Airbus lining up Dubai as a manufacturing base
29 Jul 2008
European aircraft manufacturer, Airbus is willing to shift some aircraft manufacturing operations to Dubai and is seeking to link up with Dubai Aerospace Enterprise (DAE) for such projects, according to senior company officials.
"Dubai is very much on our map, and we only await DAE to formulate its strategy in this respect, and as soon as they announce it, we will be ready," Tom Enders, Airbus president and chief executive officer, informed the media during the handing over ceremony of the first A380 aircraft to Gulf carrier Emirates in Hamburg yesterday.
Last month, at the Farnborough Air Show, Airbus parent company, EADS, signed an agreement with Abu Dhabi's Mubadala Development to manufacture parts and components. The agreement envisages setting up a $500 million composites plant which would produce carbon fibres for the A380 super jumbo.
Airbus has been desperately looking for ways to increase the competitiveness of its manufacturing operations by cutting costs and offsetting the depreciating value of the US dollar against the euro. This causes additional burden to Airbus, for even as its manufacturing costs are in euros, it sells its aircraft in dollars.
The company is in the process of selling off its plants in the UK, France and Germany and is seeking to shift portions of its manufacturing operations to other low cost manufacturing areas.
"The most important advantage for Dubai in this respect is the currency, which is pegged to the dollar, and this will ensure lower production costs. Hence, Dubai can very much be our next target," John J. Leahy, Airbus Chief Operating Officer (COO) for customers, said.
The alliance with Mubadala was preceded by various announcements, including the establishment of a fibres manufacturing plant, as well agreements for servicing new generations of jet engines.
"DAE is targeting manufacturing, though at this stage we have nothing yet to announce, but soon we will reveal details about the matter," said Shaikh Ahmad Bin Saeed Al Maktoum, president of Dubai Civil Aviation Authority, chairman and chief executive of Emirates Group.
