After huge orders, Airbus and Boeing sign Gulf supply deals
By Tim Hepher and Praveen Menon
DUBAI (Reuters) - Airbus and Boeing agreed to triple purchases of parts and materials from Abu Dhabi in deals worth over $5 billion on Monday, as Gulf states seek a reciprocal boost to their economies from huge orders they have placed with the planemakers.
A shift of emphasis on day two of the Dubai Airshow accelerated the growth in aircraft parts manufacturing in countries where demand is strongest and will spread part of the profits generated by $150 billion of brand-new plane orders.
"We have always had industrial partnerships in countries where we have done business," said Boeing's (BA.N: Quote) Chairman and Chief Executive Jim McNerney.
"It is not just a marketing quid-pro-quo; it benefits us and so reduces our risk to have more partnerships around the world," he told reporters at the Middle East trade gathering.
Confirming a Reuters report, Airbus EAD.PA agreed a new deal with Abu Dhabi's state investment fund Mubadala, whose aerospace unit already builds lightweight parts for Airbus and Boeing.
Separately, Boeing said it had signed a deal with Mubadala for Abu Dhabi to supply as much as $2.5 billion in advanced composites and machine metals to the U.S. planemaker.
The deals will benefit the mainly female workforce of a $250 million plant in the remote oasis town of Al-Ain, which competes with Britain's GKN (GKN.L: Quote) and Spirit Aerosystems (SPR.N: Quote) of the United States to make composite and metal parts.
Competition also from South Korea and Japan is intense but Mubadala Aerospace, owned by Abu Dhabi's sovereign investment fund, aims for a top-three spot in the industry by 2020. Continued...