Middle East defence demand 'ramping up' into next decade, Boeing says

UAE's Tawazun Council and Boeing to open facility for unmanned systems in Abu Dhabi to support the UAE Armed Forces

Vince Logsdon, vice president of international business development for Boeing Defence, at Idex 2023 in Abu Dhabi. Chris Whiteoak / The National

Boeing expects the Middle East governments' demand for defence products to grow for at least the next decade, with opportunities for collaboration on bolstering supply chains locally, a senior defence executive said.

“The Middle East region is a strategic partner for us across the board, whether it be Apaches, Chinooks, heavy lift helicopters … we see demand continuing through the next decade and further, so we will be in the region quite a bit,” Vince Logsdon, vice president of international business development for Boeing Defence, told The National on Tuesday.

While current macroeconomic pressures “are real” and the economic impact of the Covid-19 pandemic worldwide is “very big”, demand for defence products will “continue ramping up”, he said on the second day of the International Defence Exhibition (Idex) in Abu Dhabi.

Defence spending in the Middle East region is anticipated to grow 6.33 per cent between 2021 and 2026, according to defence intelligence firm Janes. It forecasts defence procurement to increase by 19.58 per cent during the period, up from the 2.41 per cent growth recorded between 2016 and 2021.

Higher oil prices can help oil-exporting countries with their wider plans for 2030 and beyond as oil revenue shore up procurement funds, the report said.

On Tuesday, the UAE's Tawazun Council and Boeing signed an agreement to open a facility for unmanned systems at Tawazun Industrial Park (TIP) to support the Armed Forces.

The facility will focus on aircraft engine overhauls and repairs and training for operators in the region, Boeing said in a statement.

The so-called centre of excellence will be owned and operated by Boeing's wholly-owned subsidiary Insitu. The facility will hire skilled Emirati workforce to develop advanced capabilities to enhance the Armed Forces' performance.

“The Tawazun Economic Programme is dedicated to supporting a principal goal of the UAE, which is to establish a core of advanced skills in the sector by collaborating with well-known international military corporations like Boeing and important players in the national industry,” said Abdulla Al Awani, chief executive of the Economic Programme at Tawazun Council.

Boeing and Insitu aim to enhance readiness and reduce costs for the Armed Forces “through localised maintenance, training and support”, said Lynn Fox, Insitu’s president and chief executive.

Globally, Boeing predicts that the defence, space and security market will be worth $2.8 trillion in the next decade, according to its 2022-2031 Defence and Space Market Outlook.

As of the fourth quarter of 2022, Boeing Defence, Space and Security's backlog reached $54 billion, of which 28 per cent represents orders from customers outside the US, the company said in a press briefing at Idex.

The US company is addressing increasing European demand, with shopping lists across the spectrum of its products, Mr Logsdon said when asked about the impact of the Russia-Ukraine war on business.

“The European market, we've seen a big ramp-up from many of the countries there,” he said.

“What we're seeing is a ramp-up in defence sales and we don't see a slowdown despite the pandemic and everything else.”