Dubai Airshow 2021: Beckoning the revival of the local and regional aviation sector

Standing at the tarmac of the Dubai Airshow, watching a military jet perform extremely complex feats in the sky – going up and down in twisting patterns, it appeared to be sketching the state of the entire aviation industry in the last two years.

The Covid-19 pandemic took the industry on a rollercoaster ride – with the downward spiral quite sharp and long. Yet, at the Airshow, it was clear that the ride has started to go upwards now, with all those on the front seats clearly relieved to be heading in the right direction – albeit gradually. In a state of the industry report released at the Airshow, Embraer announced that due to the effects of the pandemic, global traffic recovery – measured in revenue passenger kilometres (RPK) – is forecast to grow 3.3 per cent annually to 2040.

“Although slightly more optimistic than our previous forecast which only covered 10 years, the rate is still a notable deceleration compared to pre-Covid growth rates for the next two decades. We expect global RPKs to return to 2019 levels in 2024, a result of an extended pandemic recovery period and from expected changes in industry dynamics,” the report stated.

Looking at the Middle East, the growth rate is expected to be 3.8 per cent – ahead of Europe and North America. Airlines operating in the Middle East region will require 3,020 new passenger and freight aircraft deliveries by 2040, Airbus said in its Global Market Forecast launched at the Dubai Airshow. This will bring the total fleet to 3,210 from a 2019 fleet baseline of 1,300 aircraft.

Airbus forecasts that air traffic in the Middle East will achieve full recovery to 2019 levels between late 2022 and mid 2024. Globally, cargo is already operating today at 9 per cent above pre-crisis levels, and in the Middle East, at 18 per cent. Growth is driven by the forecast 2.3 per cent CAGR increase in GDP between now and 2040.

“This strong recovery is due to the region’s strategic location which is a vital economic, business and cultural connector between the East and the West. Government vision and strategic investment plans position aviation at the forefront of long-term planning in the Middle East. All of these factors will empower a return to the skies,” it said.

Speaking to journalists at the event, Sheikh Ahmed Bin Saeed Al Maktoum, chairman and CEO of Emirates Airline and Group, said the Dubai carrier has had a strong year so far, with expectations of further growth going forward. “Some countries – they are slow with how many people they can accept on flights in and how they can deal with the situation. I think from our side, Dubai Concourse A is open – everything is ready. We are talking to other countries, we are constantly in dialogue with them and pushing them to take our [the UAE’s] example, to do what we are doing,” he said.

Sheikh Ahmed also confirmed that the company is planning to deploy more of its Airbus A380 jumbo jets as demand hikes. “Currently we have 47 A380s in operation and by the end of the year, we plan to deploy roughly 60,” he said.

Talking deals As the first in-person airshow to take place since the outbreak of the pandemic, the event saw several deals announced, including both commercial and defence contracts. European aircraft manufacturer Airbus dominated the list with 408 aircraft orders – with 269 firm and 139 commitments, including a mega order for 255 of its narrow-body A321neo and A321XLR jets from American private equity firm Indigo Partners, as well as an order for 111 aircraft from Air Lease Corp and an order for 28 jets from Kuwaiti carrier Jazeera Airways.

Meanwhile US-based Boeing also announced 101 orders, including a mega Dhs33bn deal for 72 jets from India’s Akasa Air. Among the most active at the airshow was the UAE’s Ministry of Defence, which announced a total of 23 deals worth over Dhs22.52bn – up from the Dhs18bn worth of deals signed during the 2019 edition of the Dubai Airshow.

New direction
Participating for the first time at the Dubai Airshow was a strong Israeli delegation, including aerospace and defence company Israel Aerospace Industries (IAI), whose products include satellites, UAVs, missiles, intelligence solutions, weapon systems, air defence systems, robotic systems, radars, business jets and aerostructures.

At the Dubai Airshow, the company showcased its Barak MX air and missile defence system, unmanned aircraft systems (with vertical take-off and landing capabilities), special-mission aircraft, the Zibar UGV, satellites, and VR showing  avionics upgrades.

“The Dubai Airshow provides excellent opportunities for new business ventures and partnerships in the region. It serves as an open door for us to find new partners and strengthen existing collaborations, and as an exciting platform for bringing new business endeavours to fruition,” says Boaz Levy, CEO and president of IAI.

Since the signing of the Abraham Accords last year, IAI has partnered with Etihad Engineering to create the first and largest cargo conversion site in Abu Dhabi to convert B777 aircraft. During Dubai Airshow, IAI also signed an MoU with Emirates to convert four B777 aircraft in the new Etihad conversion facilities (these will be the first planes converted there), with potential for more aircraft conversions in the future.

The company also signed a deal with UAE’s Edge to establish a maintenance centre for a selection of IAI’s systems in the UAE.

“The UAE and Gulf region have a strong market for defence systems and products, and we look forward to sharing resources and working together with customers in the region,” says Levy. “We are a startup nation, and we have found a partner in the UAE – or the startup Emirates – in our shared innovative and entrepreneurial spirit.

“Collaboration on research and investment in the technology sector to develop and produce cutting-edge technologies is driving the industry forward. We can propel the industry further by bringing together experts in these fields from all over the world, and by investing in the future generation which will learn to develop and build advanced solutions with new partners. As more countries join the Abraham Accords, IAI is excited to share resources and work together to enhance the technology sector in the region and in the world,” he adds.