Aviation to contribute over $53bn to Dubai’s economy

In 2013, Dubai International Airport had direct passenger flight connections to some 149 cities with populations of over 1mn people, creating potential export markets of over 916mn people, or 13% of the world’s population

Sheikh Ahmed: Committed to taking a consensus-based approach to infrastructure investment.

By Pratap John

Chief Business Reporter

The overall economic impact of both aviation and tourism-related activities in Dubai will rise to a robust $53.1bn in 2020, a new report has shown.

This will be equivalent to 37.5% of Dubai’s GDP, supporting over 754,500 Dubai-based jobs, Oxford Economics said in a recent report. The estimate has been based on industry growth forecasts and modelling projections on current expansion plans for Dubai International (DXB) and Al Maktoum International at Dubai World Central (DWC), the research firm said in its report entitled “Quantifying the economic impact of aviation in Dubai”.

Emirates Airline, Dubai Airports and the aviation sector as a whole contributed $26.7bn to the Dubai economy in 2013, which was almost 27% of Dubai’s GDP and supported a total of 416,500 jobs accounting for 21% of the emirates’ total employment.

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 $16.5bn gross value added (GVA) in 2013. This includes direct, indirect and induced contributions and is equal to 16.5% of Dubai’s GDP, supporting in excess of 259,000 Dubai-based jobs.

Moreover, for every $100 of activity in the aviation sector, a further $72 is added to 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.

Aviation, the report said 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 $10.2bn GVA supporting a further 157,100 jobs.

In 2013, Dubai welcomed nearly 10mn non-UAE visitors who spent $13bn, accounting for around 1% 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% 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 (or 81% of world cities) with populations of over 10mn people. Overall, Dubai had direct passenger flight connections to 149 cities with populations of over 1mn people, creating potential export markets of over 916mn people, or 13% of the world’s population. Cargo tonnage between 1990 and 2013 handled in Dubai has grown on average of 13.5% a year, compared to global average trade volumes of 5.6% 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.

Between 2014 and 2020, the contribution of the aviation sector to Dubai’s economy is expected to grow at a faster rate than the economy as a whole, on the back of strong growth in international passenger traffic and cargo. The sector’s airline and airport capacity continues to expand to accommodate for growing demand.

By 2020, it is estimated that Emirates will fly 70mn 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

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 said, “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.”