This is a best prospect industry sector for this country. Includes a market overview and trade data.
Last Published: 4/23/2018

Overview

The Aviation sector makes a contribution of $80 billion to U.A.E.’s economy, approximately 15 percent of the country’s GDP. The sector employs over 250,000 direct hires and supports approximately 225,000 indirect jobs. Major U.A.E. carriers include Emirates Airline (since 1985), Etihad Airways (since 2004), Air Arabia (since 2003), and flydubai (since 2009).  Emirates and Etihad are full service carriers (FSCs), while the other two are low-cost carriers (LCCs). Emirates Airline is Dubai-based while Etihad Airways is based in Abu Dhabi.

On the commercial aviation front, the country has seven international airports, including the new Dubai World Central (DWC) which when fully operational will be the largest airport in the world. Also, Abu Dhabi is expanding its airport with a state of the art Midfield Terminal which is due to open in July of 2019 and the overall airport capacity is then expected to reach 30 million passengers. In terms of fleets, Emirates Airlines is the largest operator of the super jumbo Airbus 380, and the Boeing 777. Etihad holds the largest order of the 787 Dream Liners.

U.A.E. 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 the International Air Transport Association (IATA),  U.A.E. airports will see 6.3 percent passenger growth in 2017, despite sluggish global growth, Brexit, and other political instabilities. The region also reported the strongest annual traffic growth of any region globally for the fifth consecutive year in 2016, and the demand for air transport continues to grow significantly in 2017 despite recent electronics bans enforced by the U.S. and U.K. (now lifted).  Finally, the U.A.E. currently commands 25 percent of the private jet business.

The strong growth in air freight volume (Abu Dhabi – 5.6 percent and Dubai 3.3 percent) are also indicative of the U.A.E.’s growing importance in global freight hub and logistics. The two major airports in Dubai and Abu Dhabi are continually investing in development to meet industry expectations. 

Local Manufacturing

Mubadala, a strategic investment company owned by the Abu Dhabi Government, 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), Boeing, Finmeccanica/Alenia Aeronautica, SABCA and FACC.

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 Companies
AMMROC
Dubai Aerospace Enterprise
Emirates Engineering
ExecuJet

Abu Dhabi Airports

The aviation industry is an important pillar supporting the objectives of 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.

In 2016, Abu Dhabi International (AUH) registered more than 24 million passengers passing through its terminals, a 5.1 percent increase over 2015. India remained in top position, with more than four million passengers throughout 2016, representing a market share of 18.1 percent and an annual growth of 13.3 percent.  There were also significant rises in traffic to and from a number of other destinations including the United Kingdom, which increased by 11.4 percent. Abu Dhabi carrier Etihad Airways accounted for 76 percent of the airport’s traffic, or more than 18.6 million passengers in 2016.

Abu Dhabi Airport Authorities continue on introduce  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.

Dubai Airports

Dubai is already the world's busiest international airport and there' is no sign of it relinquishing the position. With more than 83.6 million passengers traveling through Dubai International Airport in 2016 (5.6 million passengers or 7 percent more than previous year),  it is way ahead of its closest rival, London's Heathrow Airport, which saw passenger traffic of 75.7 million (growth of just 1 percent).

Dubai averaged 209 passengers per flight, the highest globally and it’s home carriers.  Emirates and flydubai added more planes to their fleet, expanded their list of destinations, and increased the frequency of flights to existing destinations in order to meet increased passenger demand.  India is the largest single destination served by Dubai, followed by Saudi Arabia and the U.K.

In 2017, Dubai International Airport is expecting 89 million passengers and with the city's second airport, Dubai World Central, coming on line, it is projected that the two airports combined will boast a capacity of 120 million passengers by 2025.  By 2030, Dubai's aviation sector will support more than one million jobs and make up more than 40 percent of the emirate's gross domestic product.

