Mariam Nihal

Saudi Gazette

Saudi Arabia is the 13th most economically competitive country in the world according to the World Bank. It is the largest economy in the MENA region and a member of the G20, OPEC and the WTO. The country has proven its ability to continue developing its economy for the upcoming generations, regardless of the price of oil.



The airline industry has highlighted the significance of air travel being economical as readily seen by the growing number of passengers travelling through the Kingdom’s airports.



With the majority of the Kingdom’s population under the age of 30, the trends show an increasing demand to travel. More than 5.5 million tourists visited Dubai in the first half of 2013, representing an 11.1 percent year-on-year increase, as reported by Dubai Tourism earlier this year.



“It’s an affluent crowd. But even the middle class families are ensuring they get out more. The youth especially,” Nasreen Hind, a Professor in Jeddah said. “The trend is shifting. Earlier it was just the youth, now the Middle Eastern countries especially Dubai, Bahrain, Kuwait and more are a weekend getaway spot for many families. The emergence of this trend is likely to boost sales and revenues by a great margin for all airlines, especially the ‘low fare’ carriers.”



In a bid to deal with the increasing numbers of flights and passengers the Kingdom’s private sector is now playing a crucial role in the aviation infrastructure. More than 53 million passengers travelled through the Kingdom’s airports in 2011 and 950,000 flights were logged. Passenger numbers were up 13.5% on the previous year, according to a recently published report by a UK company.



Saudi Arabia is an emerging regional market in the midst of a substantial development program, building new industrial cities as well as further developing current infrastructure to meet the needs of the growing young population.



Qatar Airways and Gulf Air will launch domestic operations in the Kingdom this year expanding air travel options according to a statement by Saudi Arabian General Authority of Civil Aviation (GACA). In 2007, the GACA also granted operating licenses to two new carriers Nasair and Sama.



“Saudi Arabian Airlines (Saudia) has been at the forefront of the travel market in Saudi Arabia with new competition entering the market it is still in a better position due to its long standing to meet new challenges,” Rashid Akeel, a Jeddah businessman said. Recent modernization and international reach that alliance membership offers further strengthens Saudia’s position.



“You can see the Saudi government is readily promoting domestic tourism and investing in airports and aircrafts to strengthen and grow the tourism infrastructure,” Mahmoud Hassan, an engineer in Jeddah, said.



The move to grant two foreign carriers to operate in the Kingdom is a progressive step towards expanding the travel business in the Middle East.



Saudia handles approximately 84% of the international traffic handled by Saudi-based carriers, while Nasair has 14% according to a recent report published by the CAPA (Center for Aviation). With a growing share of the total international traffic to and from Saudi Arabia, foreign carriers still own more than 60% of it.



The opening of the Saudi Arabian market presents a new challenge to national airline Saudia according to CAPA.



According to CAPA, $5.4 billion has been dedicated to the development of the country’s domestic airports.



“The Saudi government has outlined a plan to invest more than $30 billion in its airports by 2020, including $10 billion in private investment for the sector. More than $12.5 billion has already been earmarked for the country’s four main international airports at Jeddah, Riyadh, Dammam and Madinah. These four airports handle 91.5% of total air travel in the country, including 72.5% of domestic travel.”



The report highlighted that the general aviation infrastructure, particularly air traffic control and airport capacity, has been significantly upgraded over the past few years.



The Kingdom’s airline industry is known to be one of the safest in the world, according to Global Aviation records, including safety and security measures on the ground.



Arabian Travel Market statistics revealed Saudi Arabia and the United Arab Emirates are leaders in the Middle East in terms of air traffic volume.