United Arab Emirates

This is a best prospect industry sector for this country. Includes a market overview and trade data.

Last published date: 2019-10-13

The UAE Aviation sector, a vital contributor to the country’s growth, is expanding to increase passenger traffic.  The sector has made remarkable progress over the past few years, both in terms of the total number of flights taking off or landing every day at UAE airports, and the number of passengers. 

The sector currently contributes approximately 15 percent to the UAE’s overall GDP.  That is expected to reach 20 percent of the economy by 2020 providing up to 750,000 jobs.  With continued expansion in various markets and global connectivity, frequencies and capacity with the backing of heavy investments in expansion and upgradation of airports and allied tourism infrastructure, UAE Aviation aims to top the airline service quality index. 

The four major UAE carriers, Dubai-based, Emirates Airline (full service carrier since 1985) and flydubai (low-cost carrier since 2009), Abu Dhabi-based Etihad Airways (full service carrier since 2004), and Sharjah-based Air Arabia (low-cost carrier since 2003), are expanding their operations and spending money in anticipation of increased passenger demand globally and higher traffic domestically for Expo 2020.  On the commercial aviation front, the country has seven international airports, including the Al Maktoum International Airport in Dubai South and state-of-the-art Midfield Terminal in Abu Dhabi which is due to open toward the end of 2019. 

Airports in the UAE continue to leverage new technologies to enhance the passenger experience and preference as a gateway and destination for their travel plan.  To that end, the UAE government is investing over $23 billion in various airport development and expansion projects such as $8.17 billion in Al Maktoum International Airport, $7.6 billion for the Dubai International Airport expansion Phase 4, $6.8 billion for Abu Dhabi Airports development and expansion plans, and around $400 million in Sharjah’s International Airport Terminal Building expansion. 
In terms of fleets, Emirates Airlines is the largest operator of the super jumbo Airbus 380 as well as the Boeing 777, with a fleet of approximately 254 aircraft.  Etihad Airways has 113 aircraft, while the fleet size of Air Arabia and flydubai are 53 and 64, respectively. 

UAE airlines continue to lead in the region as demand for air transport keeps rising and the sector sees significant growth in terms of expansion and modernization.  According to major airlines, demand for aircraft will keep rising in the region and demand for wide-body aircraft, currently dominated by Emirates will account for over 50 percent of demand. In addition, the strong growth in air freight volume (Abu Dhabi – 5.6 percent and Dubai 3.3 percent) are also indicative of the UAE’s growing importance in global freight and logistics hub.
Local Manufacturing 
Mubadala Aerospace, owned by the Abu Dhabi government through the $225 billion Mubadala Investment Company, its parent firm, oversees development of maintenance facilities for civilian and commercial aircraft, flight training, high-technology manufacturing of aircraft parts, and research and development work. Mubadala and Boeing have a $2.5 billion agreement for supply of advanced composites and machine metals to be used in the new Boeing 787 Dreamliner and the 777X. 

Strata Manufacturing, located in Nibras Al Ain Aerospace Park, is wholly owned by Mubadala. The company was formed to forge partnerships with aircraft OEMs and incorporating leading-edge technology and best practice manufacturing.  It has already formed partnerships with major aircraft manufacturers, such as EADS/Airbus (Tier 1 supplier), Finmeccanica/Alenia Aeronautica, SABCA and FACC.  Strata is also now a Tier 1 supplier to Boeing on major components used in empennage production. 

Nibras Al Ain Aerospace Park, created jointly by Mubadala Aerospace and Abu Dhabi Airport Company (ADAC), is a mix of public and private investment projects created as a dedicated aerospace and aviation cluster.  The Park spans 25 km² and consists of projects, business, office facilities and mixed-use residential zones, majority of which are allocated specifically to aerospace industry.

Turbine Services & Solution Aerospace (TS&S), a wholly-owned subsidiary of Mubadala, provides maintenance, repair and overhaul services for various aircraft engines such as Airbus A300, A320, A330; Boeing 747 and 787 and other light aircrafts through technical support and partnership with OEMs – GE, Rolls Royce, Siemens, and IAE. 

