Manik Verma September 4, 2025September 4, 2025 The United Arab Emirates has established itself as a significant player in the global aviation sector, demonstrating excellence as both a pivotal air transport hub and a leader in the domains of aviation finance and aircraft leasing. Dubai International Airport (DXB) welcomed a record high of 23.4 million passengers in Q1 of 2025, making it the busiest quarter in its history. In this way, the UAE’s aviation sector continues to set goals for growth, innovation, and connectivity. Aviation Finance and Aircraft Leasing: Recent Developments The UAE’s aviation finance market is thriving and is backed by sound legal frameworks and a strong desire for investment. In March 2025, the Dubai Aerospace Enterprise (DAE) announced a deal to buy 17 next-generation planes for $1 billion, a step towards strengthening its position in Dubai aircraft leasing and global lessor markets. The DAE intends to lower the average age of its fleet and increase the proportion of fuel-efficient planes with this purchase. This fully aligns with the market’s focus on sustainability and operational efficiency. Meanwhile, international lessors are strengthening their ties with the region. For example, Avolon successfully secured a $1 billion unsecured bank facility in May 2025, with participation from several Middle Eastern financial institutions, including Emirates NBD and Abu Dhabi Commercial Bank. In parallel, Abu Dhabi’s flagship carrier Etihad Airways announced its intention to pursue an initial public offering (IPO), with a planned 20% stake sale expected to raise up to USD 1 billion under Abu Dhabi Developmental Holding Company’s (ADQ) ownership. While the launch may be deferred from Q4 2025 to early 2026, the move underscores investor appetite in the UAE aviation sector and is set to fund Etihad’s ambitious growth strategy, including nearly doubling its fleet by 2030. The UAE aviation finance law, together with the Civil Aviation Law (Federal Law No. 20 of 1991) and the Cape Town Convention, supports a wide array of financing and leasing structures. Prior approval from the General Civil Aviation Authority (GCAA), robust documentation, and compliance with airworthiness and operational standards are some of the key regulatory requirements for Dubai aircraft leasing and broader UAE transactions. Corporate Jets: A Surge in Demand and Investment The corporate jet sector in the UAE is experiencing significant growth, driven by increasing demand from high-net-worth individuals (HNWIs) and corporate entities seeking efficient and flexible travel options. Falcon Luxe, a UAE-based private jet operator, plans to expand its fleet to over 50 aircraft by the end of 2026, up from 12 in 2025. This expansion aims to meet the rising demand for private air travel in the region. X-1 Jets, a Monaco-based private aviation company, reports Dubai as the strongest market for private jet services in the Middle East. The company offers JetCard programs ranging from 6.25 to 25 flight hours on light jets accommodating up to 8 passengers, catering to the growing demand for private aviation in the region. VistaJet, a global private aviation company, has observed a tripling of corporate requests for proposals (RFPs) in early 2025 compared to the previous year. The company attributes this surge to business travelers prioritizing efficiency and flexibility over traditional business class options. According to Mordor Intelligence, the GCC private jet market is currently valued at USD 0.73 billion and is projected to grow to USD 1.26 billion by 2030, with the UAE leading in demand. Innovation and Future Technologies Beyond traditional airline growth, the UAE continues to position itself at the forefront of aviation innovation. Joby Aviation, a pioneer in eVTOL air taxi services, conducted its first test flight in Dubai in mid-2025. The company has outlined plans to reduce travel times significantly, with a trip from DXB Airport to Palm Jumeirah projected to take just 12 minutes compared to 45 minutes by road. Four initial skyports are planned at Dubai International Airport, Palm Jumeirah, Dubai Downtown, and Dubai Marina, reflecting the UAE’s commitment to integrating advanced air mobility into its transportation ecosystem. Infrastructure, Fleet Expansion, and New Routes Expanding the fleet is the primary goal of all airlines in the UAE. The $52 billion order for Boeing and Airbus aircraft by Emirates, scheduled for delivery through 2030, underlines the country’s confidence in the aviation future. The aviation sector