A whole new GDP: Dubai's aviation sector stands at $26.7 billion

Published November 17th, 2014 - 09:47 GMT

Emirates airline, Dubai Airports and the aviation sector as a whole contributed $26.7 billion to the economy of Dubai in 2013, which was almost 27 per cent of the UAE emirate's gross domestic product (GDP).

The sector supported a total of 416,500 jobs, accounting for 21 per cent of Dubai's total employment.

These figures were released by global research firm Oxford Economics in its latest report “Quantifying the Economic Impact of Aviation in Dubai”, conducted as a follow-up to a 2011 study done by the same firm.

The objective of the report was to quantify the economic impact of the aviation sector and its subsequent Dubai-based supply chain. In addition, the report explains the benefits that the aviation sector brought to Dubai’s economy in 2013 in terms of gross value added (GVA) and employment, and provides forecasts for the sector and its knock-on effects in 2020 and 2030.

The report re-affirms aviation’s growing significance as a major engine of economic development, and its far-reaching contributions to other industries as a catalyst for a spectrum of economic activity.

“Dubai’s success stems from a clear vision, careful planning, and collaborative execution. It is no accident that we are a global aviation hub today. It has taken us years to build up the critical competencies and infrastructure that we have today, and we now have a solid base on which to further develop," said Sheikh Ahmed Bin Saeed Al Maktoum, chairman and chief executive of Emirates Airline and Group, chairman of Dubai Airports and president of the Dubai Civil Aviation Authority.

"We will continue to take a consensus-based approach to infrastructure investment, embrace open competition, and focus on opening up and connecting markets through efficient operations. At the end, we want Dubai to be the top choice for international travellers and traders – as a destination, and as a transport hub,” he said.
Core impact of aviation

The report estimated that the aviation sector, including the Emirates Group, Dubai Airports, and other aviation businesses such as airlines flying into Dubai, regulatory authorities and Dubai Duty Free, had a core impact of $16.5 billion GVA in 2013. This includes direct, indirect and induced contributions and is equal to 16.5 per cent of Dubai’s GDP, supporting over 259,000 Dubai-based jobs.

Moreover, for every $100 of activity in the aviation sector, a further $72 is added in other sectors of the local economy from supply chain connections and expenditures. For every 100 jobs created in aviation, an additional 116 jobs are created elsewhere in Dubai, it said.

Tourism benefits

Aviation has proved to be an indispensable catalyst for the growth Dubai’s tourism industry. Tourism and travel activities in 2013 had an economic impact of $10.2 billion GVA, supporting a further 157,100 jobs. In 2013, Dubai welcomed nearly 10 million non-UAE visitors who spent $13 billion, accounting for around 1 per cent of foreign visitor spend globally that year.

The success of Dubai as a destination has been a public and private effort to invest in world-class aviation and tourism infrastructure to support the influx of visitors. The results have paid dividends and Dubai currently captures a 0.4 per cent share of the world’s business and tourism traffic, double the share it had in 2000.

One of Dubai’s greatest assets is its enhanced connectivity. In 2013, Oxford estimated that passengers could connect from Dubai to 25 cities with a population of over 10 million people. Overall, Dubai had direct passenger flight connections to 149 cities with a population of over 1 million people, creating potential export markets of over 916 million people, or 13 per cent of the world’s population.

Cargo tonnage between 1990-2013 handled in Dubai grewn on average of 13.5 per cent per year, compared to global average trade volumes of 5.6 per cent per year.

The passenger and cargo connectivity provided from Dubai has positively impacted Foreign Direct Investment (FDI) and trade. It also has provided greater access to foreign markets, encouraging exports, and increasing competition in the local economy, benefiting consumers.

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