Boeing, Saudi Arabian Military Industries to Set up Aircraft, Helicopter MRO Joint Venture

Boeing signed a Memorandum of Agreement (MoA) with the Saudi Arabian Military Industries (SAMI) yesterday to develop a joint venture (JV) aiming to localize more than 55% of the maintenance, repair & overhaul (MRO) services for fixed and rotary-wing military aircraft in Saudi Arabia.

The agreement will also transfer technology to install weaponry on these aircraft as well as localize the supply chain for spare parts in the Kingdom.

The signing ceremony came in conjunction with Saudi Crown Prince Mohammed bin Salman's visit to Seattle, which included an official visit and tour of Boeing's aircraft manufacturing facilities. The agreement was signed by H.E. Ahmed Al-Khateeb, Chairman of SAMI, and Dennis Muilenburg, Chairman, President, and CEO of Boeing, at Boeing's commercial manufacturing facility in Everett, Wash.

The joint venture agreement will provide sustainment services for fixed- and rotary-wing military aircraft of the KSA ‎military fleet and will be the sole provider of these ‎services for all military aviation platforms of ‎the KSA military fleet, strengthening the Kingdom's defense capabilities and enhancing its deterrent potential.

The MoA will result in the development of local research, design, engineering, manufacturing, and MRO abilities. The JV will continuously improve performance and growth, upgrade the readiness of and increase confidence in the Saudi military fleet, enhance maintenance capabilities, and reduce support costs throughout the fleet's life.

In addition, the agreement will create 6,000 jobs and training opportunities for Saudi youth, support local content, improve Saudization levels in the industry, and assist towards achieving the ambitious Vision 2030 plan.

Dr. Andreas Schwer, CEO of SAMI said, "The significance of the MoA, which is signed today, will enable SAMI and Boeing to play a key role in leading and laying the foundational framework for Saudi's defense sector industrialization, in line with the goals of the Kingdom's National Transformation Program and Vision 2030.

In addition to local sustainment capabilities, the inevitable partnership between the two companies could explore the creation of intellectual property as well."

Once the MoA is operational, the joint venture will provide a foundation for future platform sales and for expanding Boeing's presence in the Kingdom to support market growth for both commercial and defense programs.