Dubai unveils blueprint for US$15 billion investment in global aerospace industryPress Release19 Feb 2006 10:46 am
Dubai Aerospace Enterprise to debut aerospace manufacturing and advanced services in the region
Dubai today announced the formation of Dubai Aerospace Enterprise (DAE), an investment vehicle to channel US$15 billion into creating a global aerospace manufacturing and services corporation. An agreement to establish the company was signed today by the founders in the presence of HH Sheikh Mohammed Bin Rashid Al Maktoum, UAE Vice-President, Prime Minister and Ruler of Dubai.
DAE will become the holding company for six operational subsidiaries involved in manufacturing and services across 14 industry segments. Speaking at the launch event, DAE's Chairman HH Sheikh Ahmed Bin Saeed Al Maktoum, President of Dubai's Department of Civil Aviation and Chairman of Emirates Group, said DAE will form strategic alliances with the leading aerospace companies as it progressively steps up its bid to become a significant presence in the industry. He said: “Within 10 years, DAE will become an integral part of the global aerospace industry.”
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 conducted by A.T. Kearney, the 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.
"It confirms the remarkable capacity of this country to reach out and turn dreams into reality; the readiness of our business leaders to take the initiative and drive plans through to fruition; the value of the infrastructure we have put into place to support our growth and development.
"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 sector player.
"From its base in Dubai, DAE will be uniquely positioned to drive the development of the industry forward across all markets. We have shown how much can be achieved. Emirates is one of the great airlines of the world. With the forthcoming Jebel Ali airport complex we will have one of the aviation world's greatest facility. The Dubai Air Show is one of the feature events of the global aviation calendar. DAE will build on Dubai's impressive track record.
"Here in the UAE we are right at the heart of the most dynamic developments in the industry. This region is in a position to shape the trends that will decide the future of the global industry."
Initially, DAE will target the US$100 billion global airport development and operations, aircraft leasing and financing, and specialist education and training segments. Backed by the government of Dubai and today’s signatories to the agreement - Dubai International Capital, Dubai Holding's investment arm, Emaar, leading property company, Istithmar, leading investment holding company, 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, which is expected to become the world’s largest aviation hub.
The Aircraft Maintenance, Repair and Overhaul (MRO) businesses will be developed in parallel and launched by the end of this year, enabling DAE to pursue its objective to become a major MRO hub for airline operators in the region and internationally.
Components and engines manufacturing and assembly will offer global aerospace players the ability to establish their footprint in the Middle East in close proximity to their regional customers. DAE expects to take this to the next level and 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. Within a decade the industry is expected to emerge as one of Dubai's richest sources of revenue. Some 30,000 new jobs will be created through DAE activities and 8,000 students a year will pass through the new university. Dr. Mohammed Al Zarouni, Director General of the Dubai Airport Free Zone Authority, who has been appointed Managing Director of DAE, said: "DAE will expand gradually and by 2015 the group would have become a major force in the economy.
"I am confident that at the same time it will emerge as a global leader in airport development and operations, achieve its target to be the third largest aircraft leasing company for wide-bodies while providing global leadership in aviation education.
"In the medium term DAE will create and operate one of the largest MRO facilities and establish itself as a significant civil aircraft research, development and manufacturing cluster."
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 per cent a year for the next 10 years, reaching 1.7 billion passengers by 2015. Annual air freight growth is also expected to exceed 6 per cent a year. India and China alone plan more than 145 airport projects in the decade – including greenfield builds, expansions and upgrades. This growth will drive the rapid expansion of DAE.
HH Sheikh Ahmed said: "We have a rare opportunity. We must seize it and place the UAE at the heart of the global aerospace industry."
The members of the Founders’ Committee of Dubai Aerospace Enterprise (DAE) are H.H. Sheikh Ahmed Bin Saeed Al Maktoum, President of Dubai's Department of Civil Aviation and Chairman of Emirates Group, H.E. Mohammed Al Gergawi, UAE Minister of State for Cabinet Affairs and Executive Chairman and CEO of Dubai Holding, H.E. Mohammed Ali Alabbar, Chairman of Emaar and Amlak and Director General of Dubai's Department of Economic Development, Sultan Ahmed Bin Sulayem, Chairman of Istithmar, Khalfan Hareb, Director of the Dubai Ruler's Court, Dr. Mohammed Al Zarouni, Director General of the Dubai Airport Free Zone Authority, Dr. Omar Bin Sulaiman, Director General of the Dubai International Financial Centre (DIFC), and Mohamed Ali Al Hashimi, CEO, Amlak Finance.
Dr. Mohammed Al Zarouni has been appointed Managing Director of DAE and Rashid Al Malik has been named the Project Director of DAE.
Members of a Steering Committee for DAE have also been named. The members include Mohammed Al Zarouni, Sameer Al Ansari, CEO of Dubai International Capital (DIC), Mohamed Ali Al Hashimi, CEO, Amlak Finance, Muneef Tarmoom, CEO, Istithmar and Rashid Al Malik.