Sharjah Airports

Sharjah Airports also registered growth of passenger traffic in 2016. It handled 11 million passengers, a 10 percent increase over 2015. Aircraft movements to and from Sharjah Airport also saw an increase from 71,426 movements in 2015 to 75,900 movements in 2016. The projection is that Sharjah Airports goal is to serve 25 million passengers by the year 2025.  The emirate’s own airlines, Air Arabia currently operates a fleet of 46 Airbus A320 aircraft offering flights to over 120 destinations in 33 countries from 5 hubs across Middle East, Africa, Asia and Europe.
U.A.E. SPACE PROGRAM

The U.A.E. is committed to establishing itself as a regional hub for civil and commercial space activities, having created the U.A.E. Space Agency (UAESA) in 2014, headquartered in Abu Dhabi, and the Mohammed bin Rashid Space Centre (MBRSC) in 2015 in Dubai.  There is currently an initiative underway by the UAESA and the MBRSC to build an unmanned probe spacecraft that will orbit Mars and study its climate and atmosphere. The intent is to launch this spacecraft in 2020, and have it arrive in Mars orbit by 2021 in time to mark the 50th anniversary of the U.A.E. federation.

The UAESA – which directs U.A.E. national space programs, creates space policy and regulation, and supports the development of U.A.E. engineers and scientists – is expected to generate significant benefits to the country’s economy and human capital. In October 2014, the agency gained membership in the International Space Exploration Coordination Group, making the U.A.E. the first Arab country to join. It also signed collaboration agreements with NASA, Japan, and China, and memoranda of understanding with the U.K., Italy, and Russia.
The Mohammed bin Rashid Space Centre (MBRSC) was founded by Sheikh Mohammed bin Rashid, Vice President of the UAE and Ruler of Dubai, in 2015 when it was integrated with the existing Emirates Institution for Advanced Science & Technology (EIAST). According to the editor of Space Alert, Dr. Rajeswari Pillai Rajagopalan, in addition to the Mars Mission, the center is focused on building remote-sensing satellites with the objective of creating a fully autonomous and indigenous capability to design and manufacture satellites in the U.A.E. The center has scientific laboratories and research facilities based in Dubai.

In March 2016, the UAESA and MBRSC announced that they would use a Mitsubishi Heavy Industries rocket for the Mars mission.  Mitsubishi will launch the U.A.E.’s unmanned probe “Hope” into orbit from the Tanegashima Space Centre in July 2020.  The Japanese company was chosen from 10 possible launch service providers across the globe.

Abu Dhabi-based Khalifa University opened its new Spacecraft Platform for Astronautic and Celestial Emulation (SPACE) laboratory in 2015.  The SPACE lab is equipped with special Unmanned Aerial Vehicles (UAV’s), robots and sensing systems that help to mimic actual conditions in space. The lab provides students with an opportunity to conduct mission-oriented research, and get hands on experience in conducting experiments for sensing, guidance, dynamics, and control of aerospace and space operations in a suitable environment. 

In May 2015, the UAESA announced its plans to open the Middle East’s first space research center in Al Ain. The $27 million center – funded by the university and the Telecommunications Regulatory Authority (represented by the ICT Fund) – will be incubator for development and innovation at the federal level.  UAESA will also coordinate with a number of organizations on the project, including the Emirates Mobile Observatory. The center will serve university students as well as space operators, and will be open to people from outside the university as well. According to the U.A.E. newspaper “Gulf News”, the center will serve as the main headquarters to support U.A.E.’s unmanned Hope Probe for the 2020 Mars mission.  One of the goals for the center is to attract and produce homegrown Emirati men and women space scientists.  It is expected that the new facility will create an estimated 150 jobs for Emirati scientists and engineers who will be needed to work on the Mars mission.

Satellites

The U.A.E. has already launched and is controlling a number of satellites. 

