi alone is compelling, aerospace sector development in the UAE is truly a federal initiative. Dubai’s plans are already underway to refurbish busy terminals at Dubai International and to expand passenger operations and services at the newly opened Al Maktoum International Airport at Dubai World Central (DWC) – already slated to become the world’s largest airport by capacity. The strategy behind these heavily aerospace-focused infrastructure projects is driven by Dubai’s visionary leadership and is already creating supply chain opportunities for global suppliers and contractors across a multitude of sectors. Each of these projects will also boost Dubai’s already state-of-the-art infrastructure and capacity to host large delegations of visitors traveling to the UAE for the Dubai-hosted World Expo 2020.
In fact, Emirati companies have made and continue to make investments that directly support American jobs spanning the entire commercial aviation sector, from the research and development phase through the supply chain process. For instance, the two national carriers of the UAE, Dubai’s Emirates Airline and Abu Dhabi’s Etihad Airways, boast expanding fleets of Boeing airplanes powered by General Electric engines. Further, both carriers hold record-breaking order ledgers indicating ambitious growth plans and delivery schedules. In fact, the airlines have placed US expansion near the heart of their development plans, operating direct flight routes to a combined 10 US gateways come December 2014. Notably, Emirates, Etihad Airways, and regional carrier, flydubai, combined for the largest order of Boeing aircraft to date signing over $120bn in plane contracts at the November 2013 Dubai Airshow, with an additional $20bn for GE engines.
For its part, Boeing recently awarded Strata Manufacturing, a subsidiary of Mubadala Aerospace, a ten year contract to serve as a tier-one regional supplier of advanced aerostructures for Boeing’s 777 and 787 Dreamliner planes. The contract is a clear testament to the confidence Boeing has in Strata’s ability to deliver quality products and in Abu Dhabi’s potential to develop as a regional, and eventually global aerospace manufacturing, repair, and overhaul (MRO) center. Notably, it was announced in January 2014 that Boeing has teamed with Etihad Airways, Honeywell UOP, and Abu Dhabi-based Masdar Institute of Science and Technology to launch the Sustainable Bioenergy Research Consortium (SBRC), set to provide a forum for global engineers to research the comprehensive viability of biofuel technology. Iowa-based Rockwell Collins is another firm actively working with and training Emirati partners operating the latest commercial, corporate, and military aviation communications technology.
Many countries are working tirelessly to develop internal manufacturing capabilities to take advantage of this opportunity and compete internationally. Accordingly, it is in the interest of American industry to set aside competitive tensions and secure mutually beneficial commercial footholds in Abu Dhabi and Dubai.
As the sector evolves into a truly globalised engine of commerce, airlines from the UAE, the broader Middle East, and Asia continue to place record-breaking aircraft orders to support job creation and training opportunities, accommodate growing populations, fill gaps in international air traffic demand, and expand route networks. Abu Dhabi delivers thought leadership and a growing domestic manufacturing infrastructure in response to this trend with the aim to raise the UAE’s profile as a vital link in the global aerospace supply chain.
Danny Sebright is the President of the US-UAE Business Council and Head of the Middle East Practice at The Cohen Group.