Jetrader - November/December 2012 - 14

India, Middle East-based LCCs face ﬁnite obstacles to perpetual growth in the form of neighboring countries that have not liberalized their air services or are facing political upheaval. This may mean the next phase of growth for these carriers will involve expanding into areas such as Russia and East Europe, where demand for travel is relatively robust. According to an April 2012 review of the Middle East LLC sector by the Centre for Asia Paciﬁc Aviation: “Between them, regional LCCs operate close to 75 aircraft,

with around another 100 on order, a ﬁgure that will likely grow only moderately in the near future….LCCs in the region account for around 10 percent of all regional seating capacity: 11.8 percent of intra-Middle East capacity and 8 percent of seats to and from the region.”

Tourist Trafﬁc
The third driver is airline business among more traditional national carriers not based in the Gulf and whose development policies are tied to national gross

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domestic product (GDP) rates and tourism. Here the picture is slightly more positive than negative, despite the upheavals in Syria and Libya. Tourists are returning to North Africa in increasing numbers, according to ﬁgures published in September by the United Nations World Tourism Organization (UNWTO), which recorded healthy 11 percent rise in tourist numbers to North Africa for the ﬁrst six months of the year, with Tunisia seeing annual rises of 48 percent between January and May and Egypt 29 percent over the same period. “These are long-standing tourism destinations ready to fully welcome back the millions of tourists that each year chose to visit them,” said UNWTO Secretary-General, Taleb Rifai. But even Gulf state airlines are not immune to political upheavals. Bahrain’s Gulf Air, for example, has undergone a costcutting process as increasing competition from Gulf state rivals and recent political troubles have hit proﬁts. But the long-term trends for the region remain robust. ICAO is forecasting annual average growth rates by Middle East airlines will be 9.5 percent, the highest in the world, between 2011 and 2014 and 5.8 percent to 2025. Airbus’s latest forecast for aircraft deliveries, released in September 2012, suggest Middle East carriers will take delivery of 2,370 aircraft between 2012 and 2031 in a market worth $470 billion, over half of which will be twin-aisle and very large aircraft serving long-haul markets. “Middle East carriers often prefer to renew their ﬂeets on a 15-year cycle, a shorter cycle than the global average,” says the Toulouse-based aircraft manufacturer. “Thus, of the 2,370 forecast airplane deliveries to the region, about 30 percent will replace older airplanes, leaving 70 percent for the region’s ﬂeet growth.” And another positive indicator of the robust Middle East airline market was the performance last year of Saudi Arabia where, despite the uncertainties in the region caused by the Arab Spring, airline passenger numbers rose 13.6 percent over 2010 to 54 million. More than 40 percent of workers in all Gulf Cooperation Council countries (the United Arab Emirates, Saudi Arabia, Kuwait, Oman, Qatar and Bahrain) are expatriates, so when the economies of these countries thrive there is an inevitability of increasing passenger numbers.

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ofﬁcial publication of the International Society of Transport Aircraft Trading 23/04/12

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Jetrader - November/December 2012

Table of Contents for the Digital Edition of Jetrader - November/December 2012
