Iraq's aviation sector in flux (page 1 of 2)

For the past two decades the commercial aviation sector in Iraq has been crippled by security fears, lack of infrastructure, and UN Security Council 'no fly zone' restrictions that were imposed following the country's invasion of Kuwait in 1990. However, after six years of occupation by foreign troops the country is slowly seeing improvements in its security situation and infrastructure, creating an emerging market that many international carriers are keen to tap.

Iraq's GDP is forecast to rise 5.8% in 2010, while growth of 6%-8% is expected in the medium term, according to Nadejda Popova, Travel and Tourism Analyst at Euromonitor International. A key driver of economic growth in Iraq is the reconstruction of its oil and gas sector, which currently offers $600bn worth of investment opportunities, and is expected to bring a large number of tourism flows year-round, particularly of industry and government personnel, she noted.

The large resident and overseas population of Iraqis also provides great potential for tourism growth, as many Iraqis who had fled the country will be keen to return home to visit friends and family. Meanwhile, religious tourism continues to be a steady driver of tourism for Iraq, as religious tourists are less likely than other travellers to cancel a visit to a country because of its security situation.

'Iraq has the potential to be a strong destination for religious tourism, which, in turn, can become a stepping stone towards boosting leisure tourism arrivals further,' she told AMEInfo.com.

Another factor that is driving growth is the expansion of Iraq's airports. The government recently approved a master plan to expand Baghdad International Airport, including adding three terminals, a cargo village, free zone and business park. It is expected that the renovation will create 70,000 jobs and bring more than $2bn in investment, Popova said.

In addition, Erbil International Airport recently underwent major renovation works at a cost of $400m and is due to open in June. The airport, which has boosted its capacity in hopes of attracting more international carriers, is capable of handling four million passengers per year.

Competition grows

As Iraq's economy, security, and infrastructure have improved, a growing number of regional and international airlines have launched flights to and from the country, including IranAir, Royal Jordanian, Gulf Air, Etihad, Lufthansa, Turkish Airlines, Air Berlin, and Austrian Airlines, Popova said.

Carriers that have planned, or are looking to add, services to Iraq include Emirates Airline, which is scheduled to launch a thrice-weekly service to Baghdad from July 1. 'Iraq is well on the road to recovery and we are confident that the time is right to commence our operations there,' Emirates chief Sheikh Ahmed bin Saeed al-Maktoum said.

FlyDubai and Qatar Airways also are also looking to expand into Baghdad and other Iraqi cities, including the Shiite holy city of Najaf and Erbil, the capital of the autonomous Kurdish region. 'Iraq is definitely on our radar,' Gaith al-Gaith, CEO of FlyDubai, recently told AP. 'We've been there a few times. It's currently underserved.'

Challenges remain

Although competition is heating up among carriers seeking growth opportunities in Iraq, the country still faces a raft of challenges that could quickly derail its hard-earned progress. 'For airlines to develop services they have to be confident of security and of adequate airport and air traffic infrastructure,' says John Strickland, director of JLS Consulting, a London-based aviation consultancy firm.