UAE: Aviation Sector Set to Skyrocket in 2020

Published December 24th, 2019 - 07:42 GMT
UAE: Aviation Sector Set to Skyrocket in 2020
Nation has been investing in advancing its aviation sector in terms of using the latest technologies. (Shutterstock)

Propelled by breakthrough airport technologies and fast-growing international carriers, the UAE's air travel sector is poised to undergo a sea change over the coming decade as the sector, a key contributor to the nation's economy, stays on track to attract increased international traffic through its gateway airports while reinforcing it position as the nerve-centre of the Middle East and North Africa region's vibrant aviation industry.

Notwithstanding the headwinds posed by cyclical slowdowns across the globe and within the region, UAE's national carriers - Emirates, Etihad Airways, Air Arabia, flydubai and the new-born low-cost carrier Air Arabia Abu Dhabi, Wizz Air Abu Dhabi and a Ras Al Khaimah-based airline to be launched by SpiceJet - have set their sights on turbo-charging the expansion of their global connectivity, frequencies and capacity over the coming years to cope with the exponential growth of tourism and commerce the UAE - a favoured global hub for investors, conferences, mega entertainment and trade events and a destination for fine living - is undergoing.

Adding a new dynamism to the bullish growth outlook is the ongoing Dh85 billion investment by various emirates on developing and upgrading aviation and tourism infrastructure.

Aviation experts are equally upbeat about the long-term outlook as the UAE has been investing in advancing its aviation sector in terms of using the latest technologies, research and development while seeking to forge agreements with local and global partners and increase trade and investment opportunities in the aviation industry.

The International Air Transport Association (Iata) in a studied projection said the UAE's aviation sector would grow 170 per cent, support 1.4 million jobs and contribute $128 billion to the nation's economy by 2037.

In its latest study on the importance of air transport to the UAE, the Montreal-based organisation said the domestic aviation industry at present supports nearly 800,000 jobs and contributes $47.4 billion to the economy, accounting for 13.3 per cent of the UAE's GDP.

Jawaher Al Mheiri, an Abu Dhabi-based economist, said the UAE aviation sector has evolved into a major contributor to the country's GDP. In 2018, the sector contributed 15 per cent to the country's GDP and has become over the years, a significant player in bolstering the country's position as an international hub for business and tourism.

"The past 10 years were marked by key milestones for the UAE aviation in terms of fast expansion of airlines' network, fleet, crew and infrastructure, as well as the presence in the international markets," said Al Mheiri.

In comparison to the regional outlook, aviation experts are more optimistic about the UAE growth, and believe it would far outstrip the regional growth rate, which is projected to be 5.1 per cent annual traffic growth and a requirement of 3,130 new aircraft over the next two decades. For the UAE, the forecast is for an annual traffic surge of 5.8 per cent and a potential deployment of a total 1,739 aircraft in the next 20 years, up from the current size of 630 aircraft.

According to the Iata, given the ongoing prioritisation of aviation by the UAE government as a key strategic asset, the sector could generate an additional 620,000 jobs and an extra $80 billion in GDP for the nation's economy by 2037, the trade body of 290 airlines across the world said.

"Today the UAE is ranked No.1 globally for air trade facilitation, tops the Middle East region for visa openness, is an aviation powerhouse and its airlines carry the country's flag to all corners of the globe," said Muhammad Ali Albakri, the Iata's regional vice-president for the Middle East.

"To maintain the country's competitiveness as a leading global aviation hub, sufficient air space capacity to meet demand, infrastructure investments aligned to growth and rapid implementation of new technology are essential," said Albakri.

Over the past 25 years, the UAE has experienced an economic transformation and aviation has been at the heart of this evolution. Few states have a better understanding of the economic benefits that aviation's connectivity provides than the UAE. Government policy supporting the development of aviation has paid great dividends, analysts said. 

Futuristic technologies

Airports in the UAE have been in the forefront of embracing futuristic technologies.

As Sita, an IT provider for the air transport industry, has predicted, the next decade will witness an exponentially accelerated pace of change as digital native passengers and staff usher in futuristic technologies, from flying taxis to airports that think for themselves.

Most of these innovative technologies are already in place at Dubai and Abu Dhabi airports. Over the past 10 years, as Sita has pointed out, airport experience has morphed dramatically with the introduction of biometric security, mobile check-in and baggage tracking. And there is much more to come.

At the Dubai International Airport - the world's busiest for international travel - some of these transformative technologies have already become operational. In October, Dubai Airport rolled out a new 'smart tunnel' that uses biometric technology instead of human checks to allow some air travellers to go through passport control in just 15 seconds. Passengers register at a kiosk before going through smart gates which uses iris recognition to let them through. For now, only business and first class passengers can use the system.

