More than $100bn-worth of airport projects are underway and planned across the Middle East, according to the Aviation and Airports 2016 report from business intelligence service MEED.
The report says the projects are intended to address a capacity gap as regional airport passenger volumes outstripped capacity by 11 per cent last year. The projects will provide an additional capacity of 400 million passengers a year across the region’s airports over the next 10 to 20 years.
The new and expanded airports, including the Muscat International, Midfield Terminal Complex (Abu Dhabi), King Abdulaziz International (Jeddah) and the new passenger terminal at Bahrain International are expected to be completed between the end of 2016 and 2020.
“The largest potential for contracting and sub-contracting companies are expected to come from the construction of the next phase of Al-Maktoum International in Dubai, the further expansion of Jeddah airport, Hamad International airport expansion, and the upgrade of airports in Iran,” said MEED.
“Travel demand, as reflected by double-digit average annual growth in most airports’ passenger volumes since 2010, and the overall economic expansion programmes prior to the oil price decline have fuelled the rapid expansion in aircraft fleet and airport capacity. Going forward, the staging of global events such as the Dubai Expo 2020 and 2022 Fifa World Cup in Qatar are also expected to boost the region’s profile as a travel and tourism destination.”
The report also says the projected increase in passenger traffic will necessitate new airplanes. The report says close to 1,300 aircraft worth an estimated $345bn are on order and pending delivery from Middle Eastern airlines.
“While Dubai’s Emirates Airline, Abu Dhabi’s Etihad Airways and Qatar Airways lead the region in terms of the value of on-order planes, most of the smaller airlines have put in place restructuring programmes to enable them to contribute to the expansion of each state’s economy in view of lower oil income and increased urgency to diversify their economies away from oil,” said MEED.
However, the report warns that despite sterling growth in recent years, there are early signs that growth in the region’s aviation sector could potentially slacken as the global economy slows and drags travel demand along with it. “Other threats include political instability in many parts of the region, lack of state funding for future projects, as well as limited airspace allocation.
These threats require adjustment in policies as well as a concerted effort between government and private stakeholders across the region. “