The GCC aviation infrastructure market is anticipated to record a CAGR of over 4% during the forecast period.
Key Highlights
- The strategic geographical locations of the GCC countries have rendered them accessible by the airlines catering to around two-thirds of the global population, as the region acts as a key link between the Eastern and Western economies.
- Between 2012 and 2032, the growth in air passenger and cargo traffic in the Middle-East is expected to outperform those in all other regions in the world. The geographical location, combined with the fleet expansion and the expanding airport infrastructure, is a key growth driver. The United Arab Emirates and Saudi Arabia are the two key aviation markets in the region that together constitute approximately 73% of the total fleet size of the GCC aviation sector.
Key Market Trends
Rising Passenger Traffic Fostering Infrastructure Modernization
The aviation industries in the GCC and the wider Middle-East region support the economic activities with USD 130 billion, which is equivalent to 4.4% of the region’s gross domestic product (GDP). The GCC region has become a global tourist hub. The tourism sector accounts for about 7% of the region’s economy. As per the IATA, in 2019, the Middle-East region accounted for around 10% of the global scheduled passenger and freight traffic. To support a rapid increase in passenger movement, the governments of the Gulf nations are investing resources toward enhancing and expanding the current capabilities of the existing aviation infrastructure. The capacity utilization of the major airports in the region is nearly at their threshold; hence, a potential investment of USD 100 billion is anticipated to help cope with the Y-o-Y passenger growth of around 10%. As of May 2018, there were around 95 ongoing aviation infrastructure construction projects in the region. The total worth of the ongoing projects is estimated at USD 49 billion, wherein USD 45 billion was directed toward airport terminal projects and more than USD 3 billion was meant for the construction and development of the hangar, runway, and ancillary facilities.
Saudi Arabia and the United Arab Emirates are Anticipated to Dominate the Market
Currently, the major airports in the United Arab Emirates and Saudi Arabia account for nearly 80% of the regional passenger traffic. Also, airport infrastructure and facilities in both countries constitute an estimated 81% of the existent aviation infrastructure among the GCC countries. Among the six GCC countries, the United Arab Emirates is the leading investor, with nearly USD 136.1 billion of investment planned for the aviation industry during 2011-2021. The ongoing COVID-19 pandemic has temporarily halted investments, and the airports are focused on bolstering the critical global supply chains and facilitating the shipment of humanitarian aid to 24 different countries impacted by the COVID-19 pandemic. Besides the expansion of the international airports in both countries, some new airport projects are also underway. For instance, in Saudi Arabia, a new airport is being built in Abha to accommodate five million passengers per year, while another new airport has been planned for Jizan. Such developments are anticipated to drive the market share of Saudi Arabia and the United Arab Emirates during the forecast period.
Competitive Landscape
The GCC aviation infrastructure market is marked by the presence of several regional players that compete based on their capabilities and specialization to secure new contracts for both construction and expansion of the aviation infrastructure in the region. Several new contracts have been awarded to support the upcoming projects. For instance, in 2016, a joint venture between Arabtec Construction LLC (Arabtec) and TAV Tepe Akfen Investment Construction and Operation Co. (TAV) was awarded a contract worth USD 1.1 billion to modernize the passenger terminal building at the Bahrain International Airport. In February 2020, Matar Construction awarded five contracts to initiate the multi-phased expansion plan at the Hamad International Airport. Also, in April 2018, Dubai Aviation Engineering Projects awarded the contract to construct bus stands at the Dubai International Airport to ASGC Construction LLC. Several new airports and modernization programs are scheduled to be initiated within the forecast period, thus, driving the business opportunities for the market players.
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- The market estimate (ME) sheet in Excel format
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Table of Contents
Methodology
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