Other Local Companies:
Atlas Aerospace
Dubai Aerospace Enterprise
Emirates Engineering

Abu Dhabi Airports
Abu Dhabi Airports is focusing on increasing passenger traffic and visitors to the UAE, as part of the emirate's wider plan to boost tourism.  It is targeting an additional 1.4 million passengers by 2021 to complement its current 7.7 million passengers.  The aviation industry is also an important pillar supporting the objectives of economic diversification outlines in Abu Dhabi Plan 2030.  The development of the industry is being led by Etihad Airways (focusing on expanding its operations) and Abu Dhabi Airports Company (ADAC) providing necessary support for airport infrastructure. 

Abu Dhabi Airport Authorities continue introducing innovative technologies.  The airport’s smart travel system consists of self-check-in and baggage drop facilities, automated passport control gates equipped with biometric verification functions and facial recognition technology, and smart boarding gates, allowing passengers to check-in and move through immigration and security at ease.  Abu Dhabi has also become the first airport in the region to be awarded ISO 22301. 

Abu Dhabi’s anticipated new 742,000 square meters Midfield Terminal Building (MTB) is currently being testing for operational readiness.  The new facility, located between the airport’s two runways, will have a capacity of 45 million passengers annually when completed.  In addition, 8 million square meters are dedicated to aviation district space, located at Al Falah, and is also being developed for lease next to the Midfield Terminal Building. 

Dubai Airports 
Dubai has two airports – The Dubai International Airport and Al Maktoum International Airport. 
The Dubai International Airport is the world's busiest international airport since 2014 and there is no sign of it relinquishing the position. An estimated 89.1 million passengers traveled through Dubai International Airport in 2018 (1 percent more than in 2017), ahead of its closest rival, London's Heathrow Airport, which saw passenger traffic of 80 million (growth of 2.7 percent). 
There were 408,251 scheduled and unscheduled flights in 2018, and the average number of passengers grew by 1.3 percent to 226 people per plane.  The number of Chinese visitors grew 6 percent to 3.5 million in 2018 and Russian travelers grew 14.5 percent to 1.5 million.  India continued to be the largest source market country with 12.2 million travelers using the hub, followed by Saudi Arabia and the UK. 

Located 25 miles from Dubai International Airport, Al Maktoum International Airport is Dubai’s second airport and is currently served by 10 passenger carriers, operating an average of 21 flights weekly to seven international destinations and 20 cargo operators from/to 45 destinations around the world.   The airport construction is part of the Dubai World Central project (DWC).  It is Dubai Government’s single largest urban land development project at an estimated cost of $33 billion.  The mega project includes the Al Maktoum International Airport, Dubai Logistics City (DLC), DWC Commercial City, DWC Residential City, DWC Aviation City and DWC Golf City.  When completed, DWC is set to become the world’s largest airport with an annual capacity of over 160 million passengers and 12 million tons of cargo.

Sharjah Airports 
Owned by the Sharjah Airport Authority, Sharjah International Airport (SIA) serves Sharjah and other Northern Emirates since 1977.  It is located ten kilometers from Sharjah City Centre and 15 km away from Dubai.  The airport, which includes a 4,000 m Category III runway, currently serves as the hub for Air Arabia, Sharjah’s low-cost carrier.  In 2018, SIA reported a 6 percent increase in passenger numbers to 12.04 million compared to 11.36 million the previous year. The number of flights too increased by 4.7 percent to 81,260 in 2018. 

SIA is also the second busiest freight handling airport in the Middle East, after Dubai International Airport.  The airport has a cargo handling capacity of 500,000 tons of cargo per year.  Since 1995, the airport also integrates a free zone - The Sharjah Airport International Free (SAIF) Zone, now a major business hub with over 5,500 companies registered.

Leading Sub-Sectors
Ground Services – Ground Handling, Catering and Fixed Based Operations (FBO):  Local airport authorities have shown interest and have partnered with companies to bring the latest technological innovations for passenger attraction and satisfaction, including duty free services, hospitality, ground handling, catering and Fixed Based Operations (FBO).  The current business aviation landscape indicates that new catering and FBO facilities needs to be developed for expanding their ground handling and catering. 

