Middle East carriers to spend hundreds of billions on new aircraft in next two decades

In its Global Market Forecast 2011-2030, Airbus predicted that the Middle East will account for 11% of global traffic in 2030, up from 7% today. 'At the growth rate the Middle East is on today, this market will double in size in terms of revenue passenger kilometres in a little over ten years, while the rest of the world will double in about fifteen years,' said John Leahy, Airbus Chief Operating Officer, Customers, who presented the report at the show.

To meet this growth, carriers in the region will need to add 1,921 new passenger and freighter aircraft (above 100 seats) at a cost of $347.4bn. This growth rate would result in the almost trebling of the regions fleet from over 800 aircraft today to some 2,260 by 2030.

Airbus said the main drivers of the continued strong demand for new aircraft include fleet expansion and replacement, greater urbanisation, an increasing number of mega cities and the overall ongoing expansion of the region as a geographical hub and tourist destination. It pointed out that the region is uniquely placed with more than 85% of the world's population within reach of a direct flight.

The region's new passenger aircraft requirement includes 779 single-aisle aircraft, 801 twin-aisle aircraft, and 302 very large aircraft, Airbus said. Of these 1,442 aircraft will be necessary for growth and 440 for replacing ageing aircraft with newer more eco-efficient models. Globally, there is a move towards larger aircraft in all size categories to help absorb growing passenger numbers despite infrastructure constraints.

The region is the world's busiest for A380 megajumbo, and is expected to remain so over the forecast period. Airbus noted that Middle East carriers are increasingly choosing larger aircraft due to the growing number of global hubs in the region, and particularly within aircraft families for the reduced training and maintenance costs, reduced fuel burn and environmental benefits they bring.

Emirates, Etihad, Qatar Airways leading growth

Boeing's Current Market Outlook predicts a similar spending bonanza over the next 20 years, with the region's fleet forecast to grow 160% over the period. Boeing noted that the growth is being led by the big three carriers - Emirates, Qatar Airways, and Etihad - which have seen their collective capacity climb by 23% per annum over the past decade.

Approximately half the 885 airplanes on order in the Middle East, including 72% of the widebodies, will go to these carriers, the report said.

"All three airlines base their growth strategies on the principle that newer, more efficient airplanes will provide a competitive advantage over their rivals from Europe and Asia,' said Randy Tinseth, Boeing Commercial Airplanes VP of Marketing. 'If you take a look at the backlog of the big three in terms of seats, and you factor in Emirates' new order of 777s, my guess is that these carriers have as much capacity on order as their competition in Europe and Asia combined.

However, not to be forgotten in the remarkable growth story taking place in the region's aviation sector is the emergence of the low-cost sector. "Newly emerged low-cost carriers are stimulating demand for travel, targeting the young local population and the large migrant workforce,' Boeing's report said. Flying short- and medium-haul routes within the region and to Africa, India, and Eastern Europe, the low-cost carriers supply only 4% of the region's capacity, yet they account for more than one-third of the region's backlog of single-aisle airplanes.'

According to Boeing, 34% of the projected demand in the region will be for airplanes to replace current aircraft, while 66% will be part of fleet expansion plans, as the region's airlines gear up for significant growth over the next two decades. Single- and twin-aisle airplanes will account for 90% of the region's new airplanes over the 20-year period, with an estimated 1,160 single aisle jets and 1,110 twin-aisle airplanes expected the be delivered during this time. The remaining 10% is split between large airplanes and business jets.