ANALYSIS: ADAT sale signals strategic change for Mubadala

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Abu Dhabi’s investment house Mubadala has signalled a major switch in its ambitious aerospace strategy, offloading its maintenance, repair and overhaul unit ADAT to Etihad Airways while taking full control of specialist Italian airframer Piaggio Aero.

Although ADAT’s component and airframe activities – including a new three-bay Airbus A380 hangar – will transfer to the Abu Dhabi airline, Mubadala will retain the higher-margin engine MRO business, setting up a new company. This is likely to be in Al Ain, where it already has military MRO activities and which is home to its aerostructures subsidiary Strata.

At the 2013 Dubai air show, Mubadala signed deals with Rolls-Royce and GE Aviation to establish “centres of excellence” for the Trent XWB and GEnx in the oasis city. ADAT also overhauls Engine Alliance GP7200s for the A380.

The ADAT facility next to Abu Dhabi’s international airport serves around 70 airlines and Etihad will continue to offer third-party work. The two companies say a transition plan will minimise disruption and ensure “business as usual”.

Mubadala also owns Zurich-based SR Technics, a full-service MRO house which has also moved into VIP airliner completions.

The Abu Dhabi group has also bought out its co-shareholder Tata Industries’ stake in Piaggio Aero, leaving it with 98% of the share capital.

Abu Dhabi-based investment and development company Mubadala has taken full control of Piaggio Aero – developer of the P.180 Avanti II twin-pusher and its unmanned surveillance and reconnaissance stalemate, the P.1HH HammerHead – following its acquisition of Tata Industries’ 45% stake.

In November last year, both companies increased their shareholdings by injecting €190 million ($253 million) into the company to fund development of new projects in the special-missions arena, seen as having better growth potential than the flatlining light-cabin business aircraft sector.

Piero Ferrari – head of the racing-car family, who was part of the consortium that rescued Piaggio Aero from bankruptcy in 1998 – will hold the remaining 2% of shares.

Piaggio is believed to be working on new designs and a product announcement could be made later this month at the European Business Aviation Convention and Exhibition in Geneva.

Piaggio’s business has been hit hard by the collapse of the business aviation market. Deliveries of its Avanti II have plummeted from a record 30 aircraft in 2008 to only two aircraft last year, data from the General Aviation Manufacturers Association shows. In response, Piaggio has intensified its focus on the special-missions sector and is hoping to secure certification for the P.1HH in 2015.