The Middle East’s industrial future is “up in the air!”

Posted: 16 July 2009 | Zeyad Al Majed, Senior Project Advisor for the Al Ain Cluster Development Programme, ADAC | No comments yet

A quick search on the internet will undoubtedly reveal that much of the business news emanating from the United Arab Emirates over the past few years has, unsurprisingly been attributed to either the federal or commercial capitals of the UAE’s seven-emirate federation – Abu Dhabi and Dubai.

A quick search on the internet will undoubtedly reveal that much of the business news emanating from the United Arab Emirates over the past few years has, unsurprisingly been attributed to either the federal or commercial capitals of the UAE’s seven-emirate federation – Abu Dhabi and Dubai.

Without doubt, a series of aggressive marketing campaigns have seen these cities, and indeed “The Emirates” as a whole, become a household name worldwide – and all of this in less than a decade.

Through a varying conduits that include international airlines, sports sponsorship and tourism marketing, the result has been that both Abu Dhabi and Dubai are now very much top-of-mind when thinking of visiting or doing business in the Middle East region.

And rightly so!

While marketing campaigns help build awareness, the real substance of Abu Dhabi’s growth is perhaps less known to some international audiences. However, it is such driving forces that have seen commitments that equate to the largest levels of large-scale infrastructural development ever conducted in any one place, at any one time.

Like ancient Rome, Abu Dhabi will surely not be built in a day, but the latter-day capital city is building up a good head of steam as it redefines the speed in which such projects can be achieved.

The Government of Abu Dhabi’s “Plan 2030” is the driver behind just this; a series of massive infrastructural developments that are designed to transform the emirate into a key business and tourism hub. Even considering the adverse global economic conditions of the last year or so, Abu Dhabi has proven to have a more robust and resilient nature than most and the far reaching and long term ambitions that the plan envisages are undeterred and the work continues.

Middle East Aviation Industry

Integral to the emirate’s success across all industries, the Government has long since identified that key to its ability to attract industry and grow as an attractive base for business, is the need to offer a world class aerospace infrastructure and a commitment to ensuring an environment exists that fosters the industry’s development – well into the 21st Century.

It was for this very reason that Abu Dhabi Airports Company was established in 2006, and given that exact mandate. Today, after inheriting two aviation assets at its inception, ADAC is the operator of a total of five airport assets – all currently within the Emirate of Abu Dhabi.

With its aviation assets in relatively close proximity to each other, ADAC’s strategy for maximising the commercial viability from each of them had to be clear and has been approached in the form of a diversification process, where the assets cater to a specific market need.

Therefore, ADAC currently operates a range of airports in the emirate – each dedicated to both a particular customer and airline partner focus. The core commercial hub into the emirate is, of course, Abu Dhabi International Airport; then there is the dedicated business and private aviation airport for VIP and corporate jet clients at Al Bateen International Airport in the city centre. Recently, two island-resort level hubs in Sir Bani Yas and Delma airports were added and, of course, one of the original assets acquired when ADAC was formed was the attractive cargo and low cost carrier (LCC) hub – Al Ain International Airport.

Al Ain International Airport

Situated equidistant between the cities of Abu Dhabi and Dubai, lies the Emirate of Abu Dhabi’s second city and the UAE’s fourth largest by population – Al Ain.

Home to one of only a few fully operational secondary airport facilities currently serving the Gulf, Al Ain is as strategically located today as it has been historically as the traditional bread-basket of the region. Quite literally an oasis or “Garden City” set against the backdrop of the naturally harsh desert climate, typical to the Arabian Peninsula, Al Ain’s history is steeped in the tradition of transportation and trade as a natural staging-post across the Arabian Desert.

To the modern casual observer, Al Ain’s advantage remains apparent from a mere glance at the map, where one discovers both its strategic location domestically, within the UAE, and as a strategic long-haul hub between East and West. Only an hour’s drive to Abu Dhabi or Dubai, or a mere two-hour drive in a Heavy Goods Vehicle to one of four key sea-ports in the UAE and the neighbouring territory of Oman, Al Ain continues its historical precedent in today’s modern aviation led world.

Having no issues relating to congestion, Al Ain International Airport offers partner airlines and freight-companies some of the most efficient, cost-effective airport services in the Gulf Region, and unlike many of the aviation projects underway in the Middle East, Al Ain International is already a fully functioning airport.

The growing Low Cost Carrier (LCC) market is also recognising the advantage of Al Ain’s location between two of the key commercial and tourism hubs in the UAE and, in recent announcements, Abu Dhabi has also declared that it will be launching its own LCC into the market in the near future.

Al Ain Aerospace Cluster Development

Driven by the strong regional investment that has been placed in the aerospace industry by both governments and private enterprises alike, a variety of industrial and business services are starting to see a natural synergy between having their operations in the Emirate of Abu Dhabi, and in particular Al Ain, to cater to these unique demands.

Just taking the simple fact that the largest procurement of commercial aircraft in the history of aviation has been made by the region’s state-owned airlines in recent times, it is not difficult to see why a unique dynamic and opportunity is there. Various light and heavy industries in manufacturing, heavy MRO, education and training and logistics alone are among the potential entrants into the market on the back of the aircraft coming into the region.

It is a fact not lost on senior management at Abu Dhabi Airports Company (ADAC) as they sought ways to best align the government’s agenda with strong, commercially driven initiatives to boost the aerospace industry and infrastructure in the region. The Al Ain Aerospace Cluster is one such development that is clearly being positioned to allow these objectives to be realised.

With the goal of developing aerospace product exports as part of an economic diversification measure, Al Ain’s Aerospace Cluster can offer potential businesses an environment with a low, predictable and inflation-controlled cost base. This is coupled with Abu Dhabi’s renowned and robust financial strength in the global economy and the developing access to global business and talent that continues to converge in and across the Emirate of Abu Dhabi.

In short, Al Ain is positioned strongly and will continue to lay out serious claims to being one of the most competitive business environments for the aerospace industry today. With large internationals already eyeing the opportunity and the rate of infrastructural growth in the emirate weighted towards aviation industries, supported by the strong will and financial clout of one of the world’s most robust economies, it is a fact that no one serious about dealing in the aviation business in the 21st Century can ignore.

These advantages, according to ADAC, include of course, access to the region’s renowned private capital.

Al Ain Logistics Park

In a two-phase approach scheduled for opening in 2010 and 2012 respectively, the Al Ain Logistics Park is a 650,000 square metre plot, designed with light industrial, freight forwarding, large distribution and logistics businesses in mind.

Initially, ADAC data puts the logistics districts as being home to 28,000 square metres of office space, 220,000 square metres of Logistics Park, 100,000 square metres for a freight terminal and 250,000 square metres of warehouse space. In addition to this, a variety of hotel and community services are expected to be developed to support the cluster.

Human capital

The long-term approach for building competency in the aerospace industry is, as always, through higher education and the industry’s active participation in supporting such dedicated national programmes.

In addition to a commitment to prevent the so-called “brain-drain” of talent to the West, the Al Ain Aerospace Cluster recently signalled a statement of intent by establishing a twinning agreement with BavAIRia Aerospace Cluster in Germany. This agreement is set to oversee the development of a partnership between one of the world’s most recognised regions in the aerospace industry (Bavaria) with one of the world’s fastest growing – Al Ain.

Partnerships have already been penned with academia in the UAE (Khalifa University) and major investment arms of the Abu Dhabi Government (Mubadala), with ADAC also adding to this commitment with the establishment of the Gulf Center for Aviation Studies (GCAS) which is set to address teaching and instruction in dedicated aviation areas, from air traffic control to scientific research in aviation systems.

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