VZCZCXYZ0008
RR RUEHWEB
DE RUEHRB #0103/01 0321224
ZNR UUUUU ZZH
R 011224Z FEB 08
FM AMEMBASSY RABAT
TO RUEHC/SECSTATE WASHDC 8087
INFO RUEHCL/AMCONSUL CASABLANCA 3858
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEHFR/AMEMBASSY PARIS 4912
RUEHNK/AMEMBASSY NOUAKCHOTT 3647
RUEHAS/AMEMBASSY ALGIERS 4651
RUEHTU/AMEMBASSY TUNIS 9486
UNCLAS RABAT 000103
SIPDIS
DEPT FOR NEA/MAG AND EB/TRA
USDOC FOR ITA/FCS/ANESA GREG LOOSE
USDOC FOR ITA/MAC/HOLLY VINYARD
USDOC FOR ITA/FCS/ADVOCACY CENTER JOSHUA REITZE
SIPDIS
SENSITIVE
E.O. 12958: N/A
TAGS: EAIR ECON MO
SUBJECT: MARRAKECH AEROEXPO - LOCKHEED MARTIN OVERSHADOWS DASSAULT
1. (U) In the first aviation trade show of its kind in North
Africa, 300 exhibitors from 12 countries gathered for Morocco's
inaugural Aeroexpo at the Marrakech airport, January 23-25. Planned
as a biannual event, Aeroexpo Marrakech 2008 showcased Morocco's
growing aeronautical industry while attracting major aerospace
companies from the U.S. and Europe. Lockheed-Martin was the show's
biggest attraction, sponsoring daily F-16 flying demonstrations and
exhibiting a panoramic F-16 flight-simulator that appeared to harden
the cement on the Moroccan F-16 deal.
2. (U) Morocco's aeronautical industry has experienced double digit
growth in the past five years, with new companies taking advantage
of European proximity at lower labor costs. Moulay Belghiti,
Director of the Moroccan Aeronautical Industry Association, told
econoff that his association has grown from 10 to 60 members in the
last five years and now employs over 5,000. According to Transport
Minister Karim Ghellab, Morocco's aeronautics industry is on track
to experience 20 percent yearly growth, with a goal of employing
12,000 by 2015. In 2006, gross revenues in the sector were
approximately USD 400 million.
3. (U) The majority of Morocco's aero industry is located in the
Casablanca airport industrial center (aeropole) and the Tangier
Duty-free Zone. According to Belghiti, the industry mostly consists
of small capital firms who supply European customers. Principal
products include electrical harnesses, fasteners, and wire-bundles;
electronics and avionics parts; and hydraulic and electrical
actuator components. While Moroccan industry does not yet include
sub-assembly of major components, French engine manufacturer Snecma
has a regional engine repair facility in Casablanca in partnership
with Royal Air Maroc. Approximately 39 percent of Moroccan aero
exports go to France, (EADS/Airbus), with only 5 percent to the
U.S., primarily wire-bundles for Boeing.
4. (U) Belghiti, who heads a parts and tool distribution business,
remarked about the substantial cost of participating in the event.
With exhibit floor space costing an average of USD 450 per sq meter,
together with display and marketing costs, most companies invested
over USD 15,000 for the three day exhibit. Belghiti said 15 - 20
thousand dollars was a substantial, up-front marketing investment
for many Moroccan firms, including his. Nonetheless, he is happy he
did it, as his company gained lucrative new European business. With
this positive 2008 experience, Belghiti predicts even larger
Moroccan participation in 2010.
5. (SBU) U.S. exhibitors overshadowed their competition, with
particularly impressive displays by Lockheed Martin, Hawker
Beechcraft, and Cessna. While Lockheed Martin's F-16 panoramic
flight simulator was a huge draw in the exhibitor's pavilion, its
daily F-16 flying demonstration was the airshow's main attraction.
In addition to the daily flight displays, Lockheed-Martin performed
to two additional demonstrations to private audiences. One was for
the Moroccan F-5 fighter pilots who have been designated to
transition to the F-16 and the second was for members of the
Moroccan Parliament involved in the fighter purchase. Notably
absent was Lockheed Martin's chief competitor for the Moroccan
fighter sale, Dassault Aviation, maker of the Rafale. Note:
Aeroexpo occurred just a week following the end of Congressional
notification by the Defense Security Cooperation Agency (DSCA) of a
possible sale to Morocco of 24 F-16C/D Block 52 fighters, valued at
USD 2.4 billion. A formal letter of offer and acceptance (LOA) for
the sale is expected to be signed within the coming few weeks. End
Note.
6. (SBU) Hawker Beechcraft (formerly Raytheon) also made a strong
showing in support of finalizing a sale of 24 T-6B trainers to the
Royal Moroccan Air Force (RMAF) to replace their aging fleet of
T-37s. The regional sales manager for the T-6B reported extremely
positive feedback from RMAF leadership and felt confident they would
shortly be able to finalize the deal valued at approximately USD 200
million. Note: Congressional notification of the possible sale was
made on December 18. End Note.
7. (U) A total of ten U.S. firms exhibited at this year's Aeroexpo:
Africair (representing Cessna), Airparts Inc, Global Inflight
Products, Hawker Beechcraft Corp, ITT Industries, Lockheed Martin,
Merex Inc, Pratt & Whitney, S3 International, and Van Bentem
Aviation. Although Boeing Corp did not have an exhibit, they hosted
a Gala dinner on the first night and were a principal event sponsor.
The U.S. Air Force also exhibited, supplying both an F-16C and
MC-130H static display. Numerous other U.S. firms attended and
walked the floor of the show including Northrop Grumman, Sensis, and
Kallman Worldwide, Inc. Post's Commercial Service in Morocco also
had an exhibit, offered business counseling, and provided on the
ground assistance to companies looking for business opportunities,
representatives, or joint venture partners.
8. (SBU) A significant limiting factor for the event was
insufficient "ramp" space for additional exhibitors and display
aircraft. As a result, a U.S. Air Force MC-130H was the show's
largest static display and there were no large commercial aircraft
exhibits. According to Abdelouahab Yaalaoui, Director of Civil
Aviation, the National Airport Authority upgrade plan includes a
taxiway and additional ramp space for Marrakech that will be
completed before Aeroexpo 2010, permitting expansion of the event to
large commercial aircraft. Aeroexpo organizers tell us that they
have already received assurance of a large Russian delegation in
2010.
JACKSON