GCC Aviation Report

Aviation in the GCC States
Flying High Amidst Global Turbulence
Industry Trends & Growth Scenario Industry Performance 2011 Airports & Airlines - Expansion & Growth Projections UAE - The New Global Aviation Hub
In association with: Researched & Prepared by
Introduction
Although the global economy remained unstable with unhealthy growth prospects in several sectors, the aviation industry posted a modest growth of over five per cent in 2011. More than 2.7 billion people travelled by air in 2011 and the number of air travelers is expected to cross the three billion mark in 2012. Coming at an opportune time for the aviation industry players, the GCC region is witnessing a massive growth in the aviation industry, especially the airlines and airports. This unparalleled growth opportunity is bringing global companies from airport builders to airline manufacturersin hordes to the region where airport development remains a priority for the governments. The healthy economic boom is what is driving the expansion and the trend is going to continue in the coming years with many Gulf destinations vying with each other to be the best air transport hub. According to the Arab Air Carriers Organization (AACO), Middle East-based airlines currently account for eight per cent of the global air transport industry. These same airlines are collectively growing at 10 per cent annually, double the global five per cent average. The Middle East is home to the youngest fleet in the world, with a total of more than 600 aircraft, and has the greatest number of aircraft on order anywhere in the world. Indeed, between now and 2020, the Middle East is forecast to lead world passenger traffic growth, with current travel demand up 18 percent. Experts forecast that the region will need 869 aircraft, valued at US$115 billion for the next 20 years. This report has been prepared based on information, statistics and photographs collected from various airports, airlines and research bodies in the UAE and overseas to study and analyze the global economic landscape and performance of the aviation industry in the year 2011 and growth and expansion projections for the year 2012 and beyond. The report offers insights into the aviation industry in the Middle East and the six GCC states Saudi Arabia, Kuwait, Qatar, Bahrain, Sultanate of Oman and the UAE in addition to the salient features of the airports expansion programmes and air traffic movements among other topics. We accept no responsibility for any inaccuracies and inconsistencies although every effort has been made to verify the information used in this report. The report is aimed at enhancing knowledge of aviation industry professionals and others and not to promote any commercial interest of any organisations. We thank all the institutions and individuals who extended their cooperation in making this report a reality. This Special Report has been prepared exclusively for Airport Show 2012 edition.
Contents
1. The World Economic Situation & Prospects 2011 and 2012 The World Bank Outlook Middle East Economic Outlook IMF study GCC Economic Outlook 2012 Saudi Arabia United Arab Emirates Qatar Kuwait Oman Bahrain 2. Aviation Industry A global perspective by ICAO and IATA Aviation accounts for 8 per cent of worlds GDP IATA - 2011 performance and 2012 projections Middle East Forecasts by Boeing, Airbus, Embraer and Bombardier The Middle East region in global aviation industry Aviation Industry in Middle East and GCC Trends and Developments GCC airlines fleet and order status 3. UAE - An overview Airport Developments in the UAE General Civil Aviation Authority Strategic Plan 2011-2013 UAE passenger traffic to hit 82.3 million Investments and Expansions Issues and Priorities 4. Aviation industry in GCC Trends and Developments 5. GCC Airports- An update on expansions and investments 6. Air traffic movements in the GCC
The World Economic The Situation Analysis 2011 and Prospects for 2012 The World Bank
After years of fragile and uneven recovery, global economic growth is expected to continue its slower growth into 2012. The United Nations baseline forecast for the growth of world gross product (WGP) is 3.5 per cent for 2012, which is below the 3.6 per cent estimated for pre-crisis pace of global growth. Weaknesses in major developed economies continue to drag the global recovery and pose risks for world economic stability in the coming years.Read More The unprecedented scale of the policy measures taken by governments during the early stage of the crisis has no doubt helped stabilize financial markets and jump-start a recovery. Global economic growth started to decelerate on a broad front in mid-2011 and this slow growth is expected to continue into 2012 and 2013. The United Nations estimates growth of world gross product (WGP) at 2.8 per cent in 2011, and its baseline forecast projects growth of 2.6 per cent for 2012 and 3.2 per cent for 2013, which remains below the pre-crisis pace of global growth. This has further weakened global aggregate demand-already nurtured by persistent high unemployment. Additionally, the failure of policymakers, especially those in Europe and the United States, to address institutional and regulatory deficiencies to prevent sovereign debt distress and financial sector fragility from escalating adds to existing risks