The Middle East’s air passenger traffic is tipped to grow by 6.7 percent a year over the next 20 years as the region’s outbound routes outpace all others around the world, a new report said.
The Alpen Capital report on the GCC Aviation Sector said the region’s aviation industry was experiencing “exciting times” as a result of resilient growth drivers and governments supporting the liberalisation of the sector.
“As the cross-road between the west and the east, the region is enjoying its status as a global aviation hub,” it said.
However, the report noted challenges for the sector included the increasing competition amongst the Gulf carriers, a lack of secondary airports in some markets – forcing budget carriers to operate out of main airports – and robust fleet expansion plans that could lead to over capacity.
The report forecast a 6.7 percent compounded annual growth rate in air passenger traffic between 2012 and 2032, outperforming all other regions, with air cargo expected to grow by 7.2 percent a year over the same timeframe.
Within the Middle East, the report said passenger traffic was tipped to increase in the UAE, Saudi and Oman by 6.6 percent, 6.9 percent and 7.5 percent respectively between 2012 and 2017.
The Middle East aviation market was expected to receive the delivery of 2,610 aircraft by 2032, valued at $550bn, the report said.
“As a result, the total fleet size in the region is expected to increase at a 4.7 percent CAGR during the period to reach 2,850 aircraft in 2032,” it said.
The report said growth drivers including the region’s approximate eight-hour flying distance to two-thirds of the world’s population, abundant oil reserves providing stable and lower-cost fuel, an expanding population, demand for business and leisure travel and a rampant tourism development agenda.
Among the challenges, the report said prolonged global economic uncertainty may have a negative effect on the GCC aviation sector in the medium term with other challenges including a reluctance by some government-backed carriers to privatise.
However the report concluded that “the attractiveness of the GCC aviation sector far outshines its challenges, making it the place to be in for accelerated growth”.
“The demand for aviation services in the GC is here to stay for the long term, benefiting all its stakeholders, “ it said.
“As a result, the GCC aviation sector is set to become an important benchmark in the global aviation market.”
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