Saudi Arabia: Gulf Investment in Aviation to Hit $ 200 Billion

Saudi airlines (Saudia), the Saudi national carrier, has already ordered 12 wide-bodied Boeing 777-300s, eight Airbus A330-300s and 15 A321s as part of a multibillion-dollar program to modernize and expand its fleet and to increase flights to its domestic and regional destinations, as well as its routes to Europe, a report published in the Saudi newspaper Saudi Gazette on Thursday said.

Another $20 billion is targeted for airports and airport infrastructure in the UAE, where new global hubs are rapidly expanding in both Abu Dhabi and Dubai. Saudi Arabia has also announced a $20 billion program to upgrade existing airports by 2020.

Additional sums are being allocated for airports and aircraft in Bahrain, Kuwait and Oman, as well as Qatar and the UAE. Still other investment is planned to develop the region's own corporate business jet, spare parts manufacturing industries, aircraft maintenance and catering facilities, technical and training institutes.

Passengers and businesses in the GCC are expected to benefit greatly from a wider range of choice, while a wealth of new job opportunities will become available in the coming decade.

International passenger traffic increased 10.5 percent year-on-year in September from a 6.5 percent rise recorded the previous month, the International Air Transport Association (IATA) said in a statement sent to the Saudi Gazette Tuesday.

Middle Eastern carriers led the passenger traffic growth with a 23.9 percent increase compared to 2009. The earlier occurrence of Ramadan slowed demand in August, but boosted September's traffic.

This outstripped capacity growth of 15.3 percent. Nonetheless, load factors of 76.8 percent were below the industry's 80 percent performance. International freight traffic was dampened to only a 14.8 percent year-on-year increase last month against a 19 percent rise recorded in August, it added.

However, Middle East carriers bucked the declining trend in freight activity, with a 24 percent increase over previous-year levels. Even through this is less than the 24.2 percent recorded in August, when adjusted for seasonality this represents an increase of 1.4 percent over August levels. Moreover, when compared to pre-recession levels, the region's carriers are carrying a third more traffic than they did prior to the recession. Passenger traffic represents about three quarters of the industry's revenues. (QNA)



Amina Murtada
Global Arab Network