for the global economy and is also exacerbating volatility in international financial and commodity markets and slowing growth in developing countries. All of these weaknesses are present and reinforce each other, but a further worsening of one of them could set off a vicious circle leading to severe financial turmoil and a renewed global recession for 2012-2013. The global financial crisis is no longer the major force dictating the pace of economic activity in developing countries. The majority of developing countries has, or is close to having regained full-capacity activity levels. As a result, country-specific productivity and sectoral factors are now the dominant factors underpinning growth. The earthquake and tsunami in Japan and the political turmoil in the Middle-East and North Africa have contributed to a modest slowing in global industrial production and trade. Global growth is projected to remain strong from 2011 through 2013. After expanding 3.8 percent in 2010, global GDP is projected to slow to 3.2 percent in 2011 before firming to a 3.6 percent pace in each of 2012 and 2013, (4.8, 4.3, 4.4 and 4.5 over 2010 to 2013) percent when aggregated using purchasing power parities). Policy tightening and the earthquake in Japan, among other factors, are projected to reduce growth in high-income countries to 2.2 percent in 2011. Subsequently, the expansion is expected to firm to near 2.6 percent in 2012 and 2013, as the negative effects of household, banking and government budget consolidation begin to fade and rebuilding in Japan intensifies. Excluding Japan, high-income growth will be more stable, slowing only marginally in 2011 and strengthening to 2.7 percent in 2012 and 2013. As output gaps close, aggregate growth in developing economies is projected to ease to a still strong 6.3 percent
pace in 2011 through 2013-broadly in-line with these countries underlying potential growth rate. The good performance is broadly based with non-BRIC (Brazil, Russia, India and China) countries projected to grow by around 4.5 percent (3 or more percent in per capita terms). http://go.worldbank.org/FXH56L1DX0
Middle East Economic Outlook IMF study

Countries across the Middle East and North Africa face a diverging economic outlook, with oil exporters experiencing a pickup in growth in 2011 on the back of higher oil prices and oil importers seeing a dramatic downturn as the region faces heightened regional and global uncertainty. The IMFs Regional Economic Outlook for the Middle East and Central Asia projects growth in the Middle East and North Africa region at 3.9 percent in 2011, down from 4.4 percent in 2010. The regions oil-exporting countries (excluding Libya)Algeria, Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, Sudan, the United Arab Emirates, and Yemenare forecast to expand by 4.9 percent in 2011, thanks to higher oil prices and oil production, before moderating in 2012. But growth among the regions oil importersAfghanistan, Djibouti, Egypt, Jordan, Lebanon, Mauritania, Morocco, Pakistan, Syria, and Tunisiawill register just under 2 percent in 2011. Economic activity in the regions oil-exporting countries has clearly improved, bolstered by continued high energy prices. This expansion is driven by the high level of activity in the countries of the Gulf Cooperation Council (GCC), where growth is projected at 7 percent in 2011. Several countriesSaudi Arabia in particularhave stepped up oil production temporarily in response to higher oil prices and shortfalls in production from Libya. In 2012, growth is expected to moderate at about 4 percent. Several factors could result in a less positive growth scenario for regions oil exporters. The most immediate risk is a sharp slowdown in Europe and the United States. Global oil demand would contract substantially, possibly leading to a sustained drop in oil prices. As for the regions oil-importing countries, the political and economic transformations occurring in several of them are expected to extend well into 2012. Together with a worsening economic outlook globally, and in the European Unionwhere growth is forecast to slow from 1.7 percent this year to 1.4 percent in 2012the region is seeing a sharp drop in investment and tourism activity. As a result, growth is down sharply this year, and the recovery in 2012 is expected to be weaker than earlier anticipated, with growth projected at just over 3 percent. In response to growing social unrest, the economic downturn, and higher commodity prices, governments in the region have significantly expanded subsidies and transfers. The cost of this social spending is high, exceeding more than 5 percent of GDP in most countries. As a result, oil importers fiscal deficits are widening by an average of about 1.5 percent of GDP to 7.6 percent of GDP in 2011. In the near term, such spending measures are appropriate to lessen the impact of the downturn. But from an
efficiency and equity standpoint, it is better for governments to gradually replace universal subsidies with targeted social safety nets. Resources can then be used for critical investments in infrastructure and education and for supporting much-needed reforms. Meeting the rising demands of the population will not be easy, the report notesparticularly as most countries have already used their fiscal and international reserve buffers to respond to deteriorating economic conditions in the wake of the Arab Spring, and have much less room left to respond to future shocks. http://www.imf.org/external/pubs/ft/survey/so/2011/CAR102511A.htm
