Israel Aerospace Industries said Wednesday it signed an agreement with Etihad Engineering to establish a facility in Abu Dhabi that will convert Boeing 777-300ER passenger planes into cargo aircraft.
The new facility, which will operate as the company's maintenance center in Abu Dhabi, aims to meet the growing demand for large cargo jets.
LISTEN: Bennett meets Biden. This could be Israel’s worst-case scenario
"Not only do we see the demand, but we view it as a greener, more profitable, highly innovative solution for our airline customers, and an excellent way to drive value for our business," Tony Douglas, chief executive of Etihad Aviation Group, said in a statement.
Demand for cargo plane conversions has been on the rise with the increase in ecommerce and the decline in value of used planes during the COVID-19 pandemic.
State-owned IAI currently converts Boeing 737, 747 and 767 passenger aircraft for cargo use. It has said it is currently developing a conversion method for the Boeing 777 and expects to finish the licensing process in 2023.
The deal comes a year after Israel and the United Arab Emirates agreed to normalize relations under the U.S.-sponsored Abraham Accords.
Over the past year, Israeli firms have forged a number of deals in the UAE.
- Abraham Accords a year on: Israel's biggest challenges remain
- A year after their signing, here's how the Abraham Accords changed the Middle East
- First Israeli born in Dubai, capping 'a year of peace'
In March, IAI said it would jointly develop an advanced drone defense system with the UAE's state-owned weapons maker EDGE.