The resource-rich Gulf is rapidly becoming a major player in the global aviation market with massive new investments across Qatar, Saudi Arabia and the UAE. And with good reason: according to the International Air Transport Association, Middle East passenger traffic is forecast to double in the next 20 years, climbing to 530 million passengers by 2043.
The Gulf's geographic position makes it an ideal aviation hub, with 80% of the world's population reachable within an eight-hour flight. According to Airbus, traffic between the Middle East and Asia is expected to increase three-fold by 2042, and more than double between the Middle East and Europe.
So, it is no surprise that the Gulf states are strengthening their positions and setting new benchmarks in the aviation industry. New airports, bigger capacity, new aircraft and state of the art facilities are all part of the plan to turn the Gulf into a global travel and business hub.
Qatar, which already has a strong reputation in the aviation industry, expanded Doha's Hamad International Airport (HIA) in advance of the FIFA World Cup 2022 to accommodate more than 58 million passengers annually. It has seen a huge increase in passenger numbers with monthly figures now exceeding four million thanks to an expanded network that now includes partners such as Japan Airlines, Garuda Indonesia, China Southern Airlines and Akasa Air. These follow the arrival of Iberia, Xiamen Airlines and Vistara to the airport's network late last year.
HIA is also upgrading its aviation infrastructure with advanced air traffic management systems such as the Long-Range Radar (L-BAND) and Medium-Range Radar (S-Band), which will improve the coverage and efficiency of airspace management.
There's also been massive investment in Qatar and regionally into new aircraft with huge orders to modernise the fleet and meet future travel demand. As well as increasing operational capacity these will also help achieve sustainability goals by introducing more fuel efficient and environmentally friendly aircraft.
Dubai, which is already home to the world's busiest airport by international traffic, has started work on an even larger airport. Last year, Dubai International Airport (DXB) handled 86.9 million passengers and retained its crown as the world's busiest international hub for the tenth year running. At the same time, tourism in the emirate is mushrooming, with 17.15 million international arrivals last year, up from 16.73 million visitors in 2019, according to Dubai's Department of Economy and Tourism.
DXB is connected to 262 destinations across 104 countries through 102 international carriers. India was DXB's top destination country in terms of traffic with 11.9 million passengers last year, followed by Saudi Arabia with 6.7 million, the UK with 5.9 million and Pakistan with 4.2 million.
But options for expansion of DXB, which is less than three miles from the city centre, are limited by nearby residential developments and infrastructure. The answer is a huge USD35 billion expansion of Dubai's second largest airport, to make Al Maktoum International Airport (DWC), which lies 35 miles away outside the city, into the emirate's main international airport within a decade.
Once completed this airport will have five runways and five terminals and capacity to handle up to 260 million passengers a year, making it the world's largest airport. DWC will also be able to process 15 million tons of cargo annually via a multi-modal cargo hub enabling air, land and sea connection with dedicated freight storage space on the airside, landside and by the seaport.
These facilities will support the growth of the nearby Logistics District, planned as an international base for global cargo and shipping companies, and is part of the bigger Dubai World Central (DWC) initiative to create a self-sustained economic zone that will strengthen Dubai's position as a global hub for aviation, logistics and business.
Neighbouring Saudi Arabia has equally big plans. The Kingdom aims to triple its passenger numbers to 330 million by 2030, connecting to over 250 destinations and increasing air freight to 4.5 million tons a year.
Last year, it announced a USD31 billion expansion plan for King Abdulaziz International airport (KAIA) in Jeddah to increase its capacity to 114 million passengers a year by 2035, while the King Khaled International Airport (RUH) in Riyadh will increase its capacity to 40 million passengers by 2038.
The upcoming USD30 billion King Salman International Airport (KSIA) in Riyadh aims to accommodate up to 120 million passengers a year when it opens in 2030 and 185 million passengers, with the capacity to process 3.5 million tons of cargo, by 2050.
All these airport upgrades and expansions in the Gulf are doing more than just increasing capacity; they're making the region more accessible. With the new and expanded airports, airlines are adding more routes and destinations making it easier for tourists and business travellers from all over the world to explore what the Gulf has to offer and connect to more international destinations.
They will also create a growing demand for aviation-related services, including maintenance, catering and logistics services, ground handling, security and aircraft fuelling.
Beyond the runway, as these airports grow and more tourists arrive, there will be a ripple effect across various industries. Tourism will boost hotels, restaurants and retail shops and will create demand for hospitality services and new retail opportunities. Real estate will also benefit with demand for commercial spaces to accommodate new businesses and residential properties for the growing workforce.
The growth of the aviation sector in Qatar, the UAE and KSA is a long-term boon for the region's economies and presents many business opportunities. If you want to expand your business in this fast-growing sector, Sovereign PPG can help you through the complexities and enable you to capitalise on growth across the Gulf region.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.