GCC Economic Outlook 2012

The executive summary of a study by Saudi Arabia-based Samba Financial Group: The global environment has become more challenging and risky, with much hanging on developments in the Eurozone. With a recession now on the cards in Europe, global growth will slow to 3.2 percent next year, with the US posting 1.5 percent growth and emerging markets 5.5 percent. Oil markets are likely to weaken, although sustained growth in emerging markets oil demand will provide support. GCC oil production will need to be scaled back to accommodate the return of Libyan oil, and further OPEC coordinated cuts may be needed to keep prices around US$100 per barrel. The benign global inflation environment will help keep GCC rates under control, despite high public spending. The dollar exchange rate peg will be maintained and GCC interest rates will remain low in line with US rates. Domestic credit growth should continue to revive, although growth will likely remain relatively modest. GCC banks generally remain well capitalised and liquid, although country specific constraints are apparent. Although government spending has risen sharply and oil prices are expected to decline, GCC states (except Bahrain) are still projected to run healthy fiscal and current account surpluses in 2012. Fiscal positions are now more vulnerable to oil price movements. The average budget break-even price for the GCC as a whole is estimated to have risen to US$70 per barrel. The projects market showed particularly firm growth in the second half of 2011 and this trend is expected to continue in 2012. Large spending commitments have left the government more vulnerable to sudden reversals in oil prices.
Saudi Arabia
Saudi Arabias real GDP growth is likely to ease to around 3.8 percent in 2012 from near 7 percent this year as sharply higher oil production and large fiscal stimulus boosted activity. Government spending will also be somewhat lower in 2012, but this reflects the huge stimulus of 2011, with spending up by an estimated 23 percent.
Spending in 2012 will still be some 17 percent higher than in 2010, for example. This and the continuation of relatively high oil prices will help underpin confidence in the private economy, and consumption growth should remain strong, albeit somewhat lower than in 2011. The projects market showed particularly firm growth in the second half of 2011 and this trend is expected to continue in 2012. Activity will be focused on gas, refining, petrochemicals, telecoms, transport and real estate. This will benefit the important contracting sector, with knock-on effects for transport, cement, and industrial investment firms. Overall, the nonoil sector is expected to grow by 4.8 percent in 2012, down somewhat from the estimated 5.3 percent growth in 2011, but still higher than the ten-year average. The country will remain largely inured to the Eurozones travails, given its liquid and well-capitalised banking sector, which funds most projects in Saudi riyals. Nonoil exports are mainly directed towards East Asia, where growth should remain firm. Inflation appears to have stabilised at around the 5-percent mark, where we expect it will remain in 2012. Much of this years fiscal impulse has been neutralized by import spending, while imports themselves have been made cheaper by a recovering dollar and declining commodity prices.
United Arab Emirates

Large increases in oil, NGL and gas production will ensure a strong contribution from the UAEs hydrocarbons sector in 2011. This will be bolstered by a healthy revival in Dubais trade and service economy - although activity has weakened in the second half - to push real GDP growth to 4.3 percent. However, a downscaling of Abu Dhabis development spending plans; deteriorating global trade, growth and financial conditions; lower oil prices and a possible OPEC mandated cut in oil output, will all weigh heavily on the economy next year. Continued real estate weakness and Dubai Inc.s heavy debt burden will also present challenges, such that the UAE will be doing well if it manages 3 percent growth in 2012. Abu Dhabis large oil revenues will continue to dominate the UAEs federal finances, and while Dubai will continue to run fiscal deficits, the Federal consolidated budget is projected to return to healthy, albeit declining, surpluses in 2011-12. This follows reported deficits in 2009-10 when large amounts of public funds were used to bail out banks and GREs at a time of lower oil revenues. Fiscal consolidation and economy wide deleveraging are likely to remain. Dubai will need to maintain access to international markets, while Abu Dhabi seems intent on strengthening its financial position and replenishing its large external assets. At the federal level, the UAE will remain a large net external creditor, and the current account will remain strongly in surplus. Declining rents continue to dampen the overall inflation rate which is likely to hold at around 1 percent or under this year. A weaker global environment and sustained oversupply in the real estate market suggest that inflation will remain similarly weak in 2012.
