Contemporary economic development is under the significant influence of innovation. New technologies provide companies with outstanding opportunities to improve their performance and achieve sustainability. One of the industries that benefit from technological advancement in aviation. This report focuses on innovative aspects in the activity of Abu Dhabi Airports, one of the leaders of the aviation industry in the United Arab Emirates.
The aviation industry is one of the pillars of the UAE economy, which is characterized by resilience to both global and regional headwinds. The economy of the UAE has already surpassed those of other Gulf Cooperation Council (GCC) countries due to its steady development (John 2017). Moreover, economic analysts, as well as the International Monetary Fund, share optimism about the further progress of the UAE economy.
The country follows its developmental course and is likely to preserve its leading positions as the best performer among the Middle East and North African economies within the following five years. One of the factors contributing to this success is to focus on trade and tourism, which drive the growth of the UAE’s economic performance. Consequently, despite the overall slowdown in economic development in the region due to low oil prices, the UAE preserves its firm position among the world’s competitive economies. In turn, the economic condition of the country has an impact on the development of industries.
For example, the whole aviation sector brings $80 billion to the economy of the UAE, which makes about 15 percent of its GDP (Export 2018). The most important participates of the aviation industry in the UAE are Etihad Airways and Abu Dhabi Airports Company. This report analyzes the Dhabi Airports Company as one of the leaders in introducing innovative technologies in the UAE.
Background of Abu Dhabi Airports Company
Abu Dhabi Airports is a public joint-stock company, which has a significant function in Abu Dhabi’s Economic Vision 2030 presented by the Abu Dhabi Government. It was created in 2006 by the Government to address the need for the Emirate’s aviation infrastructure in redevelopment (Abu Dhabi Airports Company 2018a). The company follows its vision, mission, and values to achieve sustainable performance. Thus, the vision of Abu Dhabi Airports is “to be the world’s leading airports group” (Abu Dhabi Airports Company 2018b, 2). Their mission is developed to reach the vision by:
being an efficient organization with high-performing people; understanding our customers and stakeholders; delivering world-class airport services and infrastructure; embracing a culture of quality and excellence; growing our business regionally and beyond; honoring our corporate and social responsibilities. (Abu Dhabi Airports Company 2018b, 3)
Abu Dhabi Airports has a set of values, which are accepted throughout the company and contribute to its success in the market. Thus, the company claims it is proactive and ambitious, which means they make an effort to exceed the expectations of clients and other stakeholders and achieve excellence in everything they do. Another value of the company is to be innovative and pragmatic. They apply creative approaches in implementing innovation but are realistic about the goals they set. Also, Abu Dhabi Airports Company is focused and accountable. They are pushed forward by clear purposes and always take responsibility for their decisions. Finally, the company values being collaborative and responsive. They share a common approach to work and are open to original ideas and new perspectives.
Five airports belong to and are operated by Abu Dhabi Airports. Each of these airports serves a particular travel segment. The first one, Abu Dhabi International Airport, is the major asset of Abu Dhabi Airports rapidly developing airport which is providing service for more than 96 destinations in 56 countries all over the world (Abu Dhabi Airports Company 2018a). The second one, Al Ain International Airport, is internationally recognized as “a center of excellence for technology and innovation” due to its cooperation with Mubadala Aerospace (Abu Dhabi Airports Company 2018a, 5). The major function of the third hub, Al Bateen Executive Airport, is to serve business aviation and private jets.
It is popular among clients from the Middle East and North Africa due to its strategic position in the middle of Abu Dhabi Airports Company 2018a). Delma Airport, which is the fourth one operated by Abu Dhabi Airports Company, is crucial for the development of the island because it connects the local population with Abu Dhabi. Finally, Sir Bani Yas Airport is a partner of Tourism Development & Investment Company and provides service for tourists who travel to the Natural Island.
Abu Dhabi Airports Company is constantly developing. Thus, as of 2016, only Abu Dhabi International airport served over 24 million passengers in its terminals, which is a 5.1 percent increase compared to 2015 data (Export 2018). The focus of Abu Dhabi Airport authorities is the continuous introduction of innovative technologies. For example, the smart travel system utilized at the airport, includes the conveniences for self-check-in and baggage drop, automated passport control gates that have options of biometric verification as well as facial recognition, and smart boarding gates (Export 2018). This system provides passengers an opportunity to check-in and simplifies movement around the airport.
