The U.S.-U.A.E. Business Council is pleased to direct your attention to a recent report published by Oxford Economics for Emirates Group which focused on the economic impact of aviation in Dubai. The 37-page document expands on the level of contribution the Emirates Group, Dubai Airports, and the aviation sector had on the whole economy of Dubai in 2013, and the projected impacts in 2020 and 2030. Some key report highlights include:
Analysis of the aviation industry’s impact through three ‘core’ categories: direct (the value of the activity undertaken by businesses which form part of the aviation sector), indirect (additional work carried out by other Dubai-based entities as a result of supply chain), and induced (employee expenditure) in conjunction with the tourism’s economic role in Dubai’s overall aviation industry.
• Aviation played a large role in Dubai’s overall economy in 2013, accounting for 21% of Dubai’s employment and 26.7% of its total GDP. It played a significant role in enhancing other industries such as retail, manufacturing, construction, hotels, catering, and whole sale through supply chains.
• With increased growth in aviation through the construction of Al Maktoum International at the Dubai World Central (DWC) ‘to be completed early 2020,’ growth is expected to increase from 26.7% in 2013 to 44.7% in 2030.
• In addition to the 139,000 jobs created through Dubai Airports and other aviation-related businesses, Emirates Group supports 107,000 jobs through direct, indirect, and induced channels – a combined 259,000 jobs.
o Direct impact of the aviation industry showed a 9.6% contribution to Dubai’s overall economy in 2013, surpassing government services, mining utilities, agriculture, and construction as well as 6.1% of Dubai’s total employment.
o Indirect impacts included $6.3 billion worth of goods and services from Dubai based entities resulting in 76,000 Dubai-based jobs.
o Induced Impacts showed that employee earnings estimate to $4.6 billion which create $2.7 billion in employee expenditure resulting in an average of 63,000 jobs created.
• The total impact that aviation brings to tourism in Dubai is also significant. Incoming travelers have varied expenditures which pump money into the domestic economy. Tourism and business related travel has nearly doubled globally within the last twenty years and is expected to continue growing. In 2013, global spending totaled $1.1 trillion and is expected to grow to $1.6 trillion by 2020. Ten million non-U.A.E. residents visited Dubai in 2013, representing a 230% increase since 2000. Dubai International Airport is one of the top ten busiest airports in the world with 27% of visitors arriving from Europe, 26% from Asia and Africa, and 10% from the Americas. These visitors spent $13 billion in Dubai’s economy.
In order to maintain high levels of growth throughout this period, significant expansion would be required. Dubai’s aviation policy landscape has allowed for a smooth expansive process by creating a consensus-based partnership between government and aviation. The inability to implement proper policies could constrict aviation and related industries beyond 2020, reducing overall impact by a possible 13% by 2030. These results translate to a decrease of 159,600 jobs or 4.7% loss of projected economy wide employment.
Productivity enhancements have occurred due to an increase in direct flights. These enhancements include ease of access to foreign markets by domestic firms, increase in foreign competition in domestic markets, less restriction on the bilateral movement of capital and an increase in Foreign Direct Investment (FDI) outside of the home country. They also establish long term relationships that go beyond tourism. Dubai has direct flights to 81% of all global cities with a population of more than 10 million people and 57% of all global cities with a population between 5-10 million people. This allows exporters in Dubai access to over to over 175 million potential customers. Direct flights from Dubai to all major cities around the world have provided a potential export market of nearly 1 billion people or 13% of the world’s population.
With the rapid expansion of Emirates Airline, and its counterpart Etihad Airways in Abu Dhabi, the U.A.E. will further enhance its credentials as the largest and most efficient regional hub.
For more information, you can find the full ‘Quantifying the Economic Impact of Aviation in Dubai’ report here.