Qatar
Real GDP growth should approach 18 percent this year, bolstered by large increases in hydrocarbons production and exports as the last LNG mega train comes on stream and other gas-based production surges Fiscal policy remains expansionary in support of the governments US$226 billion National Development Strategy covering 2011-16, and this is helping sustain healthy growth in the non-hydrocarbons sector, albeit sharply lower than the 20-30 percent rates in the boom period prior to the global crisis. Following the completion of the bulk of the countrys hydrocarbon investment program, growth will slow to around 5.5 percent in 2012 as hydrocarbons output stabilises at a high level, and growth is principally driven by developments in the non-hydrocarbons sector. Qatars finances remain healthy and able to support the development agenda. Residual weakness in the real estate sector has kept headline inflation low as rents continue to decline. However, inflationary pressures have increased and the CPI excluding rents is up around 5 percent. With public spending increasing, including on salaries, and credit growth on the rise, demand pressures are likely to keep the inflation rate (excluding rents) at a similar level in 2012. Meanwhile Qatars twin fiscal and current account surpluses are projected to remain healthy, although the former is expected to drop to around 6 percent in 2012 as hydrocarbons revenues soften and spending is ramped up.
Kuwait
Higher oil production in 2011 is expected to push real GDP growth to 4.5 percent. However, lingering strains in the financial sector, mainly reflecting problems in investment companies, continue to hamper non-oil growth, which remains muted. In addition, hopes have faded for the rapid implementation of the four-year development plan launched last year as political tensions have resurfaced, and capital spending has stalled. As a result, it seems likely that non-oil sector growth will stall at around 3 percent next year. With the contribution from the oil sector expected to decline as Kuwait restrains production, overall real GDP growth is likely to dip to 3 percent. Inflation is projected to moderate to 4 percent in 2012 from 5 percent this year. While growth prospects may be muted, Kuwaits public finances remain exceptionally strong, even after recent large increases in subsidies. The oil windfall from higher prices and production should push the fiscal surplus to 23 percent of GDP, and another 20 percent surplus is projected for 2012 despite lower oil revenues. The current account surplus will remain similarly strong at between 30-35 percent in both years.
Oman
The unrest and protests experienced earlier in the year have ceased, although lingering discontent over high unemployment rates and demands for political reform remain. The authorities have responded by increasing public sector jobs, raising salaries and pensions, and spending more on social sectors and infrastructure. Together with sustained growth in oil output and revenues, this is likely to have supported a real GDP growth of 4 percent in 2011. However, growth is projected to slip to 3.5 percent in 2012 in the face of a poorer global outlook. Economic activity will nonetheless be underpinned by sustained increases in oil (Oman is not constrained by OPEC quotas), gas output and investments aimed at diversifying the economy.
Bahrain
Bahrains finances are strained and vulnerable to oil price movements. Oman should be able to finance its increased expenditure commitments relatively comfortably. The jump in oil prices this year is expected to push the fiscal surplus up to 10 percent of GDP, although this is projected to drop back to 7.5 percent in 2012 as prices recede. Meanwhile, public debt remains low at less than 10 percent of GDP. The current account will similarly remain in surplus through 2011-12, and inflation will be contained, helped in large part by policies restricting price increases. Political and social unrest has damaged Bahrains reputation as a safe, stable, financial hub. While the widespread protests that erupted earlier in the year have been brought to an end, many issues remain unresolved and this is dampening investor confidence. The key financial and tourism sectors have suffered as a result and real GDP growth is expected to dip. Hydrocarbons activity and aluminum production continue to contribute to growth, and increased government spending and cash handouts have supported consumption. However, it seems unlikely that the economy will perform much better in 2012 as global conditions deteriorate. Bahrains finances are strained and vulnerable to oil price movements. Spending has been increased in response to political pressures, particularly for housing and subsidies although the surge in oil prices has provided some additional fiscal space. This is likely to rise next year as oil prices weaken. However, the sovereign state has successfully issued a US$750 million 7-year international sukuk at 6.27 percent in November, suggesting that it continues to maintain market confidence.