Analysis of the Company
The assessment of a company from diverse standpoints can be provided through the utilization of SWOT analysis. This method allows evaluating the company’s strengths and opportunities as well as revealing the existing weaknesses and threats. Abu Dhabi Airports Company under the influence of economic integration and peculiarities of making business in conditions of the local economy has the following strengths, weaknesses, opportunities, and threats.
The strengths of Abu Dhabi Airports Company predetermine its steady development and high competitive ability in the market. The first strength is that the company is owned by the UAE Government. Particular governmental attention and the fact that Abu Dhabi Airports were created to bring change to aviation infrastructure result in an investment that stimulates the growth of the company. Moreover, the company has an important role in Abu Dhabi’s Economic Vision 2030 developed by the Government. Another strength is the involvement of Abu Dhabi Airports in capital projects and construction.
Currently, the Midfield Terminal Complex is being constructed. It is expected to accommodate 30 million passengers every year. Another capital project is the opening of a VIP terminal that will serve the interested clients. The third strength is the separation of services provided. Thus, five airports operated by the company have a focus on the specific sector of the market.
For example, Abu Dhabi International Airport serves the majority of the company’s clients, Al Ain International Airport is focused on the implementation of technology and innovation, and Al Banteen Executive Airport deals with business aviation and private jets. One more strength is highly trained staff, which provides excellent service to the clients of the company. Also, qualified professionals empower the implementation of new technologies that make an integral component of the company’s policy.
Despite the evident strengths, Abu Dhabi Airports Company has certain weaknesses. First of all, it is dependent on Government policies. Due to the governmental ownership, the company relies upon global changes that influence the Government of the country. For example, in case the priorities of the country change, the company can observe a decline in development. One more weakness is the demand for huge capital investment. The aviation industry needs active investment to develop. It is necessary to enlarge the fleet of airplanes and extend the range of services provided to remain competitive, which leads to extensive expenses.
High maintenance costs make another weakness of Abu Dhabi Airports Company. Airplanes are initially expansive and their technical maintenance to provide safety demands colossal costs. Also, the implementation of innovative technologies to improve service quality increases maintenance expenses. Also, the geographic spread of the workforce can be considered as a weakness of the company. Because the company suggests more than 96 destinations in 56 countries, there is a need for airline administration offices all over the world. This situation results in problems with personnel management and control of distant offices.
Still, the company is involved in a market that is constantly developing, which leads to many opportunities. The constant development of the air transportation market is the first opportunity for Abu Dhabi Airports Company. Due to overall globalization, new destinations are opening and need a reliable transportation service. Thus, companies involved in the aviation industry need to trace the market changes to catch up with its needs and react accordingly.
The focus on innovation is another opportunity that gives a chance to achieve excellence and follow a vision, which is to be the world’s leading airports group. For example, the company has well-developed Information & Communication Services at Abu Dhabi Airports. They provide high-quality IT services that cover the airport tenants 24/7. The company manages to keep pace with current innovations and developments and implements the most advanced standards of air transportation and safety. Abu Dhabi has become the first airport in the area that was awarded ISO 22301 (Abu Dhabi Airports Company 2018a).
One more opportunity that the company uses effectively is to focus on learning and development. Abu Dhabi Airports believe that it is important to invest in people and ensure that the leading roles in the company are occupied by UAE Nationals. It is also significant because the company is eager to become the world’s leading airports group and contribute to Abu Dhabi Vision 2030. To approach its goals, the company prioritizes Emiratization and provides training, which is aimed to strengthen the role of Emiratis in the global aviation industry. The company maintains the Gulf Centre for Aviation Studies (GCAS), which “is a center of excellence for airport and aviation training, focused largely on developing Emirati talent in aviation” (Abu Dhabi Airports Company 2018c, 6).
The job opportunities for Emiratis include such spheres as airlines, airports, cargo management, regulatory and civil aviation, safety and security, and aviation law. One of the recently launched training programs, Al Eqla’a, is an innovative initiative that trains students for the aviation industry and suggests them employment at Abu Dhabi Airports after graduation (Abu Dhabi Airports Company 2018c).
