Shell: high regional growth expected in aviation and jet fuel business
Aviation industry experts are projecting a significant growth in the in aviation and jet fuel business in the Arab region, which will reflect positively on the $12 billion jet fuel supply industry.
The Middle East consumes eight to 10 percent of global demand for jet fuel and the key differentiator between suppliers has become the quality of service and after-sales support, reported Shell Aviation.
Growth rates in the Middle East aviation industry are higher than anywhere else in the world, with the exception of the Far East. Shell Aviation's General Manager for the Middle East, Central and South Asia Mike Lumley said: “We see the Arab World in particular as being one for the few regions in the world where the Revenue Passenger Kilometers (RPKs), are growing at a significantly higher rate than regional GDPs. This can only be good news to the industry and indicates significant 'pent-up' demand which is not yet fully satisfied .”
RPKs are the key measure used by airlines in revenue management and measure the number of kilometers flown for which they receive passenger revenues.
On average, the annual growth rate (aagr) in RPKs in the Middle East region between 1990 and 2000 was 6.2 percent, compared to 4.5 percent worldwide. Passenger growth rate in 2003, compared to 2002 is expected to be 7.5 percent and has rebounded solidly after the significant dip experienced during the ground war in Iraq.
Growth in aviation jet fuel in the region is also expected to hit the 4.5 percent mark in 2003 compared to 2002, and will continue to achieve a steady growth of 4.5 to five percent annually, according to Lumley. The $70 billion global jet fuel industry will see no overall growth in 2003 as a consequence of the SARS epidemic and the continued decline in long haul transatlantic traffic.
Shell Aviation, which will have a big presence at Dubai Airshow 2003, said that the rapid developments that the Arab aviation industry is undergoing at the moment would create a new stimulus for generating more demand, and thus further grow the market.
“We see new regional airlines developing interesting niche markets, and if they get their business model right the way Ryanair and easyJet did in Western Europe, they will find a unique place for themselves amongst the bigger players and have the potential to further stimulate market growth.” — (menareport.com)
© 2003 Mena Report (www.menareport.com)
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