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Viewing cable 08RABAT103, MARRAKECH AEROEXPO - LOCKHEED MARTIN OVERSHADOWS DASSAULT

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Reference ID Created Released Classification Origin
08RABAT103 2008-02-01 12:24 2011-08-24 16:30 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Rabat
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