We take a look at the ex­pected trends and op­por­tu­ni­ties com­pa­nies can wit­ness at the Dubai Air­show 2019

Aviation Business - - DUBAI AIRSHOW 2019 PREVIEW -

The aero­space in­dus­try is chang­ing. Ac­cord­ing to Dubai Air­show’s Market In­sights: The Fu­ture of Aero­space, there are key trends iden­ti­fied in the sec­tor that will shape its fu­ture in the years to come. In­no­va­tion in the sec­tor is be­ing driven by ef­fi­cien­cies and trav­eller ex­pec­ta­tions, while quan­tum com­put­ing is en­ter­ing the in­dus­try with many applicatio­ns and the Mid­dle East is in­vest­ing in R&D in this area. Another trend is the op­er­a­tional, se­cu­rity and com­mer­cial applicatio­ns of blockchain to the aero­space in­dus­try. Mean­while, smart man­u­fac­tur­ing is of­fer­ing OEMs time, weight and cost ef­fi­cien­cies, and reg­u­la­tion and oper­a­tion issues of eVTOLs (elec­tric ver­ti­cal take­off and land­ing ve­hi­cles) are un­der scru­tiny af­ter the oc­cur­rence of first test flights. Fi­nally, pas­sen­ger sur­veys show trav­ellers are in­creas­ingly open to au­to­ma­tion at the air­port yet only if there is a hu­man for when things go wrong.

Mid­dle East­ern de­fence spend­ing will reach US$100bn in 2019, led by Saudi Arabia and the UAE, ac­cord­ing to Jane’s by IHS Markit fore­cast. Out of the top 10 de­fence spend­ing na­tions per capita, five are in the Mid­dle East as are nine of the top 15 de­fence budgets per GDP. On av­er­age, Mid­dle East­ern coun­tries spend 13% of their fis­cal budgets on de­fence an­nu­ally with Oman and Saudi Arabia spend­ing close to 20% and 30% re­spec­tively. In fact, Saudi Arabia’s 2019 de­fence bud­get is USD$51 bil­lion, mak­ing it the third largest mil­i­tary spend­ing na­tion in the world.

The Dubai Air­show Del­e­ga­tions Pro­gramme, co-or­di­nated by show or­gan­is­ers, in con­junc­tion with the UAE Min­istry of De­fence, Dubai Civil Avi­a­tion Au­thor­ity and the Gov­ern­ment of Dubai, in­vites mil­i­tary and civil del­e­ga­tions to par­tic­i­pate. In 2017, the show hosted 279 del­e­ga­tions from 76 coun­tries around the world, with that num­ber ex­pected to in­crease in 2019.

Air Traf­fic Man­age­ment Chal­lenges

Ac­cord­ing to re­search by Dubai Air­show, growth in pas­sen­ger move­ments and air cargo over the com­ing decades is one of the great­est chal­lenges fac­ing the global air traf­fic man­age­ment com­mu­nity. Ex­perts will need to as­sess the up­com­ing tech­no­log­i­cal changes, build­ing an op­er­at­ing en­vi­ron­ment to an­tic­i­pate fu­ture air­craft types, and much more. The short-term trends, ac­cord­ing to Dubai Air­show’s Ex­perts’ In­sights: Global Air Traf­fic Man­age­ment re­port, will in­volve col­lab­o­ra­tion of sys­tems, in­for­ma­tion and tech­nol­ogy as well as freer rout­ing to ex­pand air space ca­pac­ity. Col­lab­o­ra­tion across all lev­els – whether air­lines, air­ports, or ANSPs, na­tional, re­gional or global – is key to man­ag­ing growth. Tech­nol­ogy will play a key role as well – whether through AI, au­to­ma­tion or ma­chine learn­ing. The fu­ture may in­clude drones, pi­lot­less flights and big data to pre­dict growth and in­form strat­egy.

Air Cargo Trends

The OECD’s long-term ITF Trans­port Out­look 2019 pre­dicts global freight de­mands will tre­ble be­tween 2015 and 2050 with the largest growth com­ing from the air­freight sec­tor with a CAGR of 4.5%. Cold chain lo­gis­tics for per­ish­ables and medicines is grow­ing at 7.8% and both Emi­rates and Eti­had have launched prod­ucts for fresh pro­duce and phar­ma­ceu­ti­cals.

Cargo Con­nect is re­turn­ing as part of the Dubai Air­show to tackle the issues fac­ing air freight. In the medium-term, Boe­ing’s pre­dic­tions for the air cargo in­dus­try is that it will sus­tain a 4.2% growth rate to 2037 much of which will be un­der­pinned by eCom­merce. Air­bus has is­sued its own air freight fore­casts and like Boe­ing, pre­dicts a 4.2% CAGR from 2017 to 2027 yet then sug­gest a slower global growth rate for the fol­low­ing decade at 3.1%. As a long-term pre­dic­tion, the Euro­pean OEM sees a 3.6% CAGR glob­ally and 3.4% in the Mid­dle East.

The un­manned aerial sys­tem (UAS) seg­ment of the aero­space in­dus­try is grow­ing, and Dubai Air­show’s data shows that the con­sen­sus is that the great­est growth and op­por­tu­nity is in the com­mer­cial/civil ap­pli­ca­tion of un­manned aero­space tech­nol­ogy.

The global com­mer­cial market is es­ti­mated to be worth $43bn by 2024, with Asia Pa­cific and the Mid­dle East be­ing the two fastest grow­ing mar­kets. The ap­pli­ca­tion of com­mer­cial UAS stretches across trans­porta­tion, agri­cul­ture, con­struc­tion, in­fra­struc­ture, med­i­cal and dis­as­ter re­lief, and PwC es­ti­mates $123bn of labour and ser­vice costs could be re­placed with un­manned ve­hi­cle op­er­a­tions.

Mind­ful of the grow­ing sec­tor, Dubai Air­show will fea­ture the lead­ing UAS tech­nolo­gies from around the globe.

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