Maintenance, Repair & Overhaul (MRO):  Emirates and Etihad have in-house MRO capabilities but that will need to grow in line with increased fleet size.  Consequently, investments and partnership by outside companies will be required to cater to increased need for MRO services, especially heavy ones.  The components segment is particularly of interest because major airlines in the UAE generally ship components around the world for repair and so if produced locally, significant savings in terms of cost and time could be achieved, making things faster and more competitive.  According to sector specialists, the MRO market in the UAE is set to grow to $8.8 billion by 2023, representing an average growth of 7.5 percent.  The majority of that is predicted to come from engines, components and maintenance.

Infrastructure Development and Aircraft Hangar Services:  While the UAE’s airports are undergoing infrastructure development to accommodate increased fleets, and airport expansion is taking place to grow capacity, there will be demand for airport hangar services and airport infrastructural development. 

Aircraft Recycling/Decommissioning:  The region is currently underserved with regards to decommissioning and recycling of aircraft body parts, frames and engines.  According to sector specialists, approximately 12,000 aircraft globally are to retire within the next two decades, means that this category would fetch lucrative margin through recycling of airframes and parts
Training and Development:  The Middle East region is short of suitable skilled manpower.  In order to keep up with the growing need across the aviation system value chain with regards to supply of pilots, crew, technical, mechanical and operational manpower, there is a need for both academic and practical training centers and flight simulators.  Based on current orders, it is estimated that the UAE alone would require around 22,000 pilot and crew members by 2033.  To cater to such demand and provide high standard of service, training and development will become critically important.  In addition, in view of high net wealth of citizens in the region and the increased need for mid-size, on-demand flights, technical training facilities will become a major support for the growing for Aero Taxi sector.

In addition to the aforementioned best prospect sectors, the UAE is undertaking many initiatives to control the emissions of the aviation sector and reduce its environmental impact.  The aviation regulatory authorities of the UAE have promulgated policies pertaining to engine emissions thereby imposing challenge for the airline companies operating in the country.  The know-how and technological advantage of the U.S. in the field of fuel emissions and clean energy could help American companies expand in the region.  Other areas of opportunity for foreign companies include 3D printing and certification services, infrastructure planning, and airspace management.

Web Resources
Air Arabia Airline  
Dubai Airports Company
Dubai South Free Zone
Emirates Airlines
Etihad Airways
General Civil Aviation Authority
Nibras Al Ain Aerospace Park
Turbine Services & Solutions
UAE Space Agency

Trade Shows and Exhibitions
Dubai Air Show
Date:  November 17-19, 2019
Venue:  Al Maktoum International Airport DWC, Dubai Airshow Site
Website:  https://www.dubaiairshow.aero/

MRO Middle East
Date:  February 24-26, 2020
Venue:  Dubai, UAE
Website:  https://mromiddleeast.aviationweek.com/en/home.html

Aircraft Interiors Middle East
Date:  February 25-26, 2020
Venue:  Dubai World Trade Centre, Dubai, UAE
Website:  https://www.aime.aero/

Global Aerospace Summit
Date:  March 17-19, 2020
Venue:  Abu Dhabi, UAE
Website:  https://www.aerospacesummit.com/

Abu Dhabi Air Expo
Date:  March 2020
Venue:  Al Bateen Executive Airport, Abu Dhabi, UAE
Website:  http://abudhabiairexpo.com/

Airport Show Middle East
Date:  June 22-24, 2020
Venue:  DICEC Dubai, UAE
Website:  https://www.theairportshow.com/

Dubai Helishow
Date:  November 10-12, 2020
Venue:  Royal Pavilion at E2 Dubai South Event & Exhibition Center, Dubai, UAE
Website:  http://www.dubaihelishow.com/

MEBAA, Dubai
Date:  December 8-10, 2020
Venue:  Al Maktoum International Airport DWC, Dubai Airshow Site
Website:  https://www.mebaa.aero/