Mubadala Aerospace strikes deal on engines with Rolls-Royce

Rolls-Royce will support Mubadala in establishing a Trent XWB engine maintenance, repair and overhaul facility, which will be the first in the Middle East.

DUBAI, UNITED ARAB EMIRATES, NOVEMBER 19, 2013. John Gay, Regional Director UAE of Rolls Royce Industrial Power Engineering at the Dubai Airshow held at Dubai World Central (Photo: Antonie Robertson/TShow more

Mubadala Aerospace has struck a landmark deal with Rolls-Royce to service and maintain the British company’s Trent XWB engines in Abu Dhabi.

Under the agreement, Rolls-Royce will support Mubadala in establishing a Trent XWB engine maintenance, repair and overhaul (MRO) facility, which will be the first in the Middle East.

Rolls-Royce will also source up to US$500 million of engine components from Mubadala over a period of 10 years, once the Abu Dhabi government-owned strategic investment company has a manufacturing capability.

“Mubadala has shown that it has the capability to grow its businesses and this deal with Rolls-Royce for engine maintenance effectively broadens their horizons, diversifies their operations into what is traditionally seen as a high yield segment,” said Saj Ahmad, the chief analyst at StrategicAero Research.

"It also gives them a springboard to showcase to Trent-XWB customers like Etihad, Emirates and Qatar Airways, that there is a centre of regional excellence right on their doorstep."

The Trent XWB has found a significant market in the Middle East, with 25 per cent of the orders for this engine coming from customers in the region.

Global aviation giants such as Airbus, Boeing and General Electric (GE) are adding local manufacturing and repair facilities and creating high-end jobs as they scoop up orders for planes and engines worth billions of dollars from the region at a time of faltering global growth.

Abu Dhabi on Monday also struck deals worth US$5 billion to make parts for Airbus and Boeing. Boeing will help Mubadala to develop a facility to make high-tech composite materials favoured in the aviation industry because of their light weight and fuel efficiency.

The new deals aim to add long-term value to Abu Dhabi’s vision to become an integral link in the global aerospace manufacturing supply chain and could also develop expertise in aerospace engineering in the local workforce. They could also bring more skilled jobs to the emirate at a time of massive expansion by carriers such as Emirates Airline and Etihad Airways.

“This is an exciting opportunity which will significantly extend both our aerospace supply chain and aero engine support capabilities in the region,” said Tony Wood, the president-aerospace at Rolls-Royce.

At the Dubai Airshow on Sunday, Emirates ordered $99bn worth of planes, Etihad made a $67bn order, while Qatar Airways orders totalled about $2.8bn.

“With those three airlines big buyers of the Rolls-Royce powered Airbus A350XWB family, this deal with Rolls-Royce gives them a competitive advantage in key MRO services that airlines would otherwise have to seek outside of the GCC,” said Mr Ahmad.

Mubadala, meanwhile, has also signed a joined venture agreement with GE Aviation. Under the deal, the two partners will enhance the Gnx maintenance, repair and overhaul facility.

The agreement also included the study of setting up a regional GEnx logistics centre in Abu Dhabi and a direct investment by GE in the existing GEnx engine shop, dedicated to engine repair.