The Future of Aviation Sector: the UAE and BRICS Strategic Alliance

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Global Aerospace summit
UAE is looking to substantiate its existing trade relation between the BRICS countries at the upcoming Global Aerospace Summit

The aviation and aeronautics domain is one that countries look to solidify as a mark of their proclaiming their presence in the biggest of economic stages in the world. Predominantly the most developed countries in the world are regarded to be pioneering leaders in the aviation sector, creating unprecedented commercial avenues and thereby opening up more opportunities within its ever-widening spectrum. But in the recent few years, several developing countries too have emerged as significant players in the domain which has shifted the attention back to them.

The Global Aerospace Summit which will be held in Abu Dhabi during the seventh and eighth of April pinpoints these developmental trends whilst highlighting on UAE’s focused planning to integrate its aviation industry with the highly touted BRICS countries. This move is also seen as a way of solidifying the trade relationship between the UAE and each of the five developing countries encompassed in the acronym.

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The Importance of BRICS in the Global Economic Scenario

  • Acronym for Brazil, Russia, India, China and South Africa which are the up and upcoming economies in the world’s economic front
  • According to Goldman Sachs, BRICS nations are expected to contribute about 40% of the world’s GDP by 2050
  • As per International Air Transport Association (IATA) survey, India is expected to have an increase of about 6.6% in its annual aviation sector
  • More foreign airline operators are keen to invest in the Indian aviation sector following the allowing of FDI in the sector to up to 49%
  • Easing of governmental limitations placed on foreign investments in China have been seen an important contributor to UAE potentially planning to invest in the Chinese aviation sector
  • China is expected to have a GDP of about 7.5% in 2014, most of which fuelled by the aviation domain in the country
  • According to an Airbus report, the demand for commercial aircrafts is expected to increase by about US$ 4.4 trillion in the next two decades thanks to increased markets in India and China
  • In South Africa presently, the aviation industry supports a workforce of about 3,50,000 personnel
  • Over 4,00,000 personnel are employed by the Russian aviation domain
  • Brazil currently has the second biggest airline fleet in the world and the sector is expected to grow even wider in the coming years

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Significance of UAE entering into the BRICS Aviation Sector

According to Tony Tyler, Director General and CEO of the 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.”

The United Arab Emirates is already involved to a certain extent in the aviation industry in all these countries. The Aerospace Summit this year will see a delegation of about 55 members from each of these five nations of the ‘C-Suite Executive’ level from across aircraft operators, aircraft manufacturing organisations, aviation associations and suppliers and even satellite communications’ corporates. At the Summit, more strategically promising economic tie-ups are expected to come about between the UAE and the BRICS countries which will, in all possibility, bring about a more globally enhanced aviation domain.

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