ME Airports: $86bn for Expansion

21.12.2009 Aviation

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The aviation industry in the Middle East has expanded and is expected to grow further with regional airports set to pump in $86 billion as part of their massive expansion plans, said a new report from Frost & Sullivan.

 

This is estimated to double after 2025, with major airports in the region pursuing their aim of becoming global hubs, said Frost & Sullivan in its latest analysis on 'Middle East Airports Infrastructure Market.'

This emerging dominance, coupled with an A 380 order backlog of 50 per cent of global deliveries, will drive the aviation industry as a whole in the Middle East, it added.

"The emergence of the Middle East as a global hub in the future is attributed to the expansion of the 12 major airports across the region that constitute over 90 per cent of the total investment of $86 billion in the region," said Frost & Sullivan research analyst Gautam Ratan Kanal.

The current economic slowdown, Kanal pointed out, will not impact the Middle East commercial aviation industry and airport development activities will persist despite the slowdown as most expansion activities are funded by governments in these countries.

According to him, the cumulative effect of these factors is reflected in statistics related to market growth.

Passenger traffic, cargo traffic and aircraft movement across major airports in the region is expected to grow at a compound annual growth rate of 8.7, 8.5 and 4.8 per cent respectively from 2008 to 2015.

He said the Middle East was projected to be the only region that would witness an increase in traffic as a result of the growing demand for air travel in the region.

With 57 per cent of investments being allocated for construction and terminal expansion, the region is anticipated to offer significant potential for private infrastructural investors, he added.

"The lack of technically skilled labour, unfeasible labour costs and scarcity of land are likely to hamper market growth in the region," he added.

 

 

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