The Middle East Business Jets Market Has its Cash Registers Ringing Despite the Economic Downturn, Observes Frost & Sullivan
Despite the global economic slowdown that adversely affected the commercial aviation industry worldwide, the Middle East has been one of the few markets to register growth. The air taxi business is expected to be a major driver for this market.
New analysis from Frost & Sullivan (http://www.aerospace.frost.com/), Middle East Business Jets Market Assessment, finds that the market earned revenues of $493.9 million in 2008. The business jets aircraft movement was 93,000 in 2008 and has grown to 1,03,000 in 2009. This growth is expected to continue and is expected to reach 1,60,000 in 2018. The compound annual growth rate (CAGR) of the business jets aircraft movement will be about 6.21 percent from 2008 to 2018.
"There is significant potential for the very light jets market in the Middle East," says Frost & Sullivan Team Leader John Siddharth C.P. "The major competitors in the very light jets market are Cessna and Embraer."
Growth in the Middle East business jets market along with the increasing gross domestic product (GDP) has necessitated airport expansion and will drive airport infrastructural development as airports in the region lack the capacity to cater to the existing air traffic.
This region comprises 11 major tier-I airports that are being extensively revamped to cater to the growing traffic. Of these, the Kuwait International Airport, Dubai International Airport and the New Doha International Airport form about 40 percent of the total share of investment going into the region. The infrastructural development in this region is expected to be driven by its geographic location, which serves as a link between the west and east.
The expected number of business jets to be delivered in the Middle East will be approximately 458 by 2018 and the number of jets expected to be delivered in Saudi Arabia alone will be about 154. Such a situation will be challenging to handle if there are no structured regulations in place.
"In 2005, the number of high net worth individuals (HNWIs) was around 0.25 million in the Middle East, accounting for nearly 3 percent of the global HNWI population," says Siddharth. "This is anticipated to become 5 percent or approximately 0.7 million by 2012, positively impacting the market's prospects."
The most potential market for business jets within the Middle East is Saudi Arabia, which holds about 37 percent of the market potential in the long term, followed by the United Arab Emirates (UAE) with nearly 24 percent of the market potential.