The Middle East aviation sector is poised for significant, sustained growth, according to the chief executive officer of Air Arabia, the first and largest low-cost carrier (LCC) in the Middle East and North Africa (Mena).
Currently accounting for eight per cent of the global air transport industry, Middle East-based airlines are collectively growing at 10 per cent annually, double the global average of five per cent, Adel Ali said, quoting a report by the Arab Air Carriers Organisation (AACO).
Worldwide one in every eight commercial flight is now flown by an LCC and the Middle East will experience strong growth in the low-cost sector in the coming years, he said.
“The Middle East is home to the youngest fleet in the world, with a total of more than 600 aircraft, and has the greatest number of aircraft on order anywhere in the world. From the Gulf to the Levant, the sector is also experiencing unprecedented demand, with load factors averaging nearly 80 per cent.
“The region is currently experiencing enormous economic growth and there is a strong correlation between such growth and increased passenger traffic,” he said.
“Consider the demographics of the region, where 100 million people are under the age of 24 and millions are expatriates, and it becomes clear air travel will increasingly be seen as a necessity rather than a luxury. Indeed, between now and 2020 the Middle East is forecast to lead world passenger traffic growth, with current travel demand up 18 per cent.”
While demand is increasing across the sector, Ali said the outlook for LCCs is bright. “By adapting the globally proven LCC model to the needs of this region and focusing on providing the highest level of service at the most affordable fares, Air Arabia continues to be the regional low-cost leader.
“Air Arabia is experiencing record growth – in passenger numbers, aircraft utilisation and profits – and setting the market benchmark,” Ali said.
Air Arabia, listed on the Dubai Financial Market, commenced operations in October 2003 and currently operates a fleet of 11 new Airbus A320 aircraft, serving 37 destinations across the Middle East, North Africa, Indian Subcontinent and Central Asia through its main hub in Sharjah.
The Middle East aviation industry will continue to enjoy a good 2008 with profits remaining stable at $200 million (Dh735m), according to International Air Transport Association’s (Iata) projections for the next year.
With the region’s international traffic (or passenger growth) growing at a phenomenal seven to eight per cent of the total world market, the Middle East is gaining market share, Iata’s director-general and CEO said. It comes as no surprise that Iata expects this region to continue to be the fastest growing region in the coming year.