The UAE’s aviation sector is expected to lead the region over the next 20 years with average annual growth of 5.6 per cent — outpacing Qatar (4.8 per cent) and KSA (4.6 per cent), according to IATA.
The growth is being driven by rising incomes, favourable demographics, and the falling cost of air travel. Aviation in this region has benefited enormously from strategic investments and very positive policies by governments.
However, success does not mean that there aren’t significant challenges to be addressed. Airspace utilisation, cyber security and consumer rights regulation have emerged as key issues that policymakers, carriers and industry bodies need to address over the coming years.
Dubai, Doha, Abu Dhabi and Jeddah all have fast-growing airlines that feed increasing traffic into airspace already suffering congestion and delays. The current airspace utilisation in the UAE, for example, is based on a mapping structure that was carried out more than three decades ago. The airspace capacity constraint curve is likely to hit fast-growing airlines in the region and presents a risk to continued growth for the sector in the region. Currently, demand exceeds capacity, leading to congestion in the airspace and potential loss of market share to new airports in other parts of the region.
Last year, Dubai airports serviced an average of over 1,200 flights per day, while Abu Dhabi airports collectively serviced over 700 flights. This number is expected to grow to 2,600 and over 1,300 by 2030, respectively.
The UAE seems to have taken the lead in resolving the issue of airspace capacity utilisation by launching a major en-route and flow management initiative last year with Airbus ProSky, the ATM subsidiary of Airbus. The announcement followed an airspace study in 2013, conducted by Airbus ProSky, in which it identified ATM, airspace and communication, navigation and surveillance challenges resulting in 53 recommendations for improvement. Some of these suggestions have already been implemented by the UAE’s GCAA. Currently, between 40 to 60 per cent of the airspace in the Gulf is reserved for military use. Aviation authorities will need to reassess this space allocation as demand increases.
Another issue that has emerged as a key threat to aviation security is the risk of cyber attack. The global civil aviation community relies on computer-based and information technology systems for their operations. This reliance will continue to grow as new and modern airports are developed, new aircraft are introduced into service and stakeholders seek to meet growing demand from tech-savvy passengers.
In recent years, there have been a number of international incidents allegedly attributed to cyber attacks, which demonstrate that vulnerabilities exist in the civil aviation systems. While loss of personal data and breach of confidential information is one clear risk emanating from such attacks, the bigger risks are around aviation safety and business continuity. Reputational damage in these respects can negatively impact a reputation and brand image.
The GCC seems to be acting strongly to create deterrents in this regard. However, in order to fully address the issues, there needs to be a high degree of cross-regulatory cooperation between civil aviation authorities and carriers, ensuring operational and strategic control at all levels of data coding and transfer.
A key issue for the sector that is often underestimated is that of consumer rights. Increasingly, regulators in the GCC and the wider Middle East are either introducing or considering the introduction of similar regimes seen in Europe and the US within their jurisdictions. In doing so, it is crucial that they maintain a proper balance between the legitimate interests of passengers and the economic wellbeing of an airline sector which is vital to the economic future of the region. IATA has in particular coined the phrase “smart regulation” to denote legislation which maintains this balance.
If GCC governments and regulators and the wider region can achieve this objective, they will have every prospect of maintaining the reputation of the region’s aviation sector while avoiding the mistakes of other regulators and rule makers elsewhere in the world.
The industry is now at a crossroads and policy decisions over the coming years can create clear winners. The GCC has shown that it has the will and foresight to lead the way for the rest of the region.