Dubai: Mubadala, the Abu Dhabi government-owned investment vehicle, could launch its new engine subsidiary as early as the third quarter of this year, according to a top executive at the company.
“We are working on the registration. It should be [done] in the next few months,” said Homaid Al Shemmari, Chief Executive Officer of Mubadala Aerospace and Engineering.
Mubadala is launching the new company as part of last week’s deal where it sold its aircraft maintenance, repair and overhaul (MRO) subsidiary, Abu Dhabi Aircraft Technologies (Adat), to fellow Abu Dhabi government owned company Etihad Airways.
Etihad is acquiring maintenance and engineering teams, hangars, component workshops, and paint facilities, according to the two companies, while Mubadala is hanging on to the engine MRO capabilities.
Al Shemmari, who was speaking to reporters at the Gulf Airport Leaders Forum in Dubai on Monday, declined to comment on the value of the deal.
Mubadala has existing engine capabilities including through its subsidiary Turbine Services & Solutions (TS&S), an MRO facility for gas turbines and Rolls-Royce engines.
“We are just carving out that and creating an entity. We are going to continue to do this until we see its financial feasibility to build the [General Electric] GEnx and the [Rolls-Royce] XWB engines which should be 2017, 2018, 2019 time frame, depending on the volumes,” Al Shemmari said.
Mubadala signed deals with GE Aviation and Rolls-Royce at last year’s Dubai Airshow to establish GEnx and XWB MRO centres in Al Ain and also a combined commitment of $1 billion from the two engine-makers for engine parts production.
Al Shemmari said that details will not be released until at least the end of the year.
“We are negotiating with them now on the actual works we will be doing — the actual delivery on the work packages, what is the part of the engines we are going to manufacture, when we are going to establish the MRO, what kind of repair capabilities,” he said.
Speaking on a panel earlier, he said, Mubadala plans to create the biggest two engine shops outside OEMs (original equipment manufacturers) for the XWB and for the GEnx.
Strata
Negotiations between Mubadala Aerospace, and Airbus and Boeing are continuing in an effort to iron out the details of contracts signed at last year’s Dubai Airshow.
Al Shemmari said he is hopeful of announcing the second stage of Strata, the subsidiary responsible for manufacturing aircraft parts in Al Ain, in the fourth quarter of this year. Mubadala wants to manufacture primary wing and tail parts of “the next big aircraft sold by” Boeing and Airbus, according to Al Shemmari.
Strata’s current contract book with original equipment manufacturers (OEMs) is estimated at $7.5 billion but is not yet profitable despite the Dh220 million in revenues last year.
Al Shemmari said that, Strata should “break even by the end of 2015”.
He added that Mubadala is investing Dh500 million on infrastructure at Nibras, its aerospace park in Al Ain. “I want to make the city of Al Ain the centre of the aerospace industry,” he said.