One more opportunity uses by a company is the diversity of industry clusters. It involves the functioning of Abu Dhabi Airport Business City, which empowers the functioning of Abu Dhabi International Airport, Al Bateen Executive Airport, and Al Ain International Airport. Thus, the Business City supports both private and public partnerships, deals with investment and property development (Abu Dhabi Airports Company 2018a).
This Business City unites a diversity of industrial parks, which combine such industry clusters as Aviation, Aerospace, Logistics, Manufacturing, Technology, IT, Marketing, Consultancy, and Knowledge and development. In addition, Abu Dhabi Airport Business City empowers its businesses that operate on its territory by duty and tax exemptions, opportunities for foreign ownership, as well as repatriation of capital and profits (Abu Dhabi Airports Company 2018a).
Finally, the threats are the aspects of the company’s activity that need to be revealed and prevented. One of the common threats faced by the majority of companies is competition in the industry. Despite high performance and the status of a leader in the aviation market, Abu Dhabi Airports Company is under the threat of losing its positions to competitors. Due to the rapid development of the aviation industry, many companies are involved in the competition for new destinations. Another threat is the impact of the global economic crisis. For the UAE, the crisis can result in a tragic drop in oil prices, which leads to a general decrease in the GDP of the country.
Consequently, investment flows can shorten and the pace of air industry development on the whole, and Abu Dhabi Airports Company, in particular, can slow down. The related threat is the changing price of fuel, which is frequent in the oil market. The lack of stability in fuel prices does not allow determining the costs of flights and thus can result in the loss of profit. Finally, one of the greatest threats typical of the aviation industry is the risk of a terrorist attack. It is the threat that prevents some prospective clients from choosing air transportation and makes them choose alternative means of transport. Thus, the primary task of any company involved in the aviation industry is to guarantee the safety of passengers. A reliable company with a focus on security is more likely to attract loyal customers than the one that concentrates on services only.
Concluding Summary
Both globalization and regional integration have a specific influence on business development. In the case of an industry as big as aviation one, this impact is even more evident. Speaking about global tendencies, the aviation industry depends on such factors as the global economy as well as the political situation in the world. As for politics, international conflicts increase the risk of terrorist attacks, which can result in a profit decrease due to a shortage of passengers.
Economic impacts are more diverse than political and can have different outcomes. For example, global economic crises lead to a decline in the development of the aviation industry due to the reduction of passenger flow. Another aspect that hurts the industry and becomes a threat for companies involved in the alteration of fuel prices that depend on the oil cost. It is particularly important for an airline in the UAE, where the oil industry is one of the significant contributors to GDP.
The UAE airlines on the whole and Abu Dhabi Airports Company, in particular, preserve leading positions in the region. The sustainability of the company is determined by a constant demand for air transportation as well as expansion and modernization of the industry. Moreover, an increase in the aviation industry is expected to be observed in the subsequent years despite unfavorable international environment due to such events as Brexit and other political instabilities.
On the whole, Abu Dhabi Airports Company is characterized by annual traffic growth, which contributes to the industrial development in the region. The company possesses numerous international and local awards, which prove the acceptance of its operational excellence and successes in marketing policies as well as in training and corporate responsibility initiatives.
Abu Dhabi Airports Company has excellent prospects for the future. The fact that the company pays attention to innovation and technology as well as to training and development of personnel provides the basis for sustainable development and excellent performance. Consequently, the company has the potential to preserve a leading position in the aviation industry of the region and strengthen its influence on the international level becoming one of the dominant providers of air traffic services. The company’s values together with strong corporate responsibility make Abu Dhabi Airports Company a strong competitor in the aviation industry market, both local and international.
References
Abu Dhabi Airports Company. 2018a. “Overview.”
Abu Dhabi Airports Company. 2018b. “Vision, Mission & Values.”
Abu Dhabi Airports Company. 2018c. “Learning and Development.”
Export. 2018. “United Arab Emirates – Aerospace.” Web.
John, Isaac. 2017. “Look-Ahead 2018: Bright Outlook for UAE Economy.” Khaleej Times.