The recently launched $272 million joint venture for manufacturing the next generation seats and interiors for aircraft has received an overwhelming response from the UAE and GCC investors, its UAE-based promoter said.

“Investors from different Middle East countries are showing great interest in the project with a number of subscriptions already signed on the first day of the launch. The joint venture holds immense potential for growth and return on investment due to massive expansion and development of the global aviation industry,” said Sara Ismail Mohamed, CEO of Abu Dhabi-based Al Bashayer Investment.

The lead investor for the project is IPM Investment (IPM), a Dubai based private equity and venture capital company, which is offering shares of Euro 36 million ($51.8 million) in United Seating Technologies (UST) to private investors.

IPM has taken a 30 per cent share in UST and has also contracted to set up a regional sales and aftermarket support facility in Dubai for customers in the Middle East, Africa and the CIS for United Seating Technologies Middle East (UST-ME).

IPM has entered into agreement with Corporate Consulta of Switzerland for the joint venture project that was structured by and between Aerospace Life-Support Industries and Corporate Consulta, Fribourg-based Swiss corporation, to create Jiahang United Seating Technologies (JUST). UST brought in Italian design firm Bertone and aircraft seat engineering company, Optimares, as independent project contract partners.

Both Aerospace Life-Support Industries and Corporate Consulta have allocated an initial investment of 100 million euros for Jiahang United Seating Technologies (JUST).

The promoters are looking at obtaining the commitment of a select group of investors to subscribe for 28.8 million shares in the company for a total commitment of 36 million euros.

Al Bashayer Investment, an Abu Dhabi-based investment company, is the placement agent, while Maples Fund Services, based in DIFC, is the administrator and custodian. The auditors are Grant Thornton. The legal advisors on this investment project are Bin Shabib and Associates.

The joint venture has the potential to tap approximately 20 per cent of the global market business and expect internal rate of return (IRR) of 36 per cent on an average over an initial 10-year span, promoters said.

“The UAE airlines are a reference in the commercial aviation market providing a major hub in the GCC conveniently connecting to all continents. They have wisely invested in aircraft and airport facilities to increase capacity, for the UAE to handle more than 250 million passengers annually, until 2020,” said Sara Ismail.

Becoming the only commercial aircraft seating and interiors manufacturer in China but with worldwide market coverage, the JUST plant will have a capacity to manufacture 110,000 passenger places per year, for a 15 to 20 per cent world market share in commercial airline aircraft-seating requirement.

“We welcome the involvement of UAE investors for this project which will be long-term beneficial not only for the countries and investors, but also the whole of the aviation industry,” said Prof Xu, member of the board of directors of Aviation Life-Support Industries and chairman of the board of JUST.

“The project engages high technology 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 said Dubai Airshow, to be held from November 13 to 17, will see the presentation of a “long range economy class” and a “long range premium economy class seat” while Aircraft International Expo in Hamburg in March, 2012, will round up and conclude the third phase of the product launch with a “long range new generation economy class” seat and “new generation extra long range first class seat”.

This will complete the initial full range product line of nine new seats based on five distinct advanced technology structures will be manufactured. The seats and interiors will be certified to international standards including the European Aviation Safety Agency (EASA) standards and in compliance with the European Technical Standard Order (ETSO), he added.

The project’s growth potential is reflected by the expansion in aviation industry globally. The number of airplanes in the worldwide fleet 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 will total 33,500 over the next 20 years with a value in excess of $4 trillion. – TradeArabia News Service