Report: Opportunities for Dutch companies in the Middle East
There are plenty of opportunities for Dutch companies in the fast growing Middle Eastern aviation market, especially in the field of MRO and education.
Opportunities for Dutch companies
One of the major challenges of the dramatic growth of the Middle Eastern aviation sector is the ability to attract and retain appropriately skilled people. By 2020, Dubai’s aviation sector alone could create nearly 400,000 new jobs. Demand for people is mainly driven by the aggressive capacity expansion in terms of orders, infrastructure, new airports and new routes. Education City in Qatar has a strong focus on education and developing R&D capacity for the aviation industry.
The relatively young population of many countries in the Gulf region, paired with the often still insufficient attention for technical vocational education, provide opportunities in transferring knowledge and skills as a part of doing business.
The maintenance organisations of the major airlines in the Gulf region cannot keep track with the growth in number of aircraft in operation and the related maintenance. It is expected that certain maintenance will be outsourced, preferably in the region. Cooperation of Dutch companies with smaller maintenance organizations may be relevant for a position within the MRO supply chain of Emirates, Etihad and Qatar Airways.
In addition, the rise of the budget airlines (often without their own maintenance organisation) provides opportunities for external suppliers. The maintenance of these airlines has to be done by independent MRO companies or by the maintenance organisations of national carriers who have capacity for “third party maintenance”.
Next to maintenance, the Aerospace Manufacturing industry is also on the rise. In Al Ain, Abu Dhabi’s second city, the UAE government is developing a dedicated aerospace and aviation cluster, the Nibras Al Ain Aerospace Park. Strata, a composite aerostructures manufacturing company, is located in the Nibras Al Ain Aerospace Park and manufactures for the biggest players in the industry, Airbus and Boeing.
Local customers often prefer to work with companies or institutions that have a base in the Gulf States for easy accessibility and back up support and service. Access to the right contacts, prompt delivery and availability of the product in the market and competitive prices are important factors.
Many initiatives are being undertaken to control the emissions of the aviation sector and reduce its environmental impact. The aviation regulatory authorities of the UAE and Saudi Arabia have declared policies pertaining to engine emissions. Adhering to such environmental norms and policies is a challenge for the airline companies. The knowledge of the Netherlands in the fields of clean energy and environmental technology can be beneficial to these players in the Gulf region.
In the Gulf countries, the governments play crucial roles in the development of the local aerospace market. Building relationships with the Dutch government representations often strengthens the business position.