Mubadala joins the Boeing club

Signing the $1bn deal with Boeing to manufacture major sections for 777 and 787 airliners is just the start of a steep learning curve for Mubadala Aerospace.

Boeing already sub-contracts large sections of airframe manufacturing to subsidiaries and partner companies around the world including in Italy, Australia and Japan. Duncan Chard / Bloomberg

Signing a US$1 billion (Dh3.67bn) deal with Boeing to make major sections for 777 and 787 airliners is just the start of a learning curve for Mubadala Aerospace.

The Abu Dhabi company's aspirations to become one of the world's leading aerospace players are about to meet the quality control system of Boeing Commercial Airplanes.

Getting here has taken two years of negotiations, and now Mubadala Aerospace has 12 months to pass the test. "We began discussing this contract with Boeing in 2010," said Homaid Al Shemmari, the executive director of Mubadala Aerospace.

The UAE aerospace company is a unit of Mubadala Development, a strategic investment company owned by the Abu Dhabi Government.

"Now we are working with them to set up the production process," Mr Al Shemmari said. "We have to set up a new production line and process, and we now have to put in place more engineers to operate it. We already have a training programme for UAE nationals and are adding another 40 to that now, and we will be adding a further 50 at the end of this year.

"It will be a staged approach with Boeing. And we'll have to make sure our standards are up to their liking, because Boeing will put us through all their internal processes. We have 12 months to do this."

Boeing already sub-contracts large sections of airframe manufacturing to subsidiaries and partner companies around the world including in Italy, Australia and Japan. Adding Mubadala to the supplier list will deliver significant benefits to Boeing in production capacity as well as giving Mubadala a bigger seat at the top table of global plane makers.

Its Al Ain plant already makes wing components called flap track fairings for Airbus A380s, and is the sole provider of flap track fairings for the A330/340 series. Flap track fairings are aerodynamically shaped pods slung beneath the wings and housing the machinery that extends and retracts the wing flaps.

The Al Ain plant also makes parts for the Italian aerospace company Alenia Aeronautica.

"We have capacity constraints at many of our facilities," said Jim Albaugh, the president and chief executive of Boeing Commercial Airplanes. "By 2015 we'll be delivering 700 aircraft a year, and we'll take all the capacity we can get."

Before Mubadala qualifies to contribute to that supply, it has a lot of hurdles to jump, says Mr Albaugh.

"The contract will require us to work with them until they get to the point where they will be delivering a quality product on schedule," said Mr Albaugh. "There will be a lot of certifications and approvals.

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