Monday, March 19, 2007

Dubai Airlines

Dubai, prospering from near-record oil prices, plans to invest $20 billion to create a company that will lease planes, develop airports and make aircraft parts to tap into growing demand for air travel in the Middle East and Asia. The family ruled emirate, which owns the largest Arab airline, may buy as many as 50 wide-body aircraft from Boeing and Airbus in the next four years, said Rashid Al-Malik, project director for the planned company, which will be called Dubai Aerospace. "It's not surprising Dubai is moving into these activities because the whole focus of the aerospace industry has shifted eastward in recent years," said Doug McVitie, managing director of Arran Aerospace, a forecasting company in France.

Mr. Al-Malik said Middle Eastern governments including Dubai, Abu Dhabi and Qatar had ordered as many as 300 aircraft for delivery in the next five years and Dubai Aerospace would order its first this year.

The Dubai Government at the weekend announced the formation of Dubai Aerospace Enterprise as a holding company with six operating subsidiaries.

Dubai Aerospace Enterprise will be chaired by Sheikh Ahmed bin Saeed al Maktoum, chairman of the Emirates airline group and president of the Dubai department of civil aviation.

Dubai's ambitious foray into the aerospace industry will build on the presence the emirate has already established in the aviation sector through the development of Dubai international airport and the rapid expansion of Emirates into one of the world's leading long-haul airlines.

The business concept here is to create a new hub for aviation, from the leasing and maintenance of planes to training personnel at a new university to operating other airports and even manufacturing aircraft. It clearly makes excellent business sense to lever off Emirates position as a major buyer of aircraft to promote the DAE to the aircraft manufacturers like Boeing and Airbus.

About the Author
Written by H. Stephanoff.