DAE is off tarmac and flying at the Dubai Airshow 2007.
DAE is off tarmac and flying at Dubai Airshow.
I heard that DAE is buying hundreds of planes. Why don't I know DAE?
Dubai Aerospace Enterprise (DAE) was only established in February 2006, and really hasn't been making too much noise. It started off with a capital base of US$1bn, but is billed as a US$15bn company. Dubai has put aside some US$82bn for investment in the aviation and aerospace industry and along with Emirates Airline, DAE is a major beneficiary of the investment and a vehicle to realise the goal of becoming a transport hub.
So will I be flying DAE soon? If so, do they have flat beds in economy?
No. And nice try. DAE will be involved in every aspect of commercial aerospace and airport management short of running an airline. The goal is to be active, and eventually a leader in maintenance, repair and overhaul for commercial aviation, and a contender for the top spot among the world's airline leasing companies. The company has already established a university to train pilots, and will develop structures and aircraft components. DAE also aspires to operate and develop airports in the Middle East and Asia. Oh, and it definitely will not manufacture its own aircraft - at least not yet.
What about the money? What are they buying at the Dubai Airshow?
The better question is to ask: what are they not buying? Last week, DAE purchased 100 planes from Boeing worth US$13.7bn. But that didn't satisfy the managers' appetite. The company did not want to hurt anyone's feelings, so it put itself down for 100 aircraft from Airbus, Boeing's rival, a deal worth US$13.5bn. My guess is that DAE felt that other companies were feeling a little jealous; therefore it signed another US$1.5bn in deals with GE Aviation and Emirates to acquire 28 planes immediately to begin its commercial aircraft leasing business. Emirates also placed a US$31bn order with Airbus - Dubai definitely went on a historic shopping spree.
I'm flabbergasted! DAE must be pleased.
They should celebrate the wins, but management is still a little unnerved after it had to abandon its plans to take over its first airport, the Auckland International Airport in New Zealand this past September.
Politics played a role in their decisions because the Kiwis were a little apprehensive of the Dubai factor. DAE is definitely looking at other airports to acquire.
Everybody has setbacks. Where will DAE go now?
There are a few plays it has to consider. Raising funds for more deals must be on managements' minds at some point, but cash is not much of a problem in the region.
The stated plans are to make Dubai a global hub that will contribute significantly to the aerospace industry. With the projections that revenue will increase tenfold over the next four or five years, and with last week's massive order, the industry has already been transformed and DAE has become a giant.