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Airbus in Talks to Set Up Joint Ventures in Dubai

Habib Fekih, President of Airbus Middle East, said the objective was to develop low-cost efficient parts. “We will set up joint ventures when it suits both partners. Currently, we are in discussions to set up joint ventures in Dubai, Libya and Egypt,” he said without giving any specific details about the nature of the projects and partners.

However, sources close to the plane-maker said the Dubai venture could be a parts manufacturing facility.

Last July, Abu Dhabi-based Mubadala Aerospace, a division of Mubadala Development Company, signed a supplier agreement with the European aerospace group, EADS, the parent company of Airbus. The partnership, which is expected to generate in excess of $1 billion of revenue for Mubadala Aerospace over 10 years, would allow EADS to extend its footprint in the Middle East in terms of suppliers and production capabilities. The plant is scheduled to start operations in 2010, producing composite aerostructures for Airbus and other manufacturers.

“The setting up of more joint ventures means that our goal of internationalisation is a reality and not a gimmick,” Fekih said. He expects the deals to be finalised by the end of 2009.

Airbus currently has an aircraft assembly line in China and fuselage plant in Tunisia. It has also set up training centres in Oman and Qatar.

Fekih said Airbus would be “more than happy” to sell 100 aircraft in 2009 – a significant drop from the 239 sold last year — but would be boosting plane deliveries by more than 100 per cent — from 25 in 2008 to 58 aircraft valued at 8 billion in 2009. The decline, he said, was expected following two years of exceptionally high demand from local carriers.

He said most of the carriers had already placed orders to meet their requirement for the next five to 10 years. Airlines which need new fleets include Kuwait Airways and Sudan Airways.

Fekih said he was not expecting any cancellation of aircraft orders from the regional carriers in the light of the current slump in air travel industry. “We are optimistic about the long-term prospects of the industry. As most of the aircraft on order from the region are scheduled for delivery after 2011, I do not think there would be any rethinking over orders that have been placed already.”

Fekih said the planned delivery of five Airbus A380 for Emirates in 2009 was on track. In 2008, Airbus delivered four super-jumbo to its largest customer Emirates, which has ordered 58 A380.

Airbus delivered a record number of 483 planes worldwide, including 12 A380s for different airlines. While worldwide, it sold 777 planes, in the Middle East its sales surged to 239, accounting for 30 per cent of its total sales. The plane-makers has a backlog of 665 planes, worth some $110 billion, for Middle Eastern carriers.

Fekhi said A 350 and A 380 aircraft had played a major role in Airbus success in the region. Sales of 237 A350 in the region accounts for 50 per cent of Airbus total worldwide while the order for 73 A380 accounted for 37 per cent of the total globally.

· issacjohn@khaleejtimes.com