Abu Dhabi, UAE: The UAE is looking to further develop its already strong trade relations with the emerging BRICS economies of Brazil, Russia, India, China and South Africa, especially in the aviation and aerospace industries.
Estimated by Goldman Sachs to account for nearly 40 per cent of the global GDP by 2050, BRICS countries are now looking to further develop their capabilities in the fields of aviation and aerospace as key economic drivers. This year’s Global Aerospace Summit in Abu Dhabi will see increased participation from BRICS countries, as 55 delegates have already confirmed attendance at the leading global industry forum.
Scheduled to run at the St. Regis Hotel, Saadiyat Island, Abu Dhabi from 7-8 April, 2014, the event is attracting C-level executives from airlines, aircraft manufacturers, satellite companies, aerospace associations and suppliers from established and emerging worldwide markets. The summit will focus on the challenges of driving industrialization and growth while adapting to global socio-economic change.
“Over the past 100 years, aviation transformed the world into a connected global community. This year we expect some 3.3 billion passengers to board planes. That’s nearly double the 1.7 billion air travelers in 2000. It is clear that people want and need to fly— to explore new places, do business or connect with family and friends. Connectivity is critical to the global economy—driving $2.2 trillion (More than AED 8 trillion) in economic activity and supporting 57 million jobs,” said Tony Tyler, director general and chief executive of the International Air Transport Association (IATA).
“As we look to the next century of aviation the role of the BRICS countries is well placed to grow in importance. All depend on aviation to provide critical economic links and Brazil, China and Russia have well-established and growing aerospace sectors. The policy environment and challenges varies widely among the BRICS countries. For airlines, cost efficient infrastructure, the capacity to grow and reasonable taxation are among the top priorities. Understanding that aviation is a catalyst for growth creates a common interest between governments and the industry. And the best way to build the future is with strong partnerships among all sectors in the value chain and with governments,” added Tyler.
India is among the world’s fastest-developing aviation markets, and IATA has estimated that the local industry will witness 6.6 per cent annual compound growth over the next five years. Looking to build up its airport infrastructure, India has recently urged the UAE to direct more foreign investment into the country, especially in sectors such as transport and aviation.
Following the Indian government’s decision in 2012 to allow overseas carriers to buy stakes up to 49%, new airlines are looking to launch in India and capitalize on the country’s 1.2 billion population. Earlier this year, a new AED3.3 billion terminal was inaugurated at Mumbai International Airport.
Airbus predicts that the global demand for commercial aircraft will reach $4.4 trillion (More than AED 16 trillion) over the next 20 years, with India and China driving a significant portion of that demand. Trade relations between China and the UAE have improved considerably in the last few years. Recent market reforms planned by the Chinese government will potentially reduce investment restrictions and have given renewed hope to UAE-based investors.
China expects a GDP growth of 7.5 per cent during 2014 and aviation connectivity has been playing a pivotal role in the country’s economic development. According to IATA reports, the total number of airline passengers will rise to 3.91 billion by 2017, with routes within or connected to China the single largest growth driver. With this growing demand for air travel, the aviation powerhouse is investing in further boosting its infrastructure to realize its full growth potential.
The UAE’s fourth largest trade partner and host to the world’s second largest general aviation fleet, Brazil is another promising market for the industry. The booming economy is eyeing the emirates for investment and partnership in specific sectors, including logistics, infrastructure and transport. Last year, Etihad Airways extended its network to Brazil and other BRICS countries, connecting Abu Dhabi to these high-growth nations. The airline also conducted a major recruitment drive in Sao Paulo, allowing Brazilian candidates the opportunity to work in the UAE aviation sector.
A recent addition to the BRICS nations, South Africa aims to drive national growth through a strategic focus on aviation-enabled tourism. The South African aviation sector supports 350,000 jobs and contributes ZAR74 billion to the local economy. Aviation development is also an important consideration for Russia, as air transport plays a critical role in connecting the vast country domestically as well as to other international economic hubs.
“In Russia, the aerospace sector supports more than 400,000 jobs and is experiencing renewed growth since 2007 thanks to an active industrial policy and the creation of national champions like the United Aircraft Corporation” said Fadi Farra, Chair of the Advanced Manufacturing Council of the World Economic Forum and partner at Whiteshield Partners. “However, such a growth can only be sustained on world markets if the collaboration between foreign investors and governments of the region to reduce policy barriers, enhance human capital and build the full eco-system of aerospace capabilities remains effective.” added, Farra.
Aviation and aerospace experts from these fast-growing BRICS countries will gather in Abu Dhabi next week to share their experiences of supporting industrialization, improving supply chain standards and creating value-added jobs for highly skilled individuals. The inaugural Summit in 2012 attracted more than 900 C-suite executives from 52 countries. The 2014 event will also include delegates from emerging markets such as Russia, China, India, Eastern Europe and South America.