The aviation sector in the Middle East has long been one of the bastions of the regional economy. With the current economic landscape seeing a facelift and global consumer confidence coming out of the doldrums, the aviation sector’s contribution is growing exponentially.
In Dubai itself the aviation and tourism industry contributes close to $22 billion a year, and employs around 250,000 people directly and indirectly, which is almost 19 per cent of the workforce. It also constitutes almost 28 per cent of the GDP.
“The aviation industry’s contribution will continue to rise. The outlook is very strong. We are very fortunate that the regional governments see the direct link between the economic benefits of tourism and the need to invest in its infrastructure,” says Paul Griffiths, CEO of Dubai Airports.
The company owns and manages the operation and development of Dubai International Airport, as well as the new Dubai World Central.
“We are seeing incredible numbers. Our traffic grew 20.6 per cent in March, which is a huge number. No other airport in the world sustains this level of growth and volume. We want to be the biggest and best. We want those two things to come true at the same time,” says Griffiths.
This ambition is not going to be easy.
Despite the global market for air travel reaching more people, inefficient fuel costs and unreasonable levels of taxation are crippling aviation players.
Griffiths admits that this is a problem saying, “Clearly high oil prices are difficult to manage because it makes global air travel more expensive to the consumer, and hence stifles growth. The ability of people to travel depends on their economic circumstances, and no one likes a situation where a commodity that is aspirational is permanently out of reach.”
The best combination would be competitive oil prices and the highest fuel-efficiency possible obtainable by the airlines, he adds.
But Griffiths also gives a different spin on the oil price hike. “Oil prices hasten the technological push to create more fuel-efficient airplanes and makes the older less fuel-efficient aircraft uneconomic to operate. It also rewards the airlines that have taken the initiative to be more aggressive in their investment in new technology. Environmentally, perhaps there is a balance.”
Griffiths has often publicly made a strong case for airline taxes to be scrapped, stating that taxation on travel acts as an inhibitor to travel, is a shortsighted measure, while also not being good for the economy. “There is a pariah argument where governments are seeing the aviation industry as a soft target. They are putting ridiculously high indirect taxes masquerading as other issues on the cost of air travel. This is not a good thing at all.”
The CEO is also concerned about organic structural problems in the Middle East: “We are slightly challenged by air traffic control capacity with so many airports wanting to expand so aggressively in the region. People are looking to see if there can be some harmonisation to optimise air traffic capacity. Increased delays are not good for the environment, the customer service or anything at all.”
He adds that getting governments together to act and to bring countries together to have a single unified approach to air traffic control, like the US and Europe, will be beneficial and a welcome structural change to the air travel industry.
Griffiths confidently states: “Dubai Airports’ assault for the number one spot as the world’s largest international airport continues. We zoomed into second place a few months ago. It will not be long before we are the number one.”