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Tue 5 Jan 2010 12:19 PM

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ME airport services sector may need shake-up - study

Frost & Sullivan says private sector role needed to cope with aircraft growth.

ME airport services sector may need shake-up - study
AIRPORT SERVICES: Maintenance and ground handling services in the Middle East may need a shake-up to cope with increasing numbers of aircraft, a new report said on Tuesday.

Airport services in the Middle East, including ground handling and maintenance, may require a major shake-up to cope with a projected expansion in aircraft fleets, a report out on Tuesday said.

New analysis from Frost & Sullivan said large scale consolidation and sub-contracting would shape the industry and drive overall revenues in the future.

Its Middle East Airport Airside Services Market Assessment added that the market for airside services across airports in the Middle East was "predominantly monopolistic with challenges relating to imbalances in future demand and supply".

The report found that the market earned revenues of $1.92 billion in 2008 and estimates this to reach $2.83 billion in 2015.

Revenues from commercial aircraft are expected to constitute a major share as a result of a growing fleet size and greater average cost of handling and maintenance.

“The Middle East market for airside services comprising ground handling and maintenance is expected to experience robust growth because of the order backlogs in the Middle East coupled with the minimal impact of the economic slowdown on the regions passenger and air traffic,” said YS Shashidhar, vice president and country director, South Asia-Middle East & North Africa, Frost & Sullivan.

“The region is projected to have 1,206 aircraft and 708 business jets that will result in the traffic growing by about 10 percent within the Middle East.”

Shashidhar added: “It is vital for existing service providers to understand that a large number of deliveries are anticipated to increase aircraft movement in the region. Therefore, if subcontracting is not adopted or private participation not encouraged, then the future is likely to witness an imbalance between the demand and supply of services at airports.

“Civil aviation authorities and airport operators should boost private participation to enable airlines to choose from a larger number of service providers in addition to permitting specialised service offerings by individual service providers."

The aircraft movement across the region’s airports is anticipated to grow at a compound annual growth rate (CAGR) of 4.8 percent between 2008 and 2015.

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