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DAE targets $7 billion sales within 2 years

DUBAI — Dubai Aerospace Enterprise (DAE), the $15 billion global aerospace company set up last year, said it is on target to achieve a turnover in excess of $7 billion in two years.

Bob Johnson, chief executive of DAE, said he was also hopeful of getting the regulatory clearance for its $1.8 billion acquisition of two American aviation maintenance, repair and overhaul (MRO) companies – Standard Aero Holdings and Landmark Aviation – from the Carlyle Group within 90 to 120 days. DAE has filed for a 90-day review by the Committee of Foreign Investments in the United States (CFIUS). The two American companies will be DAE's second and third acquisitions after it bought Zurich-based SR Technics, an independent provider of MRO services, last year for $400 million. All acquisitions by the company so far have been in the MRO segment.

Johnson, who took over as DAE's CEO in the second half of 2006, said so far the Dubai-based company has invested $500 million.

The price of $1.8 billion for Landmark Aviation of Phoenix and Standard Aero of Winnipeg, Canada, is believed to be $300 million more than originally estimated, according to a filing on the US Securities and Exchange Commission website. More than half of the total, $1.034 billion, is for Standard Aero.

Johnson said DAE, an emerging top-tier player in the global aerospace industry, initially will target the $100 billion global airport development and operations, aircraft leasing and financing, maintenance, repair and overhaul and specialist aerospace education and training segments. "The total addressable target market for aerospace equals $1 trillion," he said.

"DAE will progress through a series of phases to establish an integrated aerospace industry cluster which will eventually see the company responsible for contributing between six to seven per cent to Dubai's economy by 2020," he said in a presentation.

He said DAE will compete on a global basis for acquisition of airport assets and green-field projects while seeking to expand airports beyond the traditional scope into high growth segments of the future.

DAE is made up of six divisions — DAE Capital, DAE Manufacturing, DAE Airports, DAE University, DAE Engineering and DAE Services. "It is forming international partnerships at the highest level of industry with the aim of establishing one of the most innovative and successful businesses in the global aerospace industry inside the next decade," he said while declining to give specific details about several overseas airport projects for which DAE Airports is currently negotiating.

However, according to industry sources, a DAE Airports-led consortium has been invited to take part in airport projects in several countries in Asia and the Middle East. New projects in Asia and emerging markets are set to attract $50 billion investments from major global groups, according to the Centre For Asia Pacific Aviation.

The consortium, offering a one-stop solution for airport needs, comprises DAE Airports and six other top UAE companies. Its partners are real estate-based Emaar, air services supplier DNATA, aviation industry technology firm Mercator, Emirates National Oil Company, Amlak Finance and Dubai Airports Free Zone Authority.

DAE, which seeks to invest $15 billion in 10 years in manufacturing and services in the aviation sector, expects to generate eventually $10 billion global revenues through its six global business subsidiaries and create 29,000 plus direct new jobs, Johnson said.