Frost & Sullivan’s new analysis “Air Market - Revenue Opportunities and Stakeholder Mapping” said the Gulf military air market is set to generate revenues of $62.90 billion between 2010 and 2020.

This market would earn revenues of $1280 million in 2010 and reach $3906 million by 2020, owing to growing recognition of air assets as a force multiplier across regional defense communities.

The new research covers Saudi Arabia, UAE, Oman, Qatar, Kuwait, and Bahrain.

“The Gulf Cooperation Council (GCC) countries are moving towards an integrated air defense network to include air platforms, air defense batteries and air surveillance systems under the ‘Peninsular Shield’ initiative; but the progress has been slow,” the report said.

“The use of networked force by the US and European forces in the Gulf War and the latest Iraq and Afghanistan wars have been a startling revelation for Middle Eastern Ministries of Defense who are now keen on acquiring these capabilities.”

The new procurement surge over 2011-2015 highlights ongoing big-ticket purchases, particularly in Saudi Arabia and the UAE. Political influence weighs heavily in defense acquisition decisions.

As a result, most new procurements are being sourced from the US under Foreign Military Sales (FMS). There have been efforts to balance this relationship through procurements from elsewhere, including Europe and Russia.

“The US and European arms regulations (such as ITAR and End User Monitoring) often restrain the export of sensitive defense technology and capability such as UAVs to the Middle East” said the report.

This has been a particular dampener for the Western defense companies who want to be part of the development success story in the region.

Tier-1 suppliers need to focus on identifying new procurement opportunities and position their equipment accordingly. They should examine and identify lacunae in the current inventory of a particular country in terms of mission/role specific platform and strive to fill these gaps.

“System integrators should consider the intangible value that the project brings to the company, provided a good-quality project and associated services are delivered,” concluded the analysis.

“This has the cascading effect of winning further bids elsewhere in the region: reference to past project has a distinctive advantage in the Middle East market.”