Skip to content Skip to Search
Skip navigation

Abu Dhabi eyes aviation services giant to boost its manufacturing

There is a proposal for Abu Dhabi Aviation to combine Etihad Engineering with other service companies
There is a proposal for Abu Dhabi Aviation to combine Etihad Engineering with other service companies
  • Plan positions emirate as global hub for aviation services
  • Develops manufacturing to meet non-oil export goals
  • Transaction proceeds subject to shareholder and regulatory approvals

ADQ, an Abu Dhabi-based investment and holding company, announced plans on Monday to create a global aviation champion as part of the emirate’s push to grow its manufacturing sector.

The company has submitted an offer to Abu Dhabi Aviation (ADA) to combine its 100 percent share of Etihad Engineering and Advanced Military Maintenance, Repair and Overhaul Center (AMMROC) with ADQ’s 50 percent ownership of GAL, provider of integrated aviation solutions for military and civilian customers.

It said its goal is to establish a diversified aviation services and maintenance, repair and overhaul (MRO) giant, with commercial relationships with the world’s largest aircraft manufacturers.

The company added that the “globally competitive business” would be headquartered in Abu Dhabi, to position the emirate as a hub for aviation MRO services, logistics, supply chain and advanced engineering capabilities.

John Grant, chief analyst at global travel data provider OAG and partner of Midas Aviation, told AGBI: “It’s a sensible strategic development given that the Middle East has become the epicentre of aviation.

“With some of the fastest growing markets close by it will undoubtedly develop both locally and become the basis of a global supplier. 

“With the pandemic behind us and both major aircraft manufacturers with full order books for the coming years the need for such services will only rise exponentially.

“The development also supports the wider positioning of the UAE as an area of aviation expertise which will attract more jobs and employment for all.”

Airport, Airplane, Aircraft
Advanced Military Maintenance, Repair and Overhaul Center (AMMROC)

The proposal comes as the Abu Dhabi Department of Economic Development (ADDED) reaffirmed its support of the manufacturing sector’s role in increasing the emirate’s non-oil exports by 2031. 

The Abu Dhabi Industrial Strategy (ADIS) aims to strengthen the emirate’s position as the region’s most competitive industrial hub by investing AED10 billion across six transformational programmes to more than double the size of Abu Dhabi’s manufacturing sector from AED83.5 billion in 2021 to AED172 billion by 2031. 

ADDED is rolling out initiatives to increase access to financing, enhance ease of doing business, and attract foreign direct investment. 

Rashed Abdulkarim Al Blooshi, undersecretary of ADDED, said that despite challenges in the global economy, Abu Dhabi’s non-oil trade during the first half of 2022 grew 12 percent to AED124 billion, and exports rose 26 percent to AED49.5 billion. 

Helicopter, Aircraft, Vehicle
GAL, part of ADQ, provides integrated aviation solutions for military and civilian customers

“The industrial sector performance was impressive, 136 new industrial licences had been issued, and our total number of active in-production factories now stands at 866,” he said.

“While these facts paint a bright picture of our economy, we need to work closely with major players in manufacturing sector and ensure they are supported to thrive and play a greater role in achieving strategic objectives”.

ADQ said the combined group would have assets of approximately $2.6 billion with an extensive portfolio of aircrafts, MRO centres and hangars.

On closing of the transaction ADA will issue to ADQ a convertible instrument that would convert into approximately 652 million ordinary shares in the capital of ADA.

The price at which the convertible instrument will convert into shares in ADA is AED 6.14 per share.

The offer implies an equity valuation of approximately AED 2.7 billion for ADA. Following completion, ADQ would own approximately 59 percent of the entire issued share capital of ADA.

Mohamed Hassan Alsuwaidi, managing director and CEO of ADQ, said: “The proposed transaction will further position Abu Dhabi as a centre of aviation excellence, combining the strengths of each asset to form a global MRO and aviation services champion to capitalise on growth opportunities in the aviation industry. 

“The proposed combination will provide a framework to investing in the future development of an advanced aviation ecosystem that supports the sustainable transformation of Abu Dhabi and the UAE’s economy for the long-term.”

If the board of Abu Dhabi Aviation recommends proceeding with the transaction, it will be subject to shareholder and regulatory approvals.

Latest articles

Workers at a Riyadh construction site. The Tonomus competition aims to find innovation in the sector

Saudi Arabia races to find technologies for futuristic cities

Saudi Arabia is urgently seeking new technologies for its construction and real estate sectors as it races to make good on its pledge to build futuristic multi-billion-dollar cities. Tonomus, a subsidiary of crown prince Mohammed bin Salman’s $500 billion signature Neom development, has joined forces with the Public Investment Fund to launch a competition offering […]

Riyadh Air Comac C919

Riyadh Air not buying from China’s Comac ‘for now’

Riyadh Air, Saudi Arabia’s new national carrier, will not consider China’s Comac for its narrowbody order to be announced later this year. However, the airline said it saw a future in Saudi Arabia for Comac, the Commercial Aircraft Corporation of China, as the Chinese alternative to Boeing and Airbus.  “The narrowbody order is in its […]

Organisations have protested US investment bank BlackRock’s participation in the bid to buy a stake in Malaysia Airports Holdings

Malaysian airport deal faces Gaza war backlash

Plans by a consortium, including the UAE’s largest sovereign wealth fund, to buy a stake in Malaysian airports have been hit by protests against the deal from local business organisations in the Asian country. As many as 22 organisations have called upon the Malaysian government to block US investment bank BlackRock’s participation in the bid […]

Bahrain recorded its highest electricity load in its history of 3,819MW in August 2023

Bahraini power company completes $1bn refinancing

Bahrain’s Al Dur Power & Water Company has closed a $1.2 billion refinancing facility provided by a syndicate of 17 local, regional and international banks. The kingdom’s largest power generation and water desalination company will use the funds to refinance its existing project-level debt. The refinancing facilities extend up to 11 years and include a […]