Wednesday, December 20, 2017

Strong growth predicted for Mideast aviation

Despite a strong headwind of global economic turbulence and fluctuating oil prices, Trumponomics and Brexit, the Middle East will see strong passenger growth in 2018 with an expected annual increase of 7 per cent, according to figures from International Air Transport Association.

Aviation will feature heavily in the programme at Arabian Travel Market (ATM) 2018, which is being held between April 22-25, 2018 at the Dubai World Trade Centre. The sessions at ATM 2018 will be moderated by Alan Peaford, a former national newspaper journalist and current president of the UK’s Institute of Internal Communications. Peaford edited Flight International’s Flight Daily News for 17 years and has won an Aerospace Journalist of the Year award on five occasions.

He said: “Aviation and aerospace is thriving despite lower oil prices. Even with regional uncertainties aviation continues to grow. The Arab air transport market grew by 9.9 per cent in the past year, according to the Arab Air Carriers Organisation (AACO) at its 2017 AGM. Growth figures like these should support lively debate at ATM 2018 and provide an element of cautious optimism.”

Iata figures also revealed that Middle East airlines will see net profits doubling to $600 million in 2018, double what they are estimated to make this year. Passenger capacity is also estimated to rise by 6.6 per cent this year and a further 4.9 per cent increase is forecast for 2018.

The Emirates Group which is, one of Arabian Travel Market’s premium partners, had a revenue of Dh49.4 billion ($13.4 billion) for the first six months of its 2017-18 financial year, up 6 per cent from Dh46.5 billion ($12.6 billion) during the same period last year.

However, Etihad Airways bucked the trend in July when it posted a group loss of Dh6.86 billion ($1.86 billion) for 2016. The figure was heavily influenced by one-off impairments that included Dh3.67 billion ($999.1 million) on aircraft and Dh2.96 billion ($805.8 million) on exposures to the ailing carriers Alitalia and Air Berlin.

Air Arabia saw profits rise in this year's second quarter, up 21 per cent to Dh157.93 million ($42.9 million) from the same period last year, although revenues were flat, rising 1.3 per cent to Dh907.23 million ($246.9 million). But Flydubai reported losses of Dh143.24 million ($38.9 million) on revenues of Dh2.5 billion ($680.6 million) for the first half of 2017.

Simon Press, senior exhibition director, Arabian Travel Market, said: “As this mixed bag of results demonstrate, there are continued challenges to be faced by the aviation sector in the Middle East. This includes the US Supreme Court’s decision to back President Donald Trump’s third travel ban, blocking the entry of travellers from Chad, Iran, Libya, Somalia, Syria and Yemen.

“President Trump’s protectionist agenda may also impact the Open Skies Agreement which US airlines have campaigned bitterly against for several years.”

The success of the aviation industry in the sky is matched in the Middle East by the continued huge infrastructure investment.

The total value of 152 active aviation-related projects in the Middle East reached $57.7 billion at the end of April 2017, according to research provider BNC Network.

In the GCC countries, Saudi Arabia accounted for the largest share of project value (at 46 per cent of the GCC’s total), followed by the UAE (26 per cent), and Kuwait (12 per cent).

The Gulf region’s aviation projects also accounted for 72 per cent of the total estimated value for all aviation projects in the Middle East and North Africa.

“Aviation is integral to the Arabian Travel Market show and plays a significant role not only during the seminars but also on the exhibition floor. With strong investment prevalent throughout the industry in the region, the growth in passenger numbers will continue unabated,” added Press.

Confirmed exhibiting airlines for ATM 2018 include Etihad Airways, Fly Dubai and Saudi Airlines with more major players to follow.

ATM 2018 has adopted Responsible Tourism as its main theme and this will be integrated across all show verticals and activities, including focused seminar session, featuring dedicated exhibitor participation.

ATM – considered by industry professionals as a barometer for the Middle East and North Africa tourism sector, welcomed almost 40,000 travel professionals to its 2017 event, including 2,661 exhibiting companies, signing business deals worth more than $2.5 billion over the four-day show. - TradeArabia News Service

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