Aviation in Dubai to pitch in $88 billion

Dubai: The overall economic impact of both aviation and tourism related activities in Dubai will rise to $53.1 billion in 2020 and hit $88.1 billion by 2030 and will support 1,194,700 jobs, Oxford Economics said on Monday.

The Oxford Economics report re-affirms aviation’s growing significance as a major engine of economic development and its far-reaching contributions to other industries. — AFP

By 2020, as Dubai expects to welcome over 20 million visitors for Expo 2020, it is estimated that Emirates will fly 70 million passengers, and the airline and its partners are already progressing plans for the right infrastructure to be in place to support and capitalise on passenger growth, Oxford Economics said in its latest forecast entitled “Quantifying the Economic Impact of Aviation in Dubai”.

The report was made using industry growth forecasts and modelling projections based on current expansion plans for Dubai International and Al Maktoum International at Dubai World Central.

The report said projects to support the six month mega-event in Dubai are already underway. “This includes a sizeable increase in airport capacity, which encompasses expansion of airspace, airfield, stands and terminal areas to allow Dubai International to accommodate 60 per cent more aircraft stands by 2015, and service 90 million passengers by 2018. By 2020, Dubai International is estimated to receive 126.5 million passengers, almost 30 per cent higher than its original 2010 assessments.”

The report said Emirates airline, Dubai Airports and the aviation sector as a whole contributed $26.7 billion to the Dubai economy in 2013, which was almost 27 per centof Dubai’s gross domestic product, or GDP, and supported a total of 416,500 jobs accounting for 21 per cent of the emirates’ total employment.

The report explains the benefits that aviation brought to Dubai’s economy in 2013 in terms of gross value added, or 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. 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,” said Shaikh Ahmed bin Saeed Al Maktoum, President of the Dubai Civil Aviation Authority, Chairman of Emirates airline, Chief Executive of the Emirates Group and Chairman of Dubai Airports.

Core impact of aviation

It is 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,” said theOxford Economics report.

The report pointed out that aviation has proved to be an indispensable catalyst for the growth of 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 one 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,” it said.

According Oxford Economics, one of Dubai’s greatest assets is its enhanced connectivity. In 2013, Oxford estimated that passengers could connect from Dubai to 25 cities (or 81 per cent of world cities) with populations of over 10 million people. Overall, Dubai had direct passenger flight connections to 149 cities with populations of over one 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 has grown on average of 13.5 per cent per year, compared to global average trade volumes of 5.6 per cent per year.

— issacjohn@khaleejtimes.com