Dubai aviation to be worth $44bn by 2020, says Oxford Economics
Dubai's aviation industry is set to double in value in less than a decade, a new report says.
The sector, led by the fast-growing Emirates Airline and Dubai Airports Company, already supports more than 250,000 jobs and contributes more than US$22 billion (Dh80.74bn) to the local economy, according to Oxford Economics, which says the industry will be worth $44.5bn by 2020.
A policy of liberal, open competition, Dubai's favourable global location, plus a strategy to link underserved markets with efficient operations all contributed to the industry's success, according to Oxford Economics, a global research company based in the UK.
"Dubai's success is not evidence of unfair competition or government support but the result of an effective aviation model," said the report, which was commissioned by Emirates and Dubai Airports.
While the emirate diversified into banking and property in recent years, its travel, trade and logistics sector has underpinned the economy for decades.
Oxford Economics said aviation contributed 28 per cent of Dubai's GDP.
Underscoring the importance of transport to Dubai, officials from the Jebel Ali Free Zone, which is connected to the region's largest port, have previously estimated the zone makes up an additional 26 per cent of Dubai GDP.
With Emirates adding new aircraft and Dubai Airports planning new airport capacity, the emirate's growth would continue, Oxford forecast.
It said aviation would contribute 32 per cent of Dubai's GDP by 2020 and sustain 372,900 jobs - that represents about 22 per cent of Dubai employment.
Due to Dubai's "open skies" policy, which allows any airline to open service to the emirate, there are 130 other carriers that operate to and from the airport, which is the world's fourth-largest measured by international traffic.
Simon Williams, the chief economist at HSBC in Dubai, said the city's efficient air links "add to Dubai's ability to draw investment and be regarded as a leading international city. Aviation is a key part of what makes Dubai function the way it does", he said.
The air travel industry represents about 19 per cent of total employment in Dubai. In addition, spending from foreign visitors, who overwhelmingly arrive by air, supports nearly 134,000 jobs and contributes an additional $7.9bn to Dubai's GDP.
In the five years from 2005, international passenger numbers at Dubai International Airport have almost doubled from 24.8 million to 47.2 million. Emirates' passenger numbers have increased sixfold in the past 10 years.
Emirates is one of the most profitable airlines in the world and now flies to 111 destinations in 66 countries. Last month, it reported a net profit of $1.5bn for the fiscal year ending in March. With 153 wide-bodied jets, it has orders for an additional 200 aircraft worth more than $66bn, leading Dubai Airports to build Al Maktoum International Airport, which is expected to be the world's largest airport when fully complete.