Boeing-Airbus Invest $5 Billion in U.A.E. as Gulf Orders Climb

Boeing Co. and Airbus SAS each awarded manufacturing contracts worth $2.5 billion to Abu Dhabi-based Mubadala Aerospace as jet orders from carriers in the Middle East increasingly dominate order books.

The twin deals will triple the size of Mubadala’s Strata aerostructures plant and could prompt it to open a new site in the U.S., China or India, depending on the parts required, Strata Chief Executive Officer Badr Al-Olama said today.

Strata already has an agreement to provide flap track fairings that help smooth the air flow on Airbus’s A330, A350 and A380 models and will seek work on Boeing’s rewinged 777 after carriers in the United Arab Emirates ordered 175 of the jets, the CEO said. It already makes parts for the existing 777 and the new 787 Dreamliner.

“It makes sense that something will be made in the U.A.E,” Al-Olama said in an interview at the Dubai Air Show, adding that his company has told Boeing it aims to focus on movable wing parts and the empennage or tail assembly. “We will be able to easily build any part of the wings,” he said.

Abu Dhabi, home to the 6 percent of the world’s proven oil reserves, is seeking to diversify into aerospace as U.A.E. carriers Emirates and Etihad build up some of the world’s biggest wide-body fleets to funnel passengers through Gulf hubs.

Emirates yesterday announced a record-breaking 150-plane deal for the Boeing 777X, as the revamped jet is known, while also ordering 50 more A380 superjumbos, for which it’s already the biggest customer. Etihad placed an order 25 for 777Xs.