Aviation in the Gulf region
As the balance of global aviation gradually shifts away from the traditional markets such as Europe and the United States, the GCC (Gulf Cooperation Council) aviation industry is emerging as one of the centers of the sector worldwide. Having grown steadily over the last two decades, the GCC’s aviation industry has outperformed most of the other regional markets.
The commercial activity in the sector has resulted in excellent national airlines such as Emirates Airline, Etihad Airways, and Qatar Airways emerging successful at an international level. Being strategically located at approximately an 8-hour flying distance from 2/3 of the world’s population, the Gulf acts as a central aviation hub and a key link between the Eastern and the Western world. In recent years, passenger traffic growth of airports like Dubai, Doha and Abu Dhabi by far outpaced that of the traditional hubs such as Hong Kong, Amsterdam, Frankfurt and London.
Between 2012 and 2032 growth in air passenger and cargo traffic in the Middle East is expected to outperform all other regions in the world. The geographic location combined with the fleet expansion and the expanding airport infrastructure are some of the key growth drivers.
A growing aviation sector also means a growing aviation industry. This growth fits the ambitions of the Gulf to play a role in the supply chain of aircraft builders such as Airbus and Boeing. It also demands a growing aircraft maintenance industry.
As a major buyer of new aircraft Middle Eastern airlines and governments have an excellent negotiating position towards aircraft builders in establishing and strengthening a local industry, in both the manufacturing industry and the aircraft maintenance industry.
GCC market overview
Over the last decade, the Gulf has been making the most of its favourable geographic location by complementing it with state-of-the-art airport infrastructure. The result is its deep-rooted standing as a global aviation hub. Particularly basking in this glory are the UAE and Qatar with their sophisticated airports at places such as Dubai, Abu Dhabi, and Doha. It is therefore no surprise that these countries house the fastest growing carriers of the world, namely Emirates Airline, Etihad Airways, and Qatar Airways. The Dubai International Airport is the largest airport of the GCC, and one of the world's busiest airports by passenger traffic.
The UAE and Saudi Arabia are the 2 key aviation markets in the region, together constituting approximately 73% of the total fleet size in the GCC aviation sector. Air Arabia, flydubai and Jazeera Airlines are the low cost carriers (LCCs) of the region, while the remain are full service carriers (FSCs).
The major commercial airlines of the GCC region include:
• UAE: Emirates Airline, Etihad Airways, Air Arabia, and flydubai
• Qatar: Qatar Airways
• Saudi Arabia: Saudi Arabian Airlines (Saudia) and flynas
• Bahrain: Gulf Air
• Oman: Oman Air
• Kuwait: Kuwait Airways and Jazeera Airlines
To leverage the geographical advantage, the governments of the Gulf countries are making significant investments towards the improvement and expansion of their airport infrastructure. The on-going extensive expansion of key airports of the Gulf is expected to increase their contribution to the global airfreight volume.
Dubai has emerged as the major air cargo hub of the Gulf Region, mainly due to its world class infrastructure. Both its airports, Dubai International Airport and Dubai World Central, are capable of facilitating fast transit of freight from sea to air. They harbor the capability to transfer full container loads between the quayside at Port Rashid or Jebel Ali to the Dubai International Airport, or vice versa, within as little as 6 hours.
The Midfield Terminal Complex (MTC) is the centerpiece of the multi-billion dollar development program by the Abu Dhabi Airports Company (ADAC) at Abu Dhabi International Airport. It is part of Abu Dhabi’s broader plans to increase tourist traffic as mentioned in its Vision 2030 strategy to diversify the economy. Upon completion in 2017, the Midfield Terminal will increase the airport’s passenger capacity to more than 30 million per year.
The MRO segment of the GCC aviation sector has transformed with time. Until some years ago, there were only a few standalone MRO service providers in the region. Most line maintenance activities were performed by the in-house maintenance division of national carriers, while heavy maintenance activities were outsourced. However, the entry of foreign players and high government investment in the sector has changed the market structure significantly.
GCC-based key MRO companies
• UAE: Abu Dhabi Aircraft Technologies (ADAT), Emirates Engineering, Dubai Aerospace Enterprise
• Saudi Arabia: Alsalam Aircraft Company, Saudia Aerospace Engineering Industries