Arab region fast becoming “Next-Gen Aviation Centre of the World”

Published March 3rd, 2009 - 08:59 GMT

Aviation experts, who convened in Abu Dhabi today to discuss the future of the Middle East Aviation industry in the still unfolding global economic crisis, were bullish about the region’s prospects citing the underlying issues, trends and recent growth patterns as some of the reasons for this outlook. They believe that the Middle East aviation sector is set to soar.


The 2nd Middle East Aviation Outlook Summit organized by Terrapinn, a leading global  business media company, unveiled results of the Centre for Asia Pacific Aviation (CAPA) report which declared that the region “will be growing while others are stagnating.”


“The Middle East is poised to shine,” according to CAPA report. Hifazat Ahmad, General Manager of Terrapinn Middle East said: “What we heard today from global and regional aviation industry leaders was candid and bold. The good news is it was also positive. The reasons for rapid growth in the aviation sector are somewhat complex, but almost all agreed that the overall future outlook is upbeat. This youthful region is to shape the growth of the future of aviation.”


Peter Harbison, Chairman of CAPA who will chair the Summit of the conference, said: “A picture emerges of a potentially remarkable and long-term sustainable growth path in the Middle East, rather than an excessive, unplanned, over-hyped bubble which is about to burst, as many outside the region, and some within, may believe.


“Whatever happens in the remainder of the world, there are still strong indications that the region will continue to support strong levels of traffic growth. This applies both to long-haul, hub services and short-haul, point to point operations,” he observed.


The rapid growth in the aviation sector is expected to continue and will be supported by the region’s underlying economic growth and regional commercial development. The strategic geographic location, adoption of new technology and regulatory issues are some of the other reasons for this outlook.
“A vibrant aviation sector is a key factor in the diversification of Middle East economies and plays a key enabling role for many other sectors, including the growing financial services and tourism industries.”


Because of the importance aviation assumes in several nations’ economic diversification strategies, several of the region’s players have been undertaking large-scale expansion, injecting billions of dollars into fleet renewal, airport augmentation and tourism-related infrastructure projects.


Peter Harbison remarked: “The region’s geographic situation is merely good fortune; but it is by adding the other two ingredients that a powerful recipe for growth is created. With new generation aircraft technology, Arab airlines now have the ability to access any point in the world non-stop. Combined with the simultaneous easing of market access, this makes one-stop global travel increasingly possible.

He added: “There is however an additional but vital catalyst which converts the potential of these ingredients into immediate growth: sophisticated management of the aviation and tourism supply chain. Some countries in the region have elevated that art to a new level, greatly assisting the process of expansion. In brief, the region is fast becoming the ‘Next-Gen aviation centre of the world’.”


He explained that as the world, led by the US and the UK, is slumping into economic decline, it would be wholly unrealistic to believe that the United Arab Emirates, along with every other country, will be immune from the global credit crunch and the economic downturn. However, the region and the Gulf in particular have shown a resilience that is absent from many other markets. Furthermore, there are indications that the premium sector has held up much better than in other parts of the world and its market share is soaring. “The region is not immune to financial constraints, but well supported,” he noted. 


“The timing of this downturn probably comes at an almost ideal time for the expansion of some of the leading airlines in the region, as they consolidate their positions in a global order.


“A continuing expansion of each of the Gulf carriers through negative economic conditions, while many competitors cut back, has both short and long term implications. But, as the world economy starts to pick up, the advantages of having maintained a strenuous delivery schedule will start to show through. The region’s airlines will then possess younger and more fuel efficient fleets, positioning them well to capitalise as markets resume growth,” he concluded.


The Aviation Outlook Summit event, which continues to 5 March at Beach Rotana Hotel and Towers in Abu Dhabi, includes participants from the world’s top airlines including Etihad, Oman Air, Turkish Airlines, Wataniya, Royal Jet, Gulf Air, Air Arabia, Sama, Jazeera Airways, Airblue, Kingfisher, Air Asia X, Kuwait Airways and Mihinlanka Airlines and Virgin Blue. It also features Leaders from the Middle East’s foremost airports authorities including Abu Dhabi Airports Company (ADAC) Oman Airports Management Company and Cairo Airport Company.

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