As significant new airports emerge from the desert and aircraft orders start to come in, the resource-rich Gulf is increasing its involvement in a sector that is expected to grow significantly in the next decades.
Two years after it was hosted in Qatar, the International Air Transport Association’s AGM is being held this week in Dubai. Billions of dollars are being invested in aviation throughout the affluent area.
And with good reason—the international trade association projects that passenger traffic in the Middle East will treble over the next 20 years, reaching 530 million by 2043. Global estimates are expected to grow similarly.
Authorities say that the new airport being built in Dubai will be the largest in the world, handling up to 260 million passengers annually. Currently, Dubai is home to the busiest airport in the world based on foreign traffic.
The capital of the United Arab Emirates, Abu Dhabi, is only a short drive away. Gas-rich Qatar has also been upgrading Doha’s Hamad International Airport, and in November, Abu Dhabi unveiled a new terminal.
Making a significant play is neighboring Saudi Arabia, which is investing its oil wealth in initiatives that will support it through the transition to sustainable energy.
Saudi Arabia has launched Riyadh Air, a new airline with 39 Boeing aircraft on order, in addition to announcing the opening of a new air terminal in Riyadh with capacity for 120 million passengers annually.
The Saudia Group, headquartered in Jeddah and owner of the flyadeal and Saudia airlines, revealed last month a massive deal for 105 Airbus planes.
With its sizable fleet of long-haul, wide-body aircraft, Emirates, the state-owned airline of Dubai, personifies the Gulf’s “hub and spoke” concept, which connects a wide range of long-haul destinations across the world via connecting flights via Dubai.
The topography of the Gulf “makes it a special place. We can reach 80% of the world’s population in eight hours”, late last year, Stan Deal, the head of Boeing’s commercial aircraft division, said.
“A massive growth”
Asia is predicted to lead the increase in international passenger travel, but the Gulf region, which is close to South Asia’s expanding markets, is also anticipated to gain.
Aviation specialist Nina Lind of business consulting firm McKinsey stated, “They’re very well positioned to capture the Indian traffic and connect the subcontinent.”
“There’s also a lot of incoming travel growth from Indonesia,” the speaker stated, alluding to travelers from the largest majority-Muslim nation in the world making their way to Saudi Arabia’s sacred sites.
“There’s a ton of growth.”
Airbus predicts that by 2042, traffic will more than treble between the Middle East and Europe and triple between the Middle East and Asia.
According to IATA vice-president Kamil Alawadhi, airports in the Middle East are now operating at a level that is “par with the demand, maybe lagging a bit… So you’ll see a very calculated business plan for either the expansion or building of new airports”.
“I don’t think we’re going to ever have an overcapacity for the next, I don’t know, 40 years or so in this particular region,” he said.
Strong brands and tight ties to Asia are advantages that the Gulf airlines—which also include Qatar Airways and Etihad—have, according to Geoffrey Weston, head of consulting Bain & Company’s aviation, logistics, and transportation sector.
“They do have the hedge of having spent, now, two decades building their brands and getting closer to their Asian and Indian subcontinent clients,” he stated.
According to him, the airlines have “also been dipping into” markets in Southern, West, and East Africa.
