The regional infrastructure boom is showing no sign of slowing down “even against the backdrop of economic risks,” National Commercial Bank chief economist Jarmo Kotilaine said. Aviation and seaports constitute two areas where the regional economies are pursuing an ambitious long-term strategy of capacity building which is giving them a global role far above what they might otherwise enjoy based on their population. Aviation has become one of the most internationally recognized success stories of the region as GCC carries have capitalized on the fact that two-thirds of the world's population live within an eight-hour radius from the Gulf. Leading regional airports, which initially grew as hubs between Asia and Europe have developed an increasingly global reach. The have further consolidated their traffic flows by investing in regional tourism. The International Air Transport Association (IATA) now sees the Middle East as the world's fastest growing market and expects air passenger numbers to increase by 9.4 percent a year until 2014. Boeing's most recent sector forecasts project the addition of 2,520 planes to the fleets of Middle Eastern carriers by 2030. While the global airline fleet is expected to double by 2029, growth in the Middle East should reach 150 percent. This momentum is above all driven by the so-called Big Three of regional carriers: Emirates, Qatar Airways, and Etihad. Saudi Arabia, with annual volume growth rates of around 5 percent, has the largest domestic network and enjoys considerable future potential in the area of pilgrimage-related travel. Initial airport development phases for a whole array of new sites across Saudi Arabia have been finished, paving the way for the country's airport network to expand to less-populated areas, General Authority of Civil Aviation (GACA) President Abdullah Rehaimi said earlier. Cargo is rapidly emerging as another opportunity for GCC carriers with projected annual growth rates of 4 percent. While the success of GCC aviation has built on international routes, also travel within the region is experiencing rapid growth. “Favorable demographic trends and growing prosperity should drive the process further and a number of low cost carriers have emerged to develop the potential of this market. Yet further opportunities would emanate from liberalization of the hitherto fairly strict regulation,” Kotilaine noted. Overall, budget airlines now control almost 10 percent of the total Middle East market in terms of capacity on intra-regional flights. This represents more than a doubling from 2006 but is clearly below the global average of just over 20 percent and the European average of around 30 percent. The track record of the regional budget carriers has been mixed with Air Arabia and flydubai the most notable successes.
