Name: Baker Tilly
Price range: $

The aerospace and logistics sector is entering a decisive phase globally and, increasingly, in the Middle East amid current developments. Record aircraft demand, prolonged OEM backlogs, constrained aviation infrastructure including Maintenance, Repair and Overhaul (MRO) capacity — geopolitical realignment, and accelerating sustainability and digitalisation requirements are reshaping the competitive landscape.

For the UAE and the wider region, these dynamics intersect with national industrial strategies, logistics ambitions, and the growing investment appetite of sovereign wealth funds (SWFs) seeking long-term, resilient assets.

Aerospace today is no longer defined solely by engineering excellence. It is a capital-intensive, globally regulated ecosystem spanning manufacturing, aviation infrastructure development, MRO, logistics, data infrastructure, and defence-adjacent capabilities, where tax structuring, governance, supply chain resilience, cybersecurity, ESG alignment, and cross-border execution are central to value creation, alongside significant capital investment.

At Baker Tilly, our aerospace and logistics experience shows one clear trend: organisations that act early, structure decisively, and align investment with regulatory reality will lead the next growth cycle. Those that hesitate risk being forced into reactive decisions, often at greater cost and under heightened scrutiny.

The Aerospace Investment Moment

The UAE has firmly positioned itself as a global aviation and logistics hub, supported by world-class airports, airlines, free zones, and industrial platforms. Across the GCC, governments and SWFs are actively targeting aerospace manufacturing, aviation infrastructure, MRO, defence technologies, space, and advanced logistics as priority sectors.

The scale of the opportunity is significant:

The global air transport industry supports 86.5 million jobs and contributes $4.1 trillion (3.9%) to global GDP
In the UAE alone, aviation contributes approximately $92 billion (18% of GDP)
Passenger traffic is expected to reach ~5 billion in 2025, growing at ~5.8% annually
Air cargo accounts for ~33% of global trade by value (~$8 trillion)

Looking ahead, long-term demand remains structurally strong:

Passenger numbers are projected to reach 10.2 billion by 2026 and 18.8 billion by 2045
Asia-Pacific and the Middle East will account for a dominant share of this growth
Global airport infrastructure will require approximately $2.4 trillion in investment, including $240 billion across Asia-Pacific and the Middle East between 2025–2035

This is not a cyclical upswing; it is a multi-decade structural expansion. Sovereign wealth funds are increasingly attracted to aerospace due to its long-dated cash flows, strategic relevance, intellectual property depth, and alignment with national capability-building objectives.

This is where the ability to structure investments and operating models correctly from the outset becomes a strategic differentiator, not an afterthought.

Aerospace and Logistics as an Integrated Global System

Aerospace operates across deeply interconnected global value chains. Airports, aircraft, engines, spare parts, personnel, and increasingly data move continuously across borders—while regulation remains local, fragmented, and evolving.

This creates a fundamental tension:

Global operations vs. local compliance
Speed of capital deployment vs. regulatory scrutiny

Current constraints are exposing structural weaknesses:

OEM backlogs stretching beyond a decade
Global shortages in skilled labour
MRO capacity bottlenecks expected to remain tight
Increasing ESG, cybersecurity, and data sovereignty requirements

For Middle East–based investors and operators, the risk is not growth—it is poorly structured growth.

Case Study: Structuring for Cross-Border Expansion

Baker Tilly’s support to a global aircraft operator expanding into India illustrates how proactive structuring creates tangible value.

The client faced:

Potential Permanent Establishment (PE) risk
Withholding tax exposure linked to MRO operations
Evolving regulatory scrutiny
Complex operational and logistics considerations

Our approach was integrated and execution-focused:

Conducted detailed tax and regulatory risk assessments
Designed a compliant, tax-efficient operating model
Translated regulatory complexity into a practical structure
Supported board-level decision-making and implementation

Outcome:

Clear go/no-go investment decision
Board-approved expansion strategy
Reduced tax and audit exposure
Accelerated market entry

This demonstrates a critical point:
Early structuring transforms regulatory complexity into strategic confidence.

Strategic Reorientation: Building Resilient Aerospace Infrastructure

Given current geopolitical realities, aerospace infrastructure investment strategies must evolve beyond traditional hub expansion.

1. Asset Protection & Continuity

Distributed fuel storage (e.g., underground, off-site linked systems)
Crisis-resilient infrastructure and airspace contingency planning
Enhanced cybersecurity and defence integration

2. Network Diversification

Development of secondary and diversion airports
Strategic emergency aircraft parking and storage across multiple jurisdictions
Expansion into emerging markets (Africa, Southeast Asia)

3. Operational Flexibility

Modular terminal design
Passenger safety and protection systems
Flexible gate configurations
Rapid scalability of operations

4. MRO & Industrial Capacity

Expansion of regional MRO ecosystems
Integration with logistics and cargo infrastructure
Addressing long-term maintenance bottlenecks

5. Sustainability & Energy Transition

Sustainable Aviation Fuel (SAF) ecosystems
Electrification of ground operations
Smart energy systems and carbon reduction infrastructure

6. Cargo-Led Resilience

Cargo infrastructure as a stabilising revenue stream
Alignment with e-commerce and time-sensitive logistics growth

Why Immediate Action Matters

For investors, SWFs, and government-linked entities, the message is clear: investing first and structuring later is no longer viable.

Delays in addressing:

Operating models
Tax exposure
Governance frameworks
Cross-border compliance

lead to value leakage, execution delays, and reputational risk.

In a sector where capital is patient but regulation is not, timing is a strategic advantage.

How Baker Tilly Supports the Aerospace and Logistics Journey

Baker Tilly (UAE) is uniquely positioned at the intersection of regional ambition and global execution. Drawing on deep local insight and a coordinated global aerospace network, we support clients across the full aerospace and logistics lifecycle.

We work with operators, investors, family offices, and sovereign-linked platforms across:

Structuring cross-border investments and operations
Managing tax and regulatory risk
Strengthening governance and audit readiness
Supporting ESG and sustainability objectives
Executing confidently across jurisdictions

Our partner-led approach ensures that strategic advice translates into practical delivery.

In a sector where capital is patient but regulators are not, decisive action is the ultimate advantage. Baker Tilly stands ready to help aerospace and logistics leaders across the region act now for tomorrow—for clarity, confidence, and staying ahead of the curve.