Aviation and Aerospace to the UAE

Trends and opportunities

The market

The aviation sector in the United Arab Emirates (UAE) is growing strongly from tourism, business, transit and re-exports into the region.

The Dubai International Airport is the world’s busiest airport in terms of passenger traffic at 91 million passengers in 2018 and 1,500 aircraft movements per day. It is also an important trade hub for the region with capacity to service 3.1 million tonnes of cargo per year.(Source:Emirates official website – ‘Dubai Airports fact sheet)

Since its inception in the 1960s, the aviation sector is still a relatively young and underdeveloped sector for the UAE. In its vision to be the leading aviation hub for the region, the country is keen to partner with international companies that can bring the latest technological innovations in airport infrastructure; passenger attraction and service; Maintenance, Repair and Overhaul (MRO); ground handling and other fixed-based operations; civil and commercial space, education, training and consultancy.

The UAE is an accessible market, is not heavily regulated and welcomes international expertise and collaboration. The UAE is also a launching pad for a number of exporters into the Middle East region, which is investing billions of dollars in this industry. Australian companies have strong capabilities in niche areas across aerospace and is viewed favourably as a nation that delivers consistently and with high standards.

The UAE, and more notably Dubai, is viewed as the largest airline market and aviation hub for the Middle East and Africa (MEA) region.

With an estimated $A228 billion (Source: Arabian Aerospace, ‘New Airports under construction with amazing designs, facilities and technology’ 9 May 2018) worth of pipeline airport projects across the region, the UAE is one of the top countries for infrastructure spend at $A32 billion. (Source: Khaleej Times UAE, ‘Dh85b airport upgrades set to boost capacity to 300 m’)

As part of the UAE’s diversification policies, the aviation sector was built on the government’s vision to promote trade and tourism.

The aviation sector currently contributes 15% of the UAE’s GDP, and up to 26% of Dubai’s GDP alone. (Source: Gulf News, ‘UAE aviation sector investments to cross dh1tr’)

Despite slower global economic growth, regional political instability and lower oil prices, the UAE leads the region’s passenger traffic growth boasting an annual increase of 7.8% in 2018 according to the Internal Air Transport Association (IATA).

Dubai is the 12th most connected city globally with a third of the world’s population within four hour flights and two-thirds within eight-hour flights. In addition to being branded as the key tourist destination for the Middle East, the UAE is expecting to attract 25 million visitors on account of the global Expo 2020 event taking place from October 2020 to April 2021.

Driven by consistent growth in passenger traffic and the need to build capacity, upcoming aviation projects in the UAE will include civil construction contracts for passenger buildings and cargo terminals, aircraft hangars, information and communication technologies (ICT) systems as well as upgrading existing runways or building new ones, taxiways, access roads, jet fuel farms, and other facilities.

Opportunities

The aviation opportunities in the UAE include:

  • Ground equipment and services
  • MRO
  • Infrastructure development & aircraft hangar services
  • Aircraft recycling
  • Aviation safety and security including foreign object
  • Detection systems and cybersecurity
  • Innovative solutions for airport systems integration including IoT and blockchain training & development
  • Policies on environmental protection practices
  • International collaboration in research and innovation.

In ground handling, there is a big push towards innovation, electrification, automation and sustainability. Opportunities include electric passenger buses to move people between terminal and aircraft, utilisation of autonomous vehicles and equipment on the ramp, new or improved designs of equipment to increase efficiency, safety and sustainability.

There is a strong need for in-house MRO capabilities to cater to the increasing fleet size in the UAE. The two major airlines, Emirates and Etihad Airlines, generally ship components from around the world for repair and therefore could achieve significant savings in terms of cost and time if this could be produced locally.

The UAE is one of the largest markets for new aircraft – Emirates alone has 204 wide-bodies on order (as of December 2018). (Source: Emirates Official website) Furthermore, UAE carriers have one of the youngest fleets in the world with aircraft on average less than six years old, thus creating opportunities for Australian companies to provide business consultancy services for aircraft recycling.

With a rapidly expanding fleet and infrastructure, there is a shortage of suitable skilled workers. The UAE will require more than 55,000 pilots and 62,000 technicians over the next 10-15 years. (Source: Gulf News, ‘UAE aviation industry to contribute 53b by 2020’) In order to keep pace with the growing demand across the aviation value chain to maintain supply of pilots, crew, technical, mechanical and operational workforces, there is a need for both academic and practical training centres and flight simulators.

