Dubai has announced the formation of the Dubai Aerospace Enterprise (DAE), which is to be used as an investment vehicle to channel some US$15 billion into a global aerospace manufacturing and services corporation.
An agreement to establish the company was signed last week 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, expressed his belief that through the building of strategic alliances with leading aerospace companies, DAE will become an integral part of the global aerospace industry "within ten years".
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.
According to the DIFC, 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.
"We are putting down a marker for the future," explained HH Sheikh Ahmed. "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."
The DAE chairman continued: "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."
Initially, DAE will target the US$100 billion global airport development and operations, aircraft leasing and financing, and specialist education and training segments.
DAE is being backed by a number of public and private sector bodies, including: the government of Dubai; Dubai International Capital, Dubai Holding's investment arm; Emaar, a leading property company, Istithmar, a leading investment holding company; the Dubai International Financial Centre (DIFC); Amlak Finance; and the Dubai Airport Free Zone Authority (DAFZA).
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.
"We have a rare opportunity," declared HH Sheikh Ahmed.
"We must seize it and place the UAE at the heart of the global aerospace industry," he concluded.
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