Maj-Gen Mohammed Ahmed Al Marri, director-general at the General Directorate of Residency and Foreign Affairs, called it the "latest and most unique technology" and says the project has been in development for four years.

Very soon, passengers can expect more game-changing facilities including integrated security at UAE airports for a frictionless journey. Going through security will mean walking along a corridor. No more taking off your coat, shoes, and belt, or putting little bottles into little bags. And no more queues. Passengers and their bags will be recognised automatically as they go through automated checkpoints. Hard checkpoints will be replaced by sensor corridors, making physical document checks obsolete.

Another factor that makes Dubai Airport stand apart is its phenomenal traffic growth over the past several decades in a row,

Saj Ahmad, chief analyst at StrategicAero Research, said at the end of 2008, Dubai International Airport handled just over 37.4 million passengers. A decade on, the airport handled 89.1 million passengers - more than doubling its traffic in just 10 years.

"Aside from the hectic modernisation drive of Dubai as world class travel and business destination with some of the world's best iconic retail hubs, hotels, leisure, countless touristic attractions and residential communities, Emirates airline has been a vital factor in propelling Dubai International Airport to the top slot of the world's busiest international airport over the past decade," said Ahmad.

Dubai International, which retains its position as world's No.1 international airport for the past several years in a row, now serves 70 airlines flying to more than 220 airports in 214 cities across 94 countries.

According to projections, with the ongoing construction at Dubai International expected to be completed in 2023, the additional aeronautical and non-aeronautical revenue generated by the higher traffic flows will be used to fund further airport development at Dubai World Central. Construction of Phase 2 of Dubai World Central (DWC) will escalate during this period with the initial iteration allowing for 80 million passengers per year to facilitate the eventual relocation of the Emirates hub.

DWC will feature a modular design that can be expanded incrementally to accommodate growth for both Emirates and other airlines. Once fully completed, DWC will be the world's largest airport with five runways and capacity for 160 million passengers and 12 million tonnes of cargo annually.

At present, the various airport investments under way include Dh30 billion in developing Al Maktoum International Airport, Dh28 billion expansion of phase four of Dubai International Airport and Dh25 billion for the development and expansion of Abu Dhabi International Airport. In addition, Sharjah International Airport is also undergoing a Dh1.5 billion investment in expansion of its terminal.

Iata in a recent study has identified three areas where government action can promote aviation's growth and bring even more value to the UAE. These include increasing airspace capacity to ease congestion and meet future demand; aligning infrastructure investments with expected growth; and continuing to leverage new technology and process innovation to enhance efficiency and passenger experience.

The study argued that fast adoption of new technology and initiatives to integrate aviation with future modes of transportation would enhance the competitiveness of the UAE as an aviation hub.

A major highlight for the aviation sector in 2019 is the unveiling of Air Arabia Abu Dhabi.

"Air Arabia has leveraged the strength of its low-cost base to spur the growth of the budget travel segment when it recently announced partnership with Etihad to create Air Arabia Abu Dhabi. The new venture will facilitate for the first time low cost market access for travellers out of the UAE's capital city. The landscape changed again when Wizz Air announced it too was setting up home in the UAE capital with Wizz Air Abu Dhabi. The spoils for customers are immense. Not only will Abu Dhabi have gone from having no LCC presence to having to new operators in quick succession, it negates the need for passengers to go out to Dubai or even Sharjah to access cheap flights," said Ahmad.

"Dubai is primed to expand its LCC market share thanks to the expanded flydubai-Emirates partnership," he said.

Flydubai will be able to harness its explosive growth once the 737 MAX is recertified early next year and the airline can start to expand its footprint by opening up new city pairs and adding frequencies to its existing network that have today had to be curtailed due to the MAX grounding, leaving the airline short on capacity.

The fundamental benefit for flydubai, is that once Boeing gets the green light to re-deliver 737 MAXs, there are already a number of built airplanes for the airline to take delivery of and integrate straightaway into its schedules so that it can employ the fuel efficient benefits of the MAX and get its nose in front of rivals like Air Arabia, which will not be receiving its first A320neo's until mid-2024.

Ahmad said Dubai International remains the core global nexus point for travellers the world over. "Though growth has been tempered this year due to resurfacing runway works and the impact of the MAX, the airport is still investing in facilities and technologies to further enhance its appeal to airlines and customers alike. Dubai International will continue to top the charts and provide a degree of added pressure on the Dubai Government to push forward its planned development of Dubai World Central," he said.

Copyright © 2022 Khaleej Times. All Rights Reserved.

You may also like