Dubai of­fers com­pet­i­tive avi­a­tion en­vi­ron­ment

Enterprise - - Biz traveller -

Ox­ford Eco­nom­ics re­leased a re­port in June ex­plain­ing the suc­cess of Dubai’s avi­a­tion model. Com­mis­sioned by Emi­rates and Dubai Air­port it is be­lieved the re­port de­mys­ti­fies some of the work­ings of the ‘Dubai Model’. The re­port en­ti­tled ‘Ex­plain­ing Dubai’s Avi­a­tion Model’ finds the sec­tor to be con­sen­sus-based, highly-com­pet­i­tive and con­sumer-cen­tric; gen­er­at­ing sig­nif­i­cant eco­nomic ben­e­fits for Dubai and the coun­tries it con­nects.

The find­ings of the re­port in­clude quan­ti­fy­ing the sig­nif­i­cant con­tri­bu­tion the avi­a­tion sec­tor makes to Dubai’s econ­omy, as well as the fact that the sec­tor gen­er­ates ben­e­fits for the global econ­omy and con­sumers. In ac­count­ing for the suc­cess of the sec­tor, Ox­ford Eco­nom­ics ver­i­fies that claims of un­fair competition and gov­ern­ment sup­port are un­founded. In fact, aware­ness of the strate­gic im­por­tance of avi­a­tion, backed by an open­ness to competition in Dubai and a con­sen­sus-based ap­proach to in­vest­ment has fos­tered suc­cess of the sec­tor. In ac­count­ing for Emi­rates’ suc­cess, Ox­ford af­firms its busi­ness model which is fo­cused on un­der served mar­kets, growth, efficient op­er­a­tions and the global ge­o­graph­i­cal ad­van­tage which Dubai en­joys.

Eco­nomic Ben­e­fits

Ox­ford Eco­nom­ics’ re­search cal­cu­lates that Dubai’s avi­a­tion sec­tor sup­ports 125,000 to­tal jobs in the Emi­rates. The study also quan­ti­fies the wider cat­alytic ben­e­fits the avi­a­tion gen­er­ates through tourism and con­nec­tiv­ity. As the over­whelm­ing ma­jor­ity of for­eign vis­i­tors who travel to Dubai ar­rive by air, Ox­ford cal­cu­lates that their spend­ing sup­ports nearly 134,000 jobs and con­trib­utes an ad­di­tional US $7.9 bil­lion to Dubai’s GDP. In to­tal, avi­a­tion sup­ports over 250,000 jobs and con­trib­utes over US $22 bil­lion; rep­re­sent­ing around 19 per­cent of to­tal em­ploy­ment in Dubai and 28 per­cent of Dubai’s GDP, ac­cord­ing to the re­port. The re­port also ex­am­ines the di­rect and flow-on eco­nomic ben­e­fits of ten case study coun­tries.

“These ben­e­fits ex­tend be­yond Dubai’s borders to the global econ­omy through en­hanced global tourism and trade via the pro­vi­sion of efficient and high qual­ity air ser­vices,” said Adrian Cooper, CEO of Ox­ford Eco­nom­ics. “Air trav­ellers and ship­pers us­ing Dubai and Emi­rates Air­line make an im­por­tant con­tri­bu­tion to many na­tional economies.”

Suc­cess Fac­tors

Dubai’s avi­a­tion sec­tor has seen tremen­dous growth in a short time frame. Over the past five years alone, the num­ber of in­ter­na­tional pas­sen­gers at Dubai In­ter­na­tional has vir­tu­ally dou­bled from 24.8 mil­lion in 2005 to 47.2 mil­lion in 2010. Dubai In­ter­na­tional air­port ranks fourth glob­ally in terms of in­ter­na­tional pas­sen­ger and cargo traf­fic. Emi­rates’ pas­sen­ger num­bers have in­creased six-fold over a decade, mak­ing it the largest air­line in the world in terms of in­ter­na­tional rev­enue pas­sen­ger kilo­me­tres.

“In some quar­ters, this suc­cess is viewed with sus­pi­cion, be­ing seen as ev­i­dence of gov­ern­ment sup­port and un­fair competition,” added Cooper. “We looked at this in depth and con­cluded that this view is in­cor­rect.”

Ox­ford Eco­nom­ics notes that the sec­tor’s suc­cess stems from gov­ern­ment aware­ness of avi­a­tion’s eco­nomic im­por­tance, a con­sen­sus­based ap­proach to in­vest­ment, open competition, a fo­cus on growth and link­ing un­der­served mar­kets with efficient op­er­a­tions; plus Dubai’s favourable lo­ca­tion at the in­ter­sec­tion of Europe, Asia and Africa plac­ing it within eight hours fly­ing time for two-thirds of the world’s pop­u­la­tion.

Fu­ture Growth

Avi­a­tion’s im­por­tance to Dubai is ex­pected to grow fur­ther over the next decade. Ox­ford Eco­nomic ex­pects the eco­nomic con­tri­bu­tion of the avi­a­tion sec­tor to rise up to US $44.5 bil­lion or 32 per­cent of Dubai’s GDP and about 372,900 jobs rep­re­sent­ing ap­prox­i­mately 22 per­cent of its em­ploy­ment by 2020.

“Avi­a­tion is one of the main en­gines driv­ing Dubai’s emer­gence as a global cen­tre for trade, com­merce and tourism,” said HH Sheikh Ahmed Bin Saeed Al Mak­toum, Chair­man and Chief Ex­ec­u­tive of Emi­rates Air­line and Group, Chair­man of Dubai Air­ports and Pres­i­dent of Dubai Civil Avi­a­tion Au­thor­ity. “That is why we have cre­ated a busi­ness and reg­u­la­tory en­vi­ron­ment that sup­ports its growth by en­cour­ag­ing open competition be­tween all air­lines, efficient op­er­a­tions and cus­tomer sat­is­fac­tion. There is no magic here. It’s just good busi­ness.” ◆

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