Boeing, Lockheed win $2.8bn UAE contracts

The Armed Forces has acquired 16 military transport aircraft from Boeing and Lockheed Martin, the US aerospace and defence giants, for Dh11 billion (US$2.99bn) in a deal arranged by an Emirates leasing company, officials announced yesterday.
The planes will be used to support peacekeeping missions, such as in Afghanistan, and for humanitarian assistance and disaster response, such as the recent earthquakes in Pakistan and the 2006 tsunami in Asia.

The sale includes four C-17 heavy transport aircraft from Boeing Integrated Defense Solutions, valued at Dh4.3bn, and 12 Lockheed Martin C-130J Super Hercules, worth Dh5.9bn, in addition to supplementary contracts for training, services and support.
The contracts follow similar purchases for the C-130 and C-17 by Qatar last year, as Gulf nations have begun expanding their capabilities to respond to humanitarian events and environmental disasters in the Arab world.

Last October, Qatar bought three C-130Js from Lockheed, in addition to an order last July for two Boeing C-17s and options for two more.

The latest contract is the largest to date for Waha Capital, an Abu Dhabi-based leasing company, and also the first known private-public partnership involving the financing of aircraft for the Armed Forces. Waha Capital is expected to purchase and manage the aircraft on behalf of the military.

Waha Capital is a 12-year-old holding company that began as Oasis Leasing and was renamed two years ago in a restructuring programme. Its leasing portfolio includes district cooling systems as well as 47 aircraft in use by commercial airlines worldwide.
“It is a first of its kind that such a transaction is arranged, structured by the private sector,” said Hussein al Nowais, the chairman of Waha Capital.

The two purchases dwarf other deals announced so far at the semi-annual IDEX military expo, the largest arms exhibition in the Middle East, as Gulf states continue to acquire arms and military equipment even as the price of oil has dropped in recent months.

Officials from Lockheed and Boeing framed the sale as a key vote of confidence that could pave the way for further sales in the region, one of the largest markets for military systems.

Rick Groesch, the regional vice president of international business development at Lockheed Martin, said the Middle East had begun taking a bigger slice of global revenues.

In the UAE, Lockheed recently signed a deal with the Armed Forces for between 200 and 300 PAC-3 defensive missiles, worth up to Dh6.61bn, and is also expected to sell the THAAD missile defence system, which can intercept ballistic missiles in outer space.

Waha Capital said it had already begun tapping the markets to raise the capital needed for the deal. “We will be going to local, regional and global markets,” said Mr al Nowais.

An initial deposit for the aircraft, typically of between 20 per cent and 25 per cent of the purchase price, was due soon, he said. Waha expected to announce additional financing in the summer.

The Air Force currently flies six military transport planes, while the Italian military uses Bateen Air Base to conduct support missions to troops in Afghanistan.

igale@thenational.ae The National

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