Aviation: despite the global recession taking its toll on world aviation, the industry in the Middle East region is showing positive signs of expansion and profitability.

Author:Seymour, Richard
Position:SPECIAL FOCUS
 
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According to the International Air Transport Association (IATA), global passenger traffic fell by approximately 1% last August. In the Middle East, however, there was an increase of nearly 11%. Freight traffic fell across the board by almost 10%, whereas in the Middle East, it increased by 3%. This is a common theme for the industry over the last few years.

The high oil prices which drove the Gulf states' economies saw billions of dollars invested in airport expansion over the last decade to accommodate the projected increase in demand for flying.

According to the Streamline Marketing Group, the next 20 years will see the region spend $40bn on airport expansion, with the UAE responsible for half of that outlay. Some estimates say that around $1.5 trillion is either being spent now or is being planned to be spent on regional aviation infrastructure.

One area of potential for the industry is the largely untapped low-cost airline market. There are millions of expatriate workers in the Middle East. Thirty-five million live and work in the six Gulf Cooperation Council (GCC) countries alone, with 5.5 m from India.

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All of them would like to fly home more often than the premier airlines' prices allow them to do. A no-frills airline offering cheaper fares would, therefore, prove popular.

In 2007, Emirates Airlines ordered more than $20bn worth of aircraft from Airbus and Boeing, and put their name down for an option on 50 more.

Passenger numbers

Separate from Emirates Airlines group, the new airline, launched in mid-2009 as 'flydubai', will initially fly to destinations within 4-5 hours of Dubai, which casts its net over 2bn people in destinations which include Beirut, Damascus, Alexandria and, from December 2009, Bahrain and Kathmandu.

Speaking before the launch of the airline, flydubai's chief executive, Ghaith al Ghaith, said that the simplified, no-frills approach will extend to all areas of the passenger experience: "We will focus on keeping things simple and flexible. We want to make it easy for our customers to interact with us, and to have more control in how they book, purchase and select value-added services to their basic fight experience."

The UAE's Minster for Economy and Chairman of the General Civil Aviation Authority Board, Sultan Bin Saeed Al Mansouri, has revealed that the success of flydubai has reached beyond the Emirates' aviation industry. The recently added destination of Baku in Azerbaijan has furthered relations between the two countries, who have already signed agreements worth hundreds of millions of dollars in recent years, based on the development of economic, commercial and technical...

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