The Middle East will be one of aviation’s more compelling growth stories over the next 10 years as the region transforms itself into an airline powerhouse, an analysis of Aviation Week Intelligence Network data shows. The region stands to reap the benefits of its geography and changing traffic flows to punch far above its weight in the industry.
Capacity, measured in available seat miles, in the Middle East now represents just under 9% of the world’s total, but this is expected to grow to 11% by 2021, to 737 million ASMs, the data show. Of this, 119 million ASMs will be narrowbody capacity, while 611 million will be widebody capacity. The growth story is in the widebody capacity, the data show. This is expected to grow from 276 million now.
Data from the(IATA) corroborate this view. Middle East traffic is expected to grow at a compound annual growth rate (CAGR) of 7.9%, compared with the worldwide traffic CAGR of 5.8%.
predicts Middle East carriers could take delivery of as many as 2,520 aircraft by 2030, more than half of which will be twin-aisle or very large aircraft.
This growth comes in a region that is expected to total less than 6% of the world’s population, according to the United Nations. Although the region’s population is young and growing faster than the world’s average, it is still expected to be just over 400 million by 2030, the U.N. data show. GDP is expected to grow by 4.1%, compared with the world’s average of 3.3%, according to U.S. government data.
Carriers such as Emirates, Qatar andare taking advantage of a few dynamics, industry observers say. The first and foremost is the Middle East’s geography. “It helps to have India on one side and Europe on the other,” an IATA spokesman says.
William Swelbar, an economist at the Massachusetts Institute of Technology’s department of aeronautics and astronautics, elaborates. “Within 4,500 nautical miles of the Middle East is 86% of the world’s population and 63% of the world’s GDP,” he says. “The Middle Eastern carriers are today whatand Singapore were 20 years ago,” he adds. “These are small countries that appreciate the benefit of trade.”
The skew toward widebodies will facilitate connecting traffic between Europe and North America and Africa, Asia and Australasia, says Swelbar. “If I were running a European legacy carrier, I would be concerned about how the traffic flow is changing.”
The revolutions of the Arab Spring, which continue to roil parts of the region, so far have not spread to the UAE or to Qatar. These revolutions could affect intra-region traffic, but may not have a direct effect on the connecting traffic flows, Swelbar adds.