Mubadala’s Airbus deal an important step

Congratulations to Mubadala, the Abu Dhabi investment fund, which inked a deal with Airbus last week to build components for the next generation of commercial aircraft.

The joint venture is worth $1 billion (Dh3.67bn) over 10 years but, more importantly, gives Abu Dhabi a toehold in the ultra high-tech aerospace industry. Mubadala executives were clearly delighted by the deal but I have a suspicion that it does not go as far as they would have liked.

The aerospace rumourmill had suggested that Mubadala was willing to put up serious money in order to win the right to assemble part of Airbus’s next plane, the A350.

Such a deal could have been good for both sides. It would have turned Abu Dhabi into a serious player in the aerospace business overnight, while giving Airbus much needed capital to build the aircraft, which will probably cost more than $12bn to develop.

However, in recent months Airbus has been learning lessons from its rival Boeing, which has suffered from outsourcing too much production to its suppliers too soon.

Large sections of Boeing’s 787 Dreamliner are being built in Japan and Italy and then flown to Seattle for final assembly.

Unfortunately, the quality has not matched Boeing’s expectations and the 787 is now over a year late.

This is not an industry where you can substitute ambition and money for experience.

Mubadala has to learn to walk before it can run, or fly, and the Airbus deal is an important first step.