By Issa Baluch
Swift Freight International’s Issa Baluch explains how the Middle East’s aviation industry has changed during the past 30 years.
Flashback to the 1970s - the region was basking in its newfound oil riches and enjoying worldwide attention from business magnates. Trade was fully concentrated on supplying oil to other countries on a global scale.
As the oil-boom continued, airline giants, particularly from Europe, set up facilities within the region, with the promise of growing alongside the economy. This helped stabilise one of the greatest freight transit imbalance in logistics terminology, a staggering 90% of inward freight against just 10% transit traffic.
This is where the irony begins. Apart from the fact that local forwarders had to bear the pocket-searing airfreight rates, those big airlines did not prove their longevity and moved facilities from one booming country to another, which at that time included Asia and the Americas.
Except for Saudi Arabia Airlines, Kuwait Airways, and Bahrain's Gulf Air, there were no other popular home-grown airline carriers that sincerely empathised with the Arabian market to penetrate into the global trade scene.
Now, 30 years later, the non-oil sector of these oil-rich countries has surfaced. The whole world once again has its eyes on the Gulf countries; amazed at the phenomenal economic boom the region is experiencing with its infrastructure, tourism, real estate, and most importantly, transport hub facilities.
The free zones that proliferated the region, particularly in the UAE, opened doors to businesses once considered unimaginable. Seeing the tremendous market potential and taking advantage of trade-friendly regulations and an open skies policy, businesses flocked to the young Arab nation, with the aviation industry players leading the pack of those setting up offices and facilities.
The economic boom allowed the region's aviation front to flourish. Local businessmen and forwarders no longer have to fight for cargo space in airlines going to world-renowned airports in Europe, Asia or the US.
Now, owing largely to business turnaround plans and strategic geographic position, the Middle East has become one of the fastest-growing global airline hubs in the world. Some of the biggest air cargo and passenger carriers are based in the Middle East, and almost all renowned airlines land at airports in the Middle East on a regular basis. Abu Dhabi-based Eithad Airways has flights to 30 destinations worldwide.
Within the region, Doha-based Qatar Airways emerged to become one of the best airlines in the skies today, flying a modern fleet of aircraft to around 75 destinations worldwide.
Dubai-based Emirates Airlines currently flies to more than 90 destinations across some 50 countries around the world, including those hard-to-reach areas that local businesses could only dream to explore.
Now, nearly 800 Emirates Airlines flights depart from Dubai each week on their way to destinations on five continents. In fact, Emirates' flights account for nearly 40% of all flight movements in and out of Dubai International Airport. Having achieved this, the airline now aims to increase its market-share to 70% by 2010.
With all the aircraft acquisition, additional destination points and promising statistics, it is clear that the aviation industry players from this part of the world mean serious business. Unlike the foreign operators of the 1970s, they are here to stay; developing a foundation in a region, which promises to become the world's centre of aviation.
In freight terms, if one has to put a finger on the miracle that is Gulf aviation, it would be the imbalance, which existed during the 1970s, is now considered history.
Today, a very balanced freight movement has been developed in the Gulf, where often, there is more cargo leaving the region than actually coming in. This all indicates a very successful transportation hub and gateway business in the Middle East.