Airbus plans fresh JVs in Mid-East
19 Jan 2009
European aircraft maker Airbus has announced that it is in discussions with prospective partners in Dubai and elsewhere in the Middle East – such as Libya and Egypt - for setting up more regional joint venture facilities for parts manufacturing and services.
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," he said without giving details about the nature of the projects and partners. "The setting up of more joint ventures means that our goal of internationalisation is a reality and not a gimmick," Fekih added. He expects the deals to be finalised by the end of 2009.
Last July, Abu Dhabi-based Mubadala Aerospace, a division of Mubadala Development Co, signed a supplier agreement with aerospace group EADS, the parent company of Airbus. The partnership 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.
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 cancellations from the regional carriers. "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 planes for Emirates in 2009 was on track. In 2008, Airbus delivered four super-jumbos to Emirates, its largest customer, which has ordered 58 A380s.
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 the total. The plane-maker has a backlog of 665 planes, worth some $110 billion, for Middle Eastern carriers.
Fekhi said the A350 and A380 aircraft had played a major role in the Airbus success in the region. Sales of 237 A350 in the region account for 50 per cent of the Airbus total worldwide, while the order for 73 A380 account for 37 per cent.
Airbus received orders for 239 aircraft in the Middle East and North Africa (Mena) during 2008 at a value of $35 billion, and delivered 273 aircraft in the same period, the company said.
The manufacturer performed above its expectations, and broke its records for global orders and backlog, despite the airline industry hitting sluggish growth since mid-2008. Half of the 700 aircraft in the regional market are manufactured by Airbus.
Fifty-eight aircraft are expected to be delivered in 2009 in the Mena region, including aircraft placed via leasing companies. The forecast of orders for the coming year stands at 100 aircraft. "The airlines in the region have already finished their renewal. The big decisions in the region were made from the major regional airlines and there are only two to three left," Fakih said.
