When Dubai International Airport took the lead as the world’s busiest airport in the first quarter of this year, attracting more than 18 million passengers, it highlighted the integral role that Gulf countries play in the global aerospace industry.
Gulf airlines have consistently increased their profit margins thanks to continued innovations and intensive government investment, making carriers such as Emirates, Etihad and Qatar Airways household names the world over.
Growth in the United Arab Emirates has been partly down to the efforts of airlines such as Emirates, which aims to increase its passenger traffic to 100 million people a year by 2020. External factors such as location have also been important. The region’s proximity, particularly to emerging markets in Africa and the Asia-Pacific, and the access of government-owned carriers to cheap fuel, has led the aerospace sector to evolve as a strategic investment choice for foreign investors.
The development of innovative economic clusters has also placed the logistics sector as a whole on the cusp of economic take-off. Examples in this field are the Dubai Logistics Corridor, which will link Dubai’s Jebel Ali Port, the world’s sixth largest container port, to Jebel Ali Free Zone, and Al Maktoum International Airport, which upon completion will be the world’s largest airport in both size and volume. Also, UK car-maker Rolls Royce has partnered with Mubadala Aerospace, a UAE-based government-owned aerospace firm, to build its first maintenance, overhaul and repair base in the UAE.
Yet, political uncertainty in parts of Africa, such as Egypt and the Central African Republic, as well as highly fragmented infrastructure across the region as a whole and an undeveloped policy framework, means Africa’s logistics and aerospace sectors’ performance will continue to trail the global average.
Although Senegal, Côte d’Ivoire and Nigeria have announced large expansion plans for their deep-sea ports in Dakar, Abidjan and Lagos, respectively, continued delays have dented investor confidence. But decisions by Airbus and Bombardier to invest R157m ($14.8m) in South Africa and $200m in Morocco, respectively, reveal there has been an uptick in these countries’ aviation sectors.
Mazdak Rafaty is managing partner of Ludwar International Consultancy and small and medium-sized enterprise advisor to the joint Emirati-German Chamber of Commerce.