Bahrain will also be able to rely on support from Saudi Arabia and the GCC if necessary, and has already been promised US$10 billion for infrastructure spending from the latter. Inflation will remain muted at under 2 percent. Prices have softened since the beginning of unrest and inflationary pressures from higher food and commodity prices are receding. Bahrain will also continue to run a current account surplus, although this will dip to 5 percent of GDP in 2012 from 8 percent this year. http://www.samba.com/GblDocs/gcc_economic_outlook_2012_en.pdf
ACI Report on Airports performance across the world in 2011

The worlds airports now generate more than $100 billion in total annual revenue, according to the latest statistics from ACI World. The figures, announced as part of the ACIs Airport Economics Survey 2011, showed that the Middle East region alone recorded $4.6 billion in revenues over the last financial year. The survey found that the aeronautical revenue $54.5 billion from passenger and airline user charges accounted for 53.5% of the industry-wide income. Meanwhile, non-aeronautical revenues made up 46.5% of industry revenue in 2010; however this category includes non-operating income of $6.9 billion. Elsewhere airports across the globe incurred operating expenses of $56 billion or 55% of revenues during 2010/11. Airports capital expenditure was almost a third lower than predicted for 2010, with $26 billion spent on upgrades or expansions, and ACI World noted that this reduced capital expenditure was clearly a consequence of the global financial crisis which led many airports to scrap or cut down on capital programmes. For 2011, capital expenditure is expected to rise by 14% to $29 billion, it added. Also in the survey, ACI predicted that the financial performance of the global airport industry for the remainder of 2011 was expected to have continued its growth trend. It said that passenger traffic growth would remain above 4% for the year with the more profitable international traffic growing by around 6%. Looking to 2012, ACI added that despite a lot of uncertainty in financial markets as to whether governments will be able to contain the sovereign debt crisis in Europe, the consumer seems to be rather unfazed. The 16th edition of the ACI Airport Economics Survey generated responses from 604 airports that together handled 3.12 billion passengers or about 62% of worldwide traffic in 2010, providing unique and comprehensive insights into economics and finances of airports around the world.
Aviation Industry Perspectives of ICAO and IATA

Global air travel statistics for the year 2011 have been published by ICAO, the International Civil Aviation Organization. They show that, over the course of last year, airlines around the world carried a total of approximately 2.7 billion people - an increase of 5.1 per cent compared to 2010. According to the ICAO, this air passenger traffic increase has been fed by several factors - improved economic conditions and buoyant air travel demand among them. While down on 2010s result, there was still a 7.4 per cent international passenger traffic increase, especially where emerging markets were concerned. On the domestic travel front, meanwhile, the rise was 4.9 per cent, with China alone contributing 10 per cent of this. On a regional basis, the most significant 2011 air travel passenger growth acceleration was recorded in the Middle East, with a 11.9 per cent rise between 2010 and 2011. Europe came in slightly behind with 9.5 per cent, and then followed Latin America, the Asia-Pacific region and Africa. Overall traffic growth has been fuelled by both positive economic prospects worldwide, based on a 3% increase in the world real Gross Domestic Product (GDP) and by a strong demand for air travel, which points to improved household balance sheets and robust business cash flows, the International Civil Aviation Organization states, in its report. However, the ICAO report showed only a 0.7 per cent increase in the level of air cargo carried, which amounted to around 49 million tonnes in all. The heavier economic climate in Europe, coupled with a slowdown in Chinese exports and strong competition in maritime transport, adversely affected cargo traffic, the ICAO explains. In terms of aircraft delivered, between them, the dominant commercial type manufacturers - Boeing and Airbus - are expected to have supplied in excess of 900 airframes to customers during the past 12 months.
IATA - 2011 performance and 2012 projections

For 2011, profitability remains weak but unchanged at US$6.9 billion for a net margin of 1.2%. However looking ahead to 2012, IATA has downgraded its central forecast for airline profits from US$4.9 billion to US$3.5 billion for a net margin of 0.6%, according to an IATA statement in December 2011. The Eurozone crisis puts severe downside risk on the 2012 outlook as illustrated by the recently published OECD economic outlook. In a worst-case scenario, should the Eurozone crisis evolve into a full-blown banking crisis and European recession, IATA estimates that the global aviation industry could suffer losses exceeding US$8 billion in 2012. The biggest risk facing airline profitability over the next year is the economic turmoil that would result from a failure of governments to resolve the Eurozone sovereign debt crisis. Such an outcome could lead to losses of over US$8 billion-the largest since the 2008 financial crisis, said Tony Tyler, IATAs Director General and CEO
