Market Trends of Middle-East Aviation Industry
Commercial Aviation is expected to Dominate the Market During the Forecast Period
The commercial aviation segment in the Middle East is expected to experience high demand due to the increasing air passenger traffic, increasing procurement of new aircraft by airlines, and improving economic conditions in several countries across the Middle East. According to IATA, in 2023, airlines in the Middle East recorded a 33% increase in air passenger traffic compared to 2022. The air passenger traffic in the region surpassed the pandemic levels due to the rapid vaccination programs and the re-opening of borders.
In the region, the low presence of domestic travel and major global aviation hubs such as Dubai have aided the utilization of commercial widebody aircraft in Middle Eastern countries. Additionally, in the region, the demand for the commercial aviation sector is driven by various airlines that are placing huge aircraft orders, and this factor is expected to boost the segmental demand during the forecast period. For instance, as of January 2024, Qatar Airways alone had approximately 198 aircraft on order worth USD 72 billion. Similarly, in November 2023, FlyDubai awarded Boeing a contract to deliver 30 B787-9 planes to cater to the demand for air travel on existing routes.
Regional airlines are introducing new routes to cater to the demand from air passenger traffic. For instance, Air Arabia announced that it planned to launch new flight routes from Sabiha Gokcen International Airport to Cairo International Airport starting in April 2024. Such factors are expected to drive the demand for commercial aircraft engine MRO services in the region during the forecast period.
The United Arab Emirates is Projected to Retain the Largest Market Share
Saudi Arabia accounts for a significant portion of the Middle Eastern aviation market. The country is undergoing a progressive change to become a critical aviation-related industry in the region and is witnessing an increase in the number of developments related to the market. Saudi Arabia has long recognized the aviation sector as a means to drive economic growth. Privatizing airports has played a significant role in increasing the development of the aviation industry in Saudi Arabia.
In the last two decades, the aviation market in Saudi Arabia has witnessed significant growth in terms of airport infrastructure. With the air passenger traffic showing signs of recovery and the government offering financial aid, airlines in the country are now focusing on fleet expansion. As of November 2021, Saudi Arabian Airlines had plans to place a massive order of more than 100 aircraft with either Airbus or Boeing. The airline is targeting a fleet of 250 aircraft by 2030.
Military aviation in Saudi Arabia is witnessing significant growth and changes. Saudi Arabia is expanding its military aviation fleet and has already placed orders for several military aircraft. The ongoing rivalry between Saudi Arabia and Iran may be the primary driver, which is likely to lead to growth in military aircraft acquisitions in Saudi Arabia. In March 2021, Lockheed Martin subsidiary Sikorsky announced that it had obtained a USD 53.87 million contract modification to produce four UH-60M Black Hawk helicopters for Saudi Arabia. The deliveries were expected to be completed by June 2022.
Saudi Arabia is a lucrative market for general aviation in the Middle East. The country's high wealth and the government's focus on transforming the country into a major tourist hub as part of Vision 2030 are projected to drive the market for general aviation during the forecast period.
