The $272 million joint venture launched recently for manufacturing the next generation seats and interiors for aircraft received an overwhelming response from the UAE and other GCC investors.
Sara Ismail Mohamed, Chief Executive Officer of Abu Dhabi-based Al Bashayer Investment said that given the growth potential of fast-expanding global aviation industry, investors are showing great interest in the project. She said: ?The joint venture holds immense potential for growth and return on investment due to massive expansion and development of the global aviation industry.?
IPM Investment, a Dubai-based private equity and venture capital company, is the lead investor. They have acquired about 30% of shares of the United Seating Technologies (UST). The company also has been contracted for regional sales and aftermarket support facility in Dubai for customers in the Middle East, Africa and Central Asia.
IPM has entered into a joint venture with Corporate Consulta SA of Switzerland to create Jiahang United Seating Technologies (JUST). They have also approached the Italian design firm, Bertone, and Optimares, an aircraft seat engineering company, as independent project contract partners.
Al Bashayer Investment is the placement agent, while Maples Fund Services is the administrator and custodian. Grant Thornton is the auditor, while Bin Shabib and Associates are the legal advisers for the investment project.
Sara Ismail added: ?The UAE airlines are a reference in the commercial aviation market as a major hub which conveniently connects all continents. They have wisely invested in aircraft and airport facilities to increase the capacity to handle more than 250 million passengers annually, until 2020.”
The JUST plant will have a capacity to manufacture around 110,000 passenger places per year, for a 15-20% world market share in commercial airline aircraft-seating requirement.
Prof Xu, member of the board of directors of Aviation Life-Support Industries and chairman of the board of JUST said, ?The project engages hi-tech firms from Europe and the manufacturing capabilities of China. The joint venture company will be the trend-setter in the next generation technology of aircraft seats and interiors.?
Dominique Menoud, president of the Commercial and Technical division of JUST, said the economy, premium and business class seat types were unveiled at the Paris Air Show on June 21. “Aircraft Interiors International Expo in Seattle during September will be utilized to introduce a ?long range business class lie flat? seat and a ?long range business class fully flat seat?,? he added in an interview.
The initial full range product line includes nine different seats based on five distinct advanced technology structures. The European Aviation Safety Agency (EASA) and the European Technical Standard Order (ETSO) will certify the seats and interiors.
The Dubai Airshow, to be held between November 13 and 17, will showcase ?long range economy class? and ?long range premium economy class seat,? while Aircraft International Expo in Hamburg, to be held in March, 2012, will present the ?long range new generation economy class? seat and ?new generation extra long range first class seat?.
The project?s growth potential is on the basis of expansion in the aviation industry worldwide. It is estimated that the number of airplanes will nearly double from around 19,400 airplanes to more than 39,500 airplanes by the year 2030.
Airplane deliveries for fleet growth and replacement of ageing airplanes is estimated to be around 33,500 in the next 20 years with a value in excess of $4 trillion. The promoters expect an IRR of 36% after the initial span of 10 years. The company also aims to tap 20% of the global market business.
Sources: Khaleej Times, TradeArabia News Service