is projected to contribute AED 280 billion to the national GDP by 2025, supporting 1.4 million jobs by 2030. Flydubai continues to expand its fleet with the addition of 12 new Boeing 737 aircraft by the end of 2025. The airline has already received seven aircraft between April and August, bringing its fleet size to 93. An additional five Boeing 737 MAX 8s are expected before the year concludes, increasing the total fleet to over 95 aircraft. Infrastructure growth is just as ambitious. Dubai is progressing with the expansion of Al Maktoum International Airport (DWC), a $35 billion megaproject poised to become the world’s largest airport. The first phase, expected to be operational by 2032, will feature a futuristic terminal with a canopy-like design, four concourses, and the capacity to handle up to 150 million passengers annually. The expansion includes a new 4,500-meter runway and advanced technologies to ensure efficiency and sustainability. Route expansion continues to enhance connectivity. Eurowings is set to launch flights between Berlin and Abu Dhabi in 2025, while Air Arabia Abu Dhabi will fly to Almaty. In July 2025, however, low-cost carrier Wizz Air announced its exit from Abu Dhabi, citing regulatory and operational hurdles, as well as wider regional challenges. Shortly after, Etihad Airways revealed plans to launch seven new routes from the UAE capital between November 2025 and March 2026, including Medina, Saudi Arabia, and Tashkent, Uzbekistan, reinforcing its strategy to expand into high-growth Asian markets. The UAE’s Role as a Global Aviation Hub Dubai International Airport is undoubtedly one of the world’s busiest international airports, with 23.4 million passengers in the first quarter of 2025 and key destinations such as India, Saudi Arabia, the US, and the UK. The UAE’s strategic position, superior infrastructure, and business-friendly regulatory environment attract airlines, lessors, and financers from around the world. Abu Dhabi Airports has reported a 13.1% year-on-year increase in passenger traffic for H1 2025, welcoming over 15.8 million travelers. This growth is attributed to expanded routes and new airline partnerships, including Air Arabia’s decision to base more aircraft in Abu Dhabi, increasing capacity by 40%. The Midfield Terminal Complex, a 700,000-square-foot facility, is set to double the airport’s capacity, enhancing Abu Dhabi’s status as a key aviation hub. The sector’s emphasis on sustainability is also noteworthy. Airlines are investing in sustainable aviation fuel (SAF) and next-generation aircraft, and the government is promoting green financing measures to decrease emissions and meet climate goals. Legal and Regulatory Considerations Navigating UAE aviation finance legislation, Dubai aircraft leasing rules, and overall aviation legal guidance necessitates an awareness of a variety of specialized criteria. These include the Civil Aviation Law, Cape Town Convention duties, GCAA approvals, and the differences between conventional and Islamic finance arrangements. Successful transactions necessitate close attention to documentation, cross-border regulatory issues, and the changing landscape of green and innovative finance models. The UAE’s aviation finance market is central to its status as a global aviation hub. With record passenger growth, major financing deals, expanding international routes, and ambitious IPO plans, the country is set to maintain its leadership in aviation for years to come. Supported by a robust legal framework and a commitment to innovation and sustainability, stakeholders in the UAE aviation sector are well-positioned to capitalize on new opportunities and navigate the evolving global landscape. By providing tailored legal solutions, law firms not only mitigate risk but also unlock new business opportunities, helping airlines, lessors, and investors navigate the evolving aviation landscape. Their role is pivotal in sustaining the UAE’s position as a global aviation and finance hub, while fostering innovation, sustainability, and international connectivity. Recent developments such as Wizz Air’s exit, Etihad’s new route launches, and Joby Aviation’s air taxi debut highlight the dynamism of the UAE’s aviation industry — an ecosystem that continues to evolve while reinforcing the country’s role as a critical bridge between East and West. We gratefully acknowledge the research contributions of our interns, Devna Deepak and Sarah Ziyat. Their diligence, attention to detail, and commitment added greatly to the quality and depth of this article.
