Commercial aviation is a critical component of the Saudi economy, providing 1.8 percent of the Kingdom’s GDP or SR30.2 billion annually, a study commissioned by the International Air Transport Association (IATA) and completed by Oxford Economics, said.
Accounts for 1.8 percent of Kingdom’s GDP, provides some 152,000 jobs
The study was presented to Prince Fahad Al-Abdullah, President of the General Authority for Civil Aviation (GACA) and Chairman of the Board of Saudi Arabian Airlines, by Tony Tyler, IATA’s Director General and CEO who is visiting Saudi Arabia.
Moreover, aviation is a quality employer, providing work for some 152,000 people in the Kingdom, the study said, adding that the productivity of these jobs is 1.8 times higher than the average for Saudi Arabia.
Besides, aviation-enabled tourism in the Kingdom employs a further 139,000 people and supports some SR23.6 billion of economic activity annually, the report said.
In total, aviation and aviation-enabled tourism accounts for 3.2 percent of Saudi Arabia’s GDP
In total, aviation and aviation-enabled tourism accounts for 3.2 percent of Saudi Arabia’s GDP and 3 percent of employment, the study noted.
“Aviation is a force for good in our world. The industry has turned our planet into a global community by connecting people to business, bringing products to markets, facilitating journeys of discovery and uniting families and friends. This has a significant economic impact. Globally, aviation provides employment to some 57 million people and supports $2.2 trillion in business. And in Saudi Arabia, aviation and aviation-enabled tourism supports 3.2 percent of the Kingdom’s GDP and 3.0 percent of the workforce,” said Tyler.
e-customs platform could lead to a phased implementation and eventually facilitate full implementation of e-Freight in the Kingdom
IATA’s Director General and CEO also noted the intent by the government of Saudi Arabia to enable an e-customs platform, and hoped this could lead to a phased implementation and eventually facilitate full implementation of e-Freight in the Kingdom.
Saudi Arabia’s 27 airports handle over 54 million passengers annually
“Aviation is a critical component of the Saudi economy. Saudi Arabia’s 27 airports handle over 54 million passengers annually, and the numbers are growing at double-digit pace. The aviation investments made in the Gulf region in recent years shows the vital role aviation can play in building and diversifying economies. The new King Abdulaziz International Airport project is a good example of such important investment. It is essential that the Saudi government continue with those policies to support the efficient development of connectivity by avoiding unreasonable taxes and onerous regulation, and building sufficient infrastructure,” said Tyler.
During his visit, Tyler also met with Saudi Arabian Airlines Director General, Eng. Khalid Almolhem, executives of Saudi Arabian Airlines, and government officials.
Topics of discussion included further liberalization of airspace and the development of Saudi Arabian Airlines and aviation in the Kingdom. IATA also concluded agreements to accredit Saudi Arabian Airlines’ training centers as authorized training centers of the IATA Training and Development Institute. This is a significant step for the development of aviation’s human capital in the region.
Saudi Arabia could open its domestic market to other airlines in the Gulf Cooperation Council (GCC)
Meanwhile, the possibility that Saudi Arabia will open its domestic market to other airlines in the Gulf Cooperation Council (GCC) may just be the wedge needed to crack open the skies of the Middle East to liberalization. Earlier this year, Saudi authorities announced they were seriously considering a move to allow other carriers from within the GCC access to operate services in the Kingdom’s domestic market.
Over the past decade, the gap between growth rates in Middle East long-haul and intra-regional traffic has widened. Between 2000 and 2010, intra-regional and domestic traffic in the Middle East expanded about 150 percent, compared with a 179 percent increase in international traffic, with the bulk of the latter accountable to the Gulf carriers, full service and LCC.
Over the next 20 years, intra-regional and domestic traffic is expected to expand at about 5-5.1 percent
This trend is expected to continue. Over the next 20 years, intra-regional and domestic traffic is expected to expand at about 5-5.1 percent p/a, well behind the overall forecast traffic growth of 6.4-6.6 percent p/a.
Domestic and intra-regional growth rates in the Middle East are expected to be roughly in line with average global traffic growth, despite the fact regional economic and population growths are expected to grow substantially above world averages.
Many Mena countries are pursuing ambitious tourism development policies, increasingly bumping up against their more restrictive aviation strategies
Intra-regional traffic will be driven by increasing regional prosperity, the high labor mobility between Arab countries and young local populations. In addition, many Middle East and North African countries are pursuing ambitious tourism development policies, increasingly bumping up against their more restrictive aviation strategies.
One positive sign is the regional fleet outlook. Wide-body aircraft have dominated aircraft ordering in the Middle East over the past decade, but in recent years substantial numbers of short-haul aircraft have been added to regional order books. Much of this has been driven by the arrival and expansion of LCCs, as well as smaller Middle East carriers adopting new operational niches. LCCs today still only supply a little more than 11 percent of Middle East intra-regional capacity, yet account for more than one-third of the region’s narrow-body orders.