95 regional aviation infrastructure projects earmarked for 2018
The GCC aviation sector will continue to ride high due to large airport construction projects with estimated total value of 95 listed projects reaching US$49bn (AED180bn) in May 2018, according to BNC Network, the largest project intelligence provider in the MENA region.
Among these, 68 projects worth US$45bn (AED165bn) are airport terminal projects while 27 projects worth more than US$3bn (AED11bn) involves hanger, runway and ancillary facilities.
A new greenfield airport project at the north of Kuwait City with a project development value of US$12bn leads the list of the major airport projects in the GCC.
“The expansion of the airline fleet will put additional pressure on the region’s aviation infrastructure in the future. Therefore the investment in airport capacity expansion as well as the development of new airports will help manage the future demand of air traffic,” commented Avin Gidwani, CEO, BNC Network.
The airport projects are broadly in line with the development of the region’s aviation sector that is led by the two UAE carriers – Emirates Airline and Etihad Airways as well as other leading regional airlines such as Saudi Arabian Airlines, Qatar Airways, Gulf Air, Kuwait Airways, Air Arabia, Fly Dubai and Oman Air.
Additional aircraft
Airbus recently said in its Global Market Forecast, the fleet size of carriers in the Middle East will more than double from 1,250 to 3,320 aircraft over the next two decades.
“The Middle East will need 2,590 new aircraft by 2036, for replacement of 520 older generation aircraft, and 2,070 aircraft for growth, 730 are expected to remain in service over the period,” the Airbus report continued.
The future demand for the Middle East’s fleet is valued at $600bn from a total market value more than US$5 trillion, Airbus forecast said. The current orders from Middle East-based carriers stand at 1,319 aircraft, of which 687 are single-aisle, 409 twin-aisle and 162 very large aircraft.
UAE aviation economy on the upswing
The report said passenger traffic to, from and within the Middle East will grow 5.9% annually until 2036, well above the global average of 4.4%. While traffic between traditional markets will grow at a steady rate, the highest growth is expected to be on routes to Latin America (8.5% annually to 2036).
The aviation sector’s contribution is visible in Dubai economy that is powered by the aviation and tourism sectors, primarily driven by the growth of Emirates Airlines and Fly Dubai.
The aviation sector is a crucial economic pillar for Dubai, accounting for more than 27% of Dubai’s GDP, or US$26bn, according to Oxford Economics. This is expected to increase to more than 37% by 2020 with a total annualised impact of US$53bn.
In the next 20 years, the UAE’s aviation sector is expected to stand next to that of the US and China, according to Jeff Johnson, Vice President of Boeing International and President of Boeing Middle East.
UAE would need more than 55,000 pilots and 62,000 technicians in the same period as a result of its growing aviation industry. Looking at the Middle East, 3,000 aeroplanes are set for delivery in the next 20 years, triple the current capacity.
ME airline profits set to rise
While airlines in the Middle East are forecast to see net profits improve 100% to US$600mn in 2018, up from US$300mn in 2017, global aviation industry net profit will rise to more than US$38bn in 2018, an improvement from the revised US$34bn expected net profit in 2017, according to Alexandre De Juniac, Director-General and CEO of International Air Transport Association (IATA).
According to IATA, the Middle East’s aviation market is forecast to grow 5% annually until 2036. Predictions show the sector will witness additional 322mn passengers a year on routes to, from and within the region and the total market size will expand to 517mn passengers over this period.
The Middle East gained a 5% share of the global aviation market in 2017, flying 206mn passengers, an increase of more than 9% over 2015.
Table 1
GCC Airport Projects
| Subject | No. of projects | Value (in US$bn) |
| Airport | 68 | 45 |
| Hangar facility | 9 | 2.0 |
| Runway and Ancillary Facilities | 18 | 2.0 |
| Grand Total | 95 | 49.0 |
Table II
Top GCC Airport Projects
| Project Name | Value (in USbn) | Stage | Target | Nation |
| New Kuwait Airport | 12.0 | Concept | 2022 | Kuwait |
| Kuwait International Airport (KIA) Expansion of Passenger Terminal | 4.6 | Construction | 2022 | Kuwait |
| Abu Dhabi Int’l Airport Expansion Midfield Terminal Building (MTB) | 2.94 | Construction | 2019 | UAE |
| King Abdulaziz International Airport Expansion Jeddah Phase 2 | 2.0 | Concept | 2025 | KSA |
| Al Maktoum International Airport Expansion DWC Phase 2 | 2.0 | Concept | 2025 | UAE |
| King Abdulaziz International Airport Expansion Jeddah- Phase 1 | 1.85 | Construction | 2018 | KSA |
| King Khalid International Airport Expansion Riyadh, Terminal 3 & 4 | 1.8 | On Hold | 2022 | KSA |
| Al Maktoum International Airport Expansion DWC Phase 1 | 1.5 | Construction | 2018 | UAE |
| Madinah Airport Expansion- Phase 2 | 1.2 | On Hold | 2019 | KSA |
| Bahrain International Airport (BIA) Terminal Expansion | 1.1 | Construction | 2019 | Bahrain |
| Bahrain International Airport (BIA)
Airport Modernisation Programme |
1.1 | Construction | 2020 | Bahrain |
| Qunfudhah Airport | 1.0 | Design | 2022 | KSA |
| Taif International Airport | 0.855 | Construction | 2020 | KSA |