The global forecast for 2011 is unchanged at US$6.9 billion but regional differences have widened, reflecting the very different economic environments facing airlines in different parts of the world. And the overall margin of 1.2% tells you just how difficult the battle for profitability in this business is, said Tyler. European carriers are by far in the most challenging position. Higher passenger taxes and weak home market economies have limited profitability in Europe. The regions carriers are forecasted to generate a collective profit of just US$1.0 billion, down from the previously forecast US$1.4 billion, and an EBIT margin of 1.2%. There has been low profitability despite European airlines being one of the fastest growing regions in terms of traffic this year. Yields have suffered and the base of strong demand grows more fragile as the sovereign debt crisis escalates. North American carriers are in a much more benign environment. They have seen yield and load factor improvements as a result of tight capacity management, which has improved profitability to US$2.0 billion (up from the previously forecast US$1.5 billion). The US economy has also grown at a faster pace than Europe. This gives the region the strongest EBIT margin of 3.2%. None-the-less, the bankruptcy filing of American Airlines indicates that the region faces intense competitive challenges as well. Asia Pacific carriers also saw stronger though varied trading conditions. Japans domestic market has still not fully recovered from the March earthquake and tsunami, and load factors remain under pressure. By contrast airlines have improved load factors and profitability on Chinas expanding domestic market. We have upgraded our forecast for the region by US$800 million to a US$3.3 billion profit. This is the largest absolute profit among the regions. Middle East carriers are expected to see profits of US$400 million (down from the previously forecast US$800 million) as high fuel costs squeezed profit margins on the more price sensitive long-haul traffic connecting over Middle Eastern hubs. In a similar pattern Latin American profits will see a downgrade to US$200 million (from the previously forecast US$600 million). Performance has been mixed across the region with much of the downgrade due to the impact of intense competition and falling load factors on Brazils domestic market.
2012 - Central Forecast

Even if government intervention averts a banking crisis, it is unlikely that Europe will avoid a brief recession. Business and consumer confidence has already fallen too far. Global GDP growth forecasts for 2012 have been revised downwards to 2.1%. Historically the airline industry has seen profit turn into loss whenever global GDP growth falls below 2%. This is driving the downgrade in the 2012 outlook. Demand: Passenger demand is expected to grow by 4.0% (down from previously forecast 4.6%), while cargo is expected to show flat growth (down from the previously forecast 4.2% expansion).
Yields: Passenger and cargo yields are expected to remain flat in 2012. While this is unchanged for cargo, passenger yields were previously forecast to grow by 1.7%. Fuel: Fuel costs are relatively unchanged from the previous forecast at US$198 billion. That is based on oil at US$99 per barrel (against a previous forecast of US$100 per barrel). Revenues and Costs: Industry revenues are expected to grow by 3.7% to US$618 billion. This will be outstripped by cost increases of 4.5% to US$609 billion.
Middle East market Forecasts

Boeing
Boeing forecasts more consolidation in the global aviation industry in the next 10 years. Chief Executive Officer Jim McNerney said restructuring of air carriers will be one of the industrys biggest challenges in the coming decade. He predicted that smaller air carriers would combine with larger players, but mid-sized airlines would be caught out in the mergers and takeovers. The forecast apparently supports plans by Qantas to open a new service based in Southeast Asia, which has been denounced by Qantas union. The International Air Transport Association, in its September forecast, projected that profits for the global aviation industry would fall to US$4.9 billion in 2012 with revenues of US$632 billion and a net margin of just 0.8 per cent. IATA previously upped its industry profit expectations for 2011 to US$6.9 billion from the US$4 billion it forecast in June 2011. Despite the higher expectation, IATA said profitability is still exceptionally weak at 1.2 per cent net margin given a total revenue projection of US$594 billion for the industry. Airlines are going to make a little more money in 2011 than we thought. That is good news. Given the strong headwinds of high oil prices and economic uncertainty, remaining in the black is a great achievement, IATA Director General and Chief Executive Officer Tony Tyler said in a statement. But we should keep the improvement in perspective. The US$2.9 billion bottom line improvement is equal to about a half a per cent of revenue. And the margin is a paltry 1.2 per cent. Airlines are competing in a very tough environment. And 2012 will be even more difficult, Tyler added.
Airbus
Nearly 2,000 new passenger and freighter aircraft will be needed in the Middle East by 2030. The Middle East accounts for 7% of global air traffic and the Airbus forecast says that this will increase to 11% by 2030. According to Airbuss latest global market forecast (GMF), carriers in the region will require 1,921 new passenger and freighter aircraft (above 100 seats) between 2011 and 2030 valued at US$347.4 billion. Of these, 1,882 are passenger aircraft (US$336.3 billion) and 39 are freighter aircraft (US$11.1billion).
