Aviation to contribute $53 bn to Dubai’s economy by 2020

Emirates airline, Dubai Airports and the aviation sector as a whole contributed $26.7 billion to the Dubai economy in 2013, which was almost 27% of Dubai’s GDP and supported a total of 416,500 jobs accounting for 21% of the emirates’ total employment. These figures were based on the latest report “Quantifying the Economic Impact of Aviation in Dubai” conducted by global research firm, Oxford Economics, as a follow-up to a 2011 study done by the same firm.

The objective of the report was to quantify the economic impact of the aviation sector and its subsequent Dubai-based supply chain. In addition, the report explains the benefits that aviation brought to Dubai’s economy in 2013 in terms of gross value added and employment, and provides forecasts for the sector and its knock-on effects in 2020 and 2030.

The report re-affirms aviation’s growing significance as a major engine of economic development, and its far-reaching contributions to other industries as a catalyst for a spectrum of economic activity.

Core impact of aviation: It is estimated that the aviation sector, including the Emirates Group, Dubai Airports, and other aviation businesses such as airlines flying into Dubai, regulatory authorities and Dubai Duty Free, had a core impact of US$16.5 billion GVA in 2013. This includes direct, indirect and induced contributions and is equal to 16.5% of Dubai’s GDP, supporting over 259,000 Dubai based jobs.

Moreover, for every $100 of activity in the aviation sector, a further $72 is added in other sectors of the local economy from supply chain connections and expenditures. For every 100 jobs created in aviation, an additional 116 jobs are created elsewhere in Dubai.

Tourism benefits: Aviation has proved to be an indispensable catalyst for the growth Dubai’s tourism industry. Tourism and travel activities in 2013 had an economic impact of $10.2 billion GVA supporting a further 157,100 jobs. In 2013, Dubai welcomed nearly 10 million non-UAE visitors who spent $13 billion, accounting for around 1% of foreign visitor spend globally that year. The success of Dubai as a destination has been a public and private effort to invest in world-class aviation and tourism infrastructure to support the influx of visitors. The results have paid dividends and Dubai currently captures a 0.4% share of the world’s business and tourism traffic, double the share it had in 2000.

The passenger and cargo connectivity provided from Dubai has positively impacted Foreign Direct Investment (FDI) and trade. It also has provided greater access to foreign markets, encouraging exports, and increasing competition in the local economy, benefiting consumers.

Economic benefits in 2020 and 2030

Between 2014 and 2020, the contribution of the aviation sector to Dubai’s economy is expected to grow at a faster rate than the economy as a whole, on the back of strong growth in international passenger traffic and cargo. The sector’s airline and airport capacity continues to expand to accommodate for growing demand.

Using industry growth forecasts and modelling projections based on current expansion plans for Dubai International (DXB) and Al Maktoum International at Dubai World Central (DWC), it is estimated that the overall economic impact of both aviation and tourism related activities will rise to a robust $53.1 billion in 2020. This will be equivalent to 37.5% of Dubai’s GDP, supporting over 754,500 Dubai-based jobs.

Looking further ahead, the total economic impact of aviation by 2030 is projected to grow to $88.1 billion and will support 1,194,700 jobs.

Source and image: Dubai Airports