PC: Emirates
The growth in the aviation sector of Dubai will continue to contribute multi-billions of money to the economy of the Emirates. The Emirates, estimated to have reached AED 196 billion in 2030, is said to account for 32% of the city’s GDP. It has been the largest increase in gross value added from AED 137 billion from 2023. Expected to deliver a core impact from the aviation sector, a report by Emirates Group, Dubai Airports, and Oxford Economics has indicated a contribution of AED 132 billion of gross value added to be delivered in the year 2030 with a presence of 22% of its GDP and support to 386,000 jobs.
The aviation sector is also expected to contribute AED 63 billion, or 10 percent of the city’s GDP, by 2030. In addition, employment supported by the aviation industry is expected to increase to 816,000 by 2030, which represents a quarter of all employment in Dubai.
Boeing Delays Cast a Shadow on Emirates’ Ambitions
Among them is the problem that Boeing has caused Emirates with a delay in the delivery of its much-awaited 777X and 787 aircraft.
The strategic expansion of Dubai’s Emirates airline falls under the general progression in the aviation industry. However, the situation is critical and challenging for the flag carrier as Boeing’s delay in delivery seems to threaten its productions, especially those involving the 777X. This delivery delay has implications beyond just the delay, as it follows the extended strike by Boeing machinists, who have halted production and delivery since August 2019.
The strike workers rejected the new offer that Boeing recently presented, which raises the question if this is yet another blow. Boeing recently announced that aircraft deliveries could be dropping due to the strike, which would then translate into lost chances for waiting aeroplanes of Emirates airlines.
The above notwithstanding, Emirates has an order book of 315 wide-bodied aircraft. According to Sheikh Ahmed bin Saeed Al Maktoum, by the early 2030s, Emirates Airline and Group would want to increase its fleet size to 350 aircraft. In this regard, on the same day, Sheikh Ahmed cited frustrations on the part of Emirates Airline over the delays regarding the 777X, further pointing out that such a move had increased seat capacity stress on the airliner’s side.
Emirates’ Response to Boeing’s Delivery Issues
Emirates president Tim Clark said that he was even more critical of the woes afflicting Boeing. Clark told reporters last week that Boeing needs to have a “serious conversation” with it regarding the delays in the delivery of 777X aircraft. He said this resulted from the “multiple contractual shortfalls” of Boeing, and therefore Emirates had had to make costly adjustments in its fleet. Clark also questioned Boeing’s ability to give reliable delivery forecasts in the present scenario.
It is likely to take a decision in 2014 as to whether it will buy more aircraft from Boeing or Airbus to fulfil the expansion plans of its fleet after 2028-2029. In other developments, the airline was expanding its retrofit program and needed to receive 65 Airbus A350s, starting this year until 2028.
Although progress on Boeing is slow, aggressive expansion plans for Emirates and upgrades of its fleet would be strategic and important to Dubai’s long-term growth in its aviation sector and in its economy as a whole.