With todays aircraft, every major destination around the globe is within reach of a direct flight from the Middle East and this is driving an above-average passenger demand growth rate of 6.4% per year, which is well above the world average 4.8% over the next 20 years. This above-average growth rate will result in the almost trebling of the regions fleet from more than 800 aircraft today, to some 2,260 by 2030. According to the Airbus forecast, the regions new passenger aircraft requirement includes: 779 single-aisle aircraft; 801 twin-aisle aircraft and 302 very large aircraft (VLA). Of these, 1,442 aircraft will be necessary for growth and 440 for replacing ageing aircraft with newer more eco-efficient models. In the freighter aircraft category, there will be a demand for 13 twin-aisle aircraft and 26 VLA aircraft. The Middle East remains one of the worlds most robust aviation regions and this is confirmed by a 200% increase in inter-regional passenger traffic over the last 10 years. During Dubai Airshow 2011, Airbus clinched a deal to sell 50 A320neo aircraft to a Kuwaiti leasing firm on the second day of Dubai Airshow, as plane manufacturers forecast a boom in demand from the Middle East. The firm ALAFCO signed an agreement with the European manufacturer to buy 50 units of the new single-aisle jet in a deal valued at US$4.6 billion at list price. It took an option for another 30 units to be finalised by end of 2011. But the deal remains modest in comparison with the order scooped by its US rival Boeing from Dubais Emirates for 50 B777 long-range aircraft worth US$18 billion. The two rival manufacturers said that the Middle East aviation sector, which continues to outpace other regions in growth, will see a boom in demand for aircraft over the next 20 years. According to Airbus latest Global Market forecast, Middle East carriers will require 1,921 new passenger and freighter planes between 2011 and 2030, valued at US$347.4 billion, of which 1,882 would be passenger planes. 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 an overall ongoing expansion of the region as a geographical hub and tourist destination, it said. Airbus maintained that these factors were driving an above average passenger demand growth rate of 6.4 per year, which is well above the world average 4.8 per cent over the next 20 years. The growth rate would result in almost trebling the regions fleet from over 800 aircraft today to some 2,260 by 2030, while regional carriers were opting for longer range airliners as global travel hubs grow around the region. Boeing was even more upbeat, projecting a Middle East market of 450 billion with demand for 2,520 aircraft by 2030. It estimated passenger airplanes in the Middle East to grow from a current fleet of 1,040 jets to 2,710 by 2030, with 34 of the projected demand to go to replace current aircraft. It estimated passenger airplanes in the Middle East to grow from a current fleet of 1,040 jets to 2,710 by 2030, with 34 of the projected demand to go to replace current aircraft. Carriers like Emirates Airlines, Qatar Airways and Etihad Airways rank among the worlds fastest growing airlines as they vie to expand their long-haul routes and increase capacity.
Emirates is now the largest single operator of Boeings 777 long-haul airliner with some 95 units in service. Its order was the largest single dollar-value order in Boeings history. The government-owned carrier is also the largest single customer of Airbus superjumbo A380 with a purchase list of 90 units. It also has ordered 70 Airbus A350s. Qatar Airways is the largest customer for the mid-size Airbus A350 with an order for 80 units of the long-haul jet that aims to compete with Boeings 787 Dreamliner.
Embraer
Brazils Embraer, the worlds third-largest commercial plane maker, said 2011 deliveries fell to a three-year low, missing initial estimates after the global downturn had led to a string of cancelled executive jet orders. Still, the company replaced deliveries of regional E-Jets last year with new firm orders, keeping its commercial aviation backlog steady for the first time since 2008 in a sign of resilience despite a global slowdown in civil aviation. Embraer delivered 32 commercial planes and 50 executive jets in the fourth quarter, bringing total deliveries for 2011 to 204, short of the 220 target set out early in the year. Embraer reported 246 deliveries in 2010. The shortfall in deliveries last year came from cancelled orders for less costly private jets, which Embraer had warned would hit total deliveries. Embraer has a dominant position in the Middle East 60/120 pax jet segment. Embraer sees a market demand of 310 jets in the 60-120 passenger jet segment in the Middle-East in the period 2011-2030. According to reports, the aircraft maker has forecasted a market potential of US$14 billion during the period in the region. The companys first commercial aircraft, Embraer 170 entered service with Saudi Arabian Airlines in 2005. The family of four E-Jets, seating from 70 to 122 passengers, are in service with nine operators. A total of 65 E-Jets are currently flying in the Middle East, taking off and landing every five minutes. In 2010-2011, the Embraer 170 was the second-most operated aircraft in the region, mainly used to right-size routes and reducing the narrow-body excess capacity. Embraer executive jets have also received widespread acceptance from customers in the region, with over 30 aircraft flying, ranging from the light jet Phenom 300 through to the ultra-large Lineage 1000, including the newest large Legacy 650 jet, which received the first order from the UAE in late 2011. Embraer is planning to double the number of E-Jets operating in the Middle East over the next two years. With 65 of the family in service in the Middle East, the aircraft are already the second most-operated type in the region, after the Airbus A320. The fact that 84% of aircraft in the Middle East have more than 120 seats offers a large number of opportunities for the 30 120 seat jet market. A global fleet forecast recently produced by Flight Globals data and consultancy division Ascend predicted that the number of regional jets in the Middle East will more than double to 172 aircraft over the next 10 years. Embraer holds a 74% market share of the 85 regional jets currently in operation.
