Sharjah, Asharq Al-Awsat- The Middle East is set to experience strong and sustained growth in passenger traffic, according to “Global Market Forecast,” a recently released research report by Airbus. The report, which examines worldwide aviation trends through 2025, identifies the Gulf region as a newly emergent hub for international air travel.
The Airbus report predicts that Middle East passenger traffic will grow at an annual rate of 7.1 per cent through 2015, compared to a global average of 5.3 per cent. From 2016-2025, Airbus predicts that Middle East passenger traffic will continue to grow at 5.2 per cent, compared to a global average of 4.4 per cent. Over a 20-year period, that is 2006-2025, Airbus predicts a robust average growth of 6.2 per cent.
“The Middle East is not only growing because of its own economic development, but is also benefiting from having three major and rapidly developing markets in its own backyard: Russia, Eastern Europe and India,” say the authors of the report. “The dynamism and entrepreneurial spirit of the region is now [also] bringing tourism and business traffic in its own right, representing half of the arrivals in the UAE and Qatar.”
The report further states that “Trend setting airlines from the region have successfully taken advantage of the region’s location to attract international passengers on their way from Asia to Europe and Africa. Both tourism and business traffic to the entire Middle East has grown at a steady pace.”
Pointing to the findings of the Airbus report, the Chief Executive Officer of Air Arabia, the Middle East and North Africa’s first low-cost carrier, said that they provide strong support for the carrier’s own long-term growth strategy. Adel Ali said: “This report confirms our own findings which show that passenger traffic through the Gulf will remain on an upward curve for the next two decades. In particular, as the Airbus study highlights, traffic between the Gulf and Russia, Eastern Europe and India will witness significant expansion. It is no coincidence that these three regions feature prominently in our own growth plans.”
He continued: “Current 6.3 per cent annual growth in passenger traffic between India and the Gulf, as stated in this report, is of special significance to Air Arabia, which flies to more than six destinations in that country. In the Middle East itself, domestic and intra-regional passenger traffic is also growing strongly, at a predicted annual rate of 6.4 per cent through 2015. Here, too, there is a clear confluence between the findings of the Airbus study and Air Arabia’s own expansion strategy.”
The Airbus report states that aviation industry has been driven by strong economies, new entrants, large emerging markets and increasing liberalization at a time when the fuel prices were at the highest, highlighting the resilience of the industry. New entrants have added a significant amount of additional seat capacity and network airlines have succeeded in responding to the strong demand through dramatic aircraft productivity improvement, which has contributed significantly to their financial recovery. In the future, low cost carriers are expected to continue growing around the world.
The Sharjah-based Air Arabia, which began operations in October 2003, will become the first airline in the Gulf region to go public when it launches an Initial Public Offering (IPO) in the near future. Having served more than 3.4 million customers since it began operations and currently serving 33 destinations, Air Arabia has been profitable since its second year of operations.