DUBAI, 21 February 2006 — The government of Dubai has launched Dubai Aerospace Enterprise (DAE), a global aerospace manufacturing and services corporation with an investment of 55 billion dirhams ($15 billion) to be spent in the next five years.

The project aims at tapping the $1 trillion global aviation industry and to transfer international aviation and aeronautics technology to the region.

DAE will become the holding company for six operational subsidiaries involved in manufacturing and services across 14 industry segments.

Dubai International Capital, Emaar Properties, Istithmar, Dubai International Financial Center, Amlak Finance and Dubai Airport Free Zone Authority backed by the government of Dubai, will have equal stakes in DAE, which will have a mix of debt and equity.

The initiative has been launched against a background of unprecedented growth in the regional aviation market.

The Middle East has become the leading buyer of aircraft internationally and together with Asia will account for three out of every five wide-body aircraft delivered in the next few years, according to a feasibility conducted by AT Kearney, the leading management consultancy.

The airport development and operations business will focus on greenfield development, extending existing airport infrastructure regionally and internationally, and targeting the rapidly emerging markets of China and India.

The aircraft leasing and finance business will capitalize on the rapid growth of the wide-body aircraft fleet, primarily Airbus A380 and A350, Boeing 777 and 787, in the Middle East and Asia.

DAE’s aircraft leasing solutions will leverage funding options available in the Islamic and international finance sectors to provide airlines with increased operational flexibility and leaner asset structures.

The Dubai-based Aerospace University and Research and Development facility will offer degrees and apprenticeships.

It will be located at Jebel Ali Airport City, which is expected to become the world’s largest aviation hub.

The aircraft maintenance, repair and overhaul (MRO) businesses will be developed in parallel and launched by the end of 2006, enabling DAE to pursue its objective to become a major MRO hub for airline operators in the region and internationally.

Components and engines manufacturing and assembly will offer global aerospace players the ability to establish their footprint in the Middle East in close proximity to their regional customers.

“DAE expects to take this to the next level and establish an aircraft final completion facility in Dubai,” said a DAE statement.

The group will also develop a presence in business segments such as space services, aircraft brokerage, aviation media and events, and aviation IT Systems.

Within a decade the industry is expected to emerge as one of Dubai’s richest sources of revenue. Some 30,000 new jobs will be created through DAE activities and 8,000 students a year will pass through the new university.

“DAE will expand gradually and by 2015 the group would have become a major force in the economy. It will emerge as a global leader in airport development and operations, achieve its target to be the third largest aircraft leasing company for wide bodies while providing global leadership in aviation education,” Dubai Airport Free Zone Authority Director-General Mohammed Al-Zarouni, who has been appointed DAE managing director, said.

Al-Zarouni, who said that DAE could become the biggest aviation company in the world, did not rule out a possibility of going public in the future.

“The door is open,” he said, adding that DAE will expand gradually and by 2015 the group would have become a major force in the economy.

In the medium term DAE will create and operate one of the largest MRO facilities and establish itself as a significant civil aircraft research, development and manufacturing cluster.

Airlines operating in the Gulf region are expected to nearly double their fleet in the next few years.

Airline passenger traffic in the Middle East and Asia (especially China) is expected to grow as much as 9 percent a year for the next 10 years, reaching 1.7 billion passengers by 2015. Annual air freight growth is also expected to exceed 6 percent. India and China alone plan more than 145 airport projects in the decade, including greenfield builds, expansions and upgrades. This growth will drive the rapid expansion of DAE.