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Responding to the evolving landscape of the airline industry, where economic conditions are putting increased pressure on liquidity, Abu Dhabi’s Mubadala Development Company launched a new venture to provide component and engine financing solutions to the aerospace sector.
Sanad Aero Solutions (Sanad) was unveiled to the industry at the biannual Singapore Airshow, aiming to deliver new capital for airlines and Original Equipment Manufacturers (OEM) alongside a growing number of services from Mubadala’s maintenance, repair and overhaul (MRO) companies, SR Technics and Abu Dhabi Aircraft Technologies (ADAT).
Sanad has already signed a deal for twelve spare engines valued at $100m with German carrier Air Berlin. This agreement includes engine maintenance work for a major part of the carrier’s fleet to be completed by SR Technics as part of a ten year contract.
Sanad is providing financing valued in excess of $30m over a 10-year period as part of a total component solution contract between SR Technics and Etihad for the airline’s entire Airbus fleet, under this contract ADAT provides onsite technical and logistical support.
Mubadala Aerospace, a business unit of Mubadala Development Company says there is currently an estimated $45bn worth of spare parts held globally with carriers spending in excess of $40bn on maintenance annually. The number of commercial aircraft in operation is expected to increase to over 27,000 by 2020, an increase of over 5,000, taking annual maintenance costs above the $60bn mark.
Humaid Al Shemmari, Executive Director of Mubadala Aerospace, speaking at the Singapore Airshow said that the company’s maintenance operations are attracting interest from airlines across the globe.
Al Shemmari said: "Through SR Technics and ADAT we have two very strong MRO companies strategically positioned in two important regions. We believe that by offering component and engine financing solutions for airlines and OEMs in partnership with our existing network we are able to provide a truly integrated service, designed to meet today’s market conditions and the changing shape of the industry".
"Component and engine financing presents a timely and compelling opportunity for airlines and OEMs to raise capital and benefit from world class technical solutions through our expanding global MRO network, we are very pleased to be supporting Air Berlin and Etihad through our model," he added.
Mubadala is delivering its strategy to make Abu Dhabi a global aerospace hub, a key component of the Emirate’s diversification strategy. In addition to maintenance, repair and overhaul, Mubadala Aerospace has formed partnerships with the world’s leading aerospace organizations to develop manufacturing, engineering, research and development, and pilot training facilities in Abu Dhabi and across the globe.
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