For Australian innovators, start-ups and scale-ups, the UAE has launched the ‘Innovation in Aviation Programme,’ which includes an award given every two years and aims to encourage innovation and creativity to improve the experience of travellers, raising safety standards, and reducing emissions. (Source: Gulf News, ‘Aviation in UAE: a continuing success story link’) Emirates and Etihad airlines have both established centres of excellence for training and Research and Development (R&D).

Emirates is closely involved with the Dubai Future Accelerator, a government-funded initiative aimed at fostering innovation in the aviation industry. Additional information on upcoming programs with Dubai Future Accelerators can be viewed on their website https://dubaifutureaccelerators.com/en/.

The UAE is also dedicated to establishing itself as a regional hub for civil and commercial space activities, with the launch of the UAE Space Agency (UAESA) in 2014 in Abu Dhabi, and the Mohammed bin Rashid Space Centre (MBRSC) in 2015 in Dubai. There are opportunities for Australian R&D space capabilities in the UAE as seen recently with a Memorandum of Understanding (MoU) between UAESA and South Australia to cooperate on scientific research and space technology.

Marketing your products and services

Market entry

The UAE market is very competitive with connectivity and developed trade links to Europe, Asia and the Americas. Australia is not currently recognised as a major player in the aviation industry and for Australian businesses to leverage opportunities, companies will need to be proactive and creative in marketing their unique solutions in the UAE.

Some of the market entry steps that can be considered for the UAE are as follows:

  • Participating in major local aviation trade exhibitions
  • Highlighting your international track record to customers
  • Visiting the market on a regular basis and investing time in this relationship-based market
  • Consider having a local presence or opening a representative office

Establishing a local presence could be undertaken with minimal investment by identifying the right local distributor or agent who can also help in determining suitable distribution channels for your products/services. Other business models depending on your export requirements could include a serviced office, representative/sales office or a joint venture with a local partner/ customer. A number of end users prefer dealing directly with suppliers given their significant market share and networks in the region.

It is useful to note that the aviation entities in the UAE are government-backed, even though they conduct their business as a private enterprise. For government related infrastructure projects, most tenders released will have a Public Private Partnership (PPP) focus. For those suppliers looking to establish a local presence, the UAE government is a strong advocate for FDI and may also offer to provide financial and non-financial support. This is reviewed on a case by case basis and criteria could include level of investment by the Australian company, product/service offerings, national sector priorities, and innovation.

Conducting due diligence is critical for the UAE, which would help avoid future debts, business scams and entering into bad contracts. The challenge, however, is the difficulty in evaluating a company’s financial background in the UAE as local laws do not require companies to provide such information. In this instance, Austrade strongly recommends advice from a reputable legal advisory firm and can provide referrals of companies who can offer legal assistance.

For Australian companies interested in exploring market opportunities in the UAE, Austrade recommends they connect with our local office to undertake an initial market assessment of their product/services. Once a positive level of interest has been ascertained, Austrade would advise the company to visit the UAE to have face-to-face meetings with the local customers/investors. Culturally, initial meetings are about developing a trusted business relationship. Telephone calls and emails do not provide a positive indication to the customer that you are serious in investing in their market and most likely will be unanswered.

The UAE is host to several high profile international aviation events. To maximise your visit, it is advisable to time your travel during a trade show, so you are able to meet and network with local and regional players in the aviation sector. Major trade shows in the UAE include Dubai Airport Show (April 2019) and Dubai Airshow (November 2019).

Austrade has a dedicated team to offer unique solutions for Australian businesses – this will range from providing business insights, market research, and introductions to senior contacts in the government and private sector.

Contact details

The Australian Trade and Investment Commission – Austrade – contributes to Australia's economic prosperity by helping Australian businesses, education institutions, tourism operators, governments and citizens as they:

  • develop international markets
  • win productive foreign direct investment
  • promote international education
  • strengthen Australia's tourism industry
  • seek consular and passport services.

Working in partnership with Australian state and territory governments, Austrade provides information and advice that can help Australian companies reduce the time, cost and risk of exporting. We also administer the Export Market Development Grant Scheme and offer a range of services to Australian exporters in growth and emerging markets.