Yahsat, a subsidiary of the U.A.E. government-owned Mubadala Development, offers a range of communication services including voice, internet and television. Yahsat currently has two satellites in orbit and will launch a third in 2016, the Al Yah 3 satellite.  Al Yah 3 will extend Yahsat’s broadband services to 19 countries across Brazil and Africa.

The MBRSC operates several satellites:
DubaiSat-1 was the first fully U.A.E.-owned satellite. It was launched in 2009 by EIAST, which, as noted above, was rolled into MBRSC in 2015. 
DubaiSat-2 blasted off in 2013.
KhalifaSat, expected to enter orbit in 2018, is the U.A.E.’s most technologically advanced imaging satellite, will be 100 percent developed by Emirati engineers as part of the MBRSC’s strategic initiative to inspire innovation and technological advancement, and to increase sustainable development in the U.A.E.
U.A.E.’s Thuraya, private company with investors from the U.S., U.K., and the Middle East, launched its first mobile telecommunication satellite, Thuraya-1, in 2000.

2016 NASA and UAESA Framework Agreement

In June 2016, NASA and UAESA signed a framework agreement to cooperate on aeronautics research and the exploration and use of airspace and outer space for peaceful purposes. The scope of the agreement covers space science, operational Earth observation and Earth science, aeronautics, space operations and exploration, education, technology, and safety and mission assurance. 

Under the framework, the agencies also signed an Implementing Arrangement to formalize cooperation in the exploration of Mars. The arrangement establishes a joint steering group to guide discussions about potential future projects that contribute to the exploration of Mars.

Additionally, the two agencies plan to collaborate on education and public outreach programs and joint workshops, with the goal of facilitating the exchange of scientific data, scientists, engineers, and views and experiences on relevant regulatory frameworks and standards.

Future areas of collaboration could include the joint use of aircraft; scientific instruments aboard spacecraft; ground-based research facilities; spacecraft and space research platforms; and ground-based antennas for tracking, telemetry, and data acquisition.

Other Partnerships

Sir Richard Branson has been in partnership with Abu Dhabi investors since 2009, when Aabar Investments, the Abu Dhabi government-backed investment company, took a stake in Virgin Galactic, his space venture. According Branson, Aabar has a 35 percent stake in the business, valued at about $300 million. In 2014, Branson and Abu Dhabi investors had initiated discussions regarding the possible opening of a spaceport in Abu Dhabi; however, there have been no announcements to date. 

According to the U.A.E. newspaper The National, the UAESA and Boeing have partnered on an initiative called “The National Space Programme”.  The program features two competitions:  Genes in Space, in which students from across the U.A.E. will compete for the opportunity to have their experiments launched into space and conducted by scientists on board the International Space Station; and the Satellite Launch project.

Leading Sub-Sectors

Ground Services – Ground Handling, Catering and FBOs: 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 U.A.E. 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 U.A.E. 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 ServicesWhile the airports in the U.A.E. 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 & 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 U.A.E. 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.

Opportunities

In addition to the aforementioned best prospect sectors, the U.A.E. is undertaking many initiatives to control the emissions of the aviation sector and reduce its environmental impact. The aviation regulatory authorities of the U.A.E. 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. Others areas of opportunity for foreign companies include infrastructure planning and airspace management.

Web resources

Abu Dhabi Airports Company 
Air Arabia Airline 
Dubai Airports Company
Dubai South Free Zone
Emirates Airlines
Etihad Airways
flydubai
General Civil Aviation Authority
Mubadala
Nibras Al Ain Aerospace Park
Strata
Turbine Services & Solutions
U.A.E. Space Agency

Trade Shows

Abu Dhabi Air Expo
Airport Show Middle East, Dubai
Aircraft Interiors Middle East, Dubai
Dubai Air Show
Dubai Helishow, Dubai
Global Aerospace Summit, Abu Dhabi
Interiors Middle East, Dubai
MEBA, Dubai
MRO Middle East, Dubai

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United Arab Emirates Aerospace and Defense Trade Development and Promotion