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Dubai economy is powered by the aviation and tourism sectors

Dubai economy is powered by the aviation and tourism sectors



GCC airport projects at $49bn

A new greenfield airport project at the north of Kuwait City with a project development value of $12 billion leads the list of the major airport projects in the GCC

July 2018

The GCC aviation sector will continue to ride high due to large airport construction projects with the estimated total value of 95 listed projects reaching $49 billion (Dh180 billion) in May 2018, according to BNC Network, a leading project intelligence provider in the Middle East and North Africa (Mena) region.

Among these, 68 projects worth $45 billion (Dh165 billion) are airport terminal projects while 27 projects worth more than $3 billion (Dh11 billion) involves hangar, runway and ancillary facilities, said a statement from BNC Network.

A new greenfield airport project at the north of Kuwait City with a project development value of $12 billion leads the list of the major airport projects in the GCC, it said.

Avin Gidwani, chief executive officer of BNC Network, said: “The expansion of the airline fleet will put additional pressure on the region’s aviation infrastructure in the future.”

“Therefore, the investment in airport capacity expansion as well as the development of new airports will help manage the future demand of air traffic,” he said.

Gidwani: the expansion will put additional pressure on the aviation infrastructure

Gidwani: the expansion will put additional pressure on the aviation infrastructure

“The airport projects are broadly in line with the development of the region’s aviation sector that is led by the two UAE carriers – Emirates airline and Etihad Airways as well as other leading regional airlines such as Saudi Arabian Airlines, Qatar Airways, Gulf Air, Kuwait Airways, Air Arabia, Fly Dubai and Oman Air,” he added.

Airbus recently said in its Global Market Forecast, the fleet size of carriers in the Middle East will more than double from 1,250 to 3,320 aircraft over the next two decades.

“The Middle East will need 2,590 new aircraft by 2036, for replacement of 520 older generation aircraft, and 2,070 aircraft for growth, 730 are expected to remain in service over the period,” Airbus report said.

The future demand for the Middle East’s fleet is valued at $600 billion from a total market value more than $5 trillion, Airbus forecast said. The current orders from Middle East-based carriers stand at 1,319 aircraft, of which 687 are single-aisle, 409 twin-aisle and 162 very large aircraft.

The report said passenger traffic to, from and within the Middle East will grow 5.9 per cent annually until 2036, well above the global average of 4.4 per cent.

While traffic between traditional markets will grow at a steady rate, the highest growth is expected to be on routes to Latin America (8.5 per cent per year to 2036). The aviation sector’s contribution is visible in Dubai economy that is powered by the aviation and tourism sectors, primarily driven by the growth of Emirates Airline and Fly Dubai.

The aviation sector is a crucial economic pillar for Dubai, accounting for more than 27 per cent of Dubai’s GDP, or $26 billion, according to Oxford Economics. This is expected to increase to more than 37 per cent by 2020 with a total annualised impact of $53 billion.

Gidwani said: “Dubai economy is a classic example and a textbook case of how aviation sector can make a significant difference in an economy. Emirates and Fly Dubai – the two airlines that use Dubai as their hub – are two major enablers of Dubai economy.”

“Not only does Emirates fly passengers from Africa to China, but it empowers businesses and helps trade flow from one country to other and one region to other and therefore helps economies to grow,” he said.

“Since the beginning of Emirates flights to African cities, businessmen from those cities have been travelling to source goods and products from China, India and Turkey and thus helped goods and trade flow to those cities from their source markets,” he added.

“These factors will continue to help the GCC airlines to grow and the airports thus will need to expand to handle greater passenger and freight traffic,’ he concluded.

In the next 20 years, the UAE’s aviation sector is expected to stand next to that of the US and China, according to Jeff Johnson, vice-president of Boeing International and president of Boeing Middle East.

UAE would need more than 55,000 pilots and 62,000 technicians in the same period as a result of its growing aviation industry. Looking at the Middle East, 3,000 aeroplanes are set for delivery in the next 20 years – triple the current capacity.

According to International Air Transport Association (Iata), the Middle East’s aviation market is forecast to grow five per cent annually until 2036. Predictions show the sector will witness an extra 322 million passengers a year.




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