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After huge aircraft deals, Airbus, Boeing ink supplier deals

Nov. 19, 2013, Dubai, U.A.E. - Airbus and Boeing signed deals to buy some $5-billion of parts and materials from Abu Dhabi on Monday, in a sign Gulf states are seeking a reciprocal boost to their economies from the huge orders they placed with the planemakers the day before.

November 19, 2013  By Reuters

Gulf airlines, led by Dubai’s Emirates and Abu Dhabi’s Etihad, struck
plane deals worth almost $150-billion – or more, including options – on
the first day of the Dubai Airshow on Sunday.

The buying spree underscored a shift in power in the aviation
industry, as oil-rich, fast-growing economies of the Gulf take advantage
of their strategic position between East and West to draw more
travellers from hubs in Europe and Asia.


While the deals are a big
boost to Airbus <EAD.PA> and Boeing <BA.N>, the world’s
dominant civil aircraft manufacturers, suppliers in Europe and the
United States are worried they will suffer from the growing
globalisation of the aircraft supply chain, in which Gulf firms are
playing a part.



Airbus agreed a new deal on Monday with Abu
Dhabi’s state investment fund Mubadala to expand their partnership “for
further composite and metallic aerostructure production in the United
Arab Emirates, in addition to procurement of composite raw materials,
worth $2.5-billion,” Mubadala said.


Reuters reported on Sunday the two parties were close to a deal.


Boeing said it had also signed a new 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.


Airbus shares jumped more than 3
per cent on Monday following Sunday’s slew of orders, which boost its
A380 – the world’s biggest passenger jet which had been struggling for
orders. Boeing’s orders boost its new version of the 777 jet.


hub cities in the Gulf – Dubai, Abu Dhabi and Doha – are spending
billions on infrastructure in a bid to attract travellers and diversify
their oil-based revenues, at a time when faltering Western economies are
struggling to invest.


Mubadala, which has a mandate to develop
the emirate’s local economy, has sought to play a major role in the
production of composite tail sections for passenger jets.


A group
representing U.S. airline pilots warned on Saturday the sale of hundreds
of planes to Gulf airlines that compete with U.S. carriers would have
“serious consequences for the U.S. economy and U.S. airline workers.


Airbus and Boeing have already established partnerships with Strata,
the composites manufacturing unit of Mubadala Aerospace which produces
parts at Al-Ain near Oman.


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