03
April, 2014 - 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.