Bombardier
As the aerospace industry finds its post-downturn footing, it is also developing and evolving new models that capture more efficiency and return higher yields. Airframe and engine manufacturers will continue to innovate and deliver designs that optimize economics, performance and use new technologies that enhance the products in the capacity segments they serve. Additionally, airlines are creating or refining business models designed to reduce costs, network inefficiencies and increase profitability. Emerging economic markets represent the highest growth opportunities for aviation, while stability is predicted in more mature markets. As a percentage of the total deliveries, new aircraft demand will increase for emerging markets outside of North America and Europe. Over the next 20 years, Bombardier forecasts demand for 13,100 aircraft in the 20 149 seat market. This segment, part of the overall industry, will generate approximately US$639 billion in total sales. This represents an increase of 300 new aircraft deliveries compared to last years forecast. The 20 99 seat category will account for 34% of these revenues (US$215 billion) while the 100 149 seat segment will generate 66% or US$424 billion of the total. IATA predicts that there will be 3.3 billion air travelers globally in the calendar year 2014, up 38% from 2.4 billion in 2010. The ever-changing conditions have forced airlines to be disciplined in cost control and innovative in revenue management. The fundamentals still sound for a very resilient industry. Of the 13,100 aircraft deliveries predicted from 2011 2030, 2,500 will be turboprops. The remaining 10,600 will be jets, with 3,600 in the 20 90 seat segment and 7,000 in the 100 149 seat segment. While the absolute number of aircraft deliveries will be weighted towards North America and Europe, still the dominant sources of aircraft demand, there is a shift in terms of the percentage of total deliveries. This is indicative of the increasing importance particularly of China and other Asia/Pacific countries where economic growth is projected to outpace the rest of the world over the forecasted period. Bombardier forecasts that nearly 61% of todays 100 149 seat fleet will be retired by 2030. New generation aircraft specifically designed for this segment will have superior economics, comfort, lightweight design and built-in operational flexibility. New designs will advance the retirement of older aircraft and stimulate demand for new services using aircraft of this capacity. The Middle East continues to offer the potential to play a key role in the transformation of the aviation industry. Sitting between the emerging economic markets of India and China, Middle East carriers have consistently reported increased annual enplanements and revenues. The Arab Air Carriers Associations (ACCO) most current data, 2009, reports a 9.4% year-over-year increase in international passengers. In some countries within MENA, air traffic continues its strong growth: Saudi Arabia, for example, enplaned 4.5 million passengers in the first quarter of 2011, compared to 4.1 million in the same quarter of 2010. While starting from a small base, Africa and Middle East deliveries will capture 7%, or 980, of the total 13,100 20 149 seat deliveries worldwide.
Aviation Industry in Middle East and GCC

Trends and Developments
In November 2011, OAG, the global leader in aviation intelligence and a UBM Aviation brand, released the results of the OAG India and the Middle East Aviation Market Analysis, which reveals a striking contrast of opportunities and challenges in two of the worlds fastest-growing travel markets. In the Middle East, airlines, airports, and air traffic control will need to successfully serve more than four times the 120 million passengers served this year yet even the existing aviation systems do not fulfill current demand. In the Middle East, markets such as Dubai have set the stage for reforming their aviation systems, and the region has demonstrated its ability to develop world-class aviation players, such as Qatar Airways and Etihad However, the regions slow rate of liberalisation and the uncoordinated regional competition for passengers are barriers to continued reforms. The OAG market analysis of India and the Middle East concludes that in order to cut costs, boost efficiencies and spur competition, mergers of the more than 30 competing airlines in the Middle East and India will be necessary. However, mergers of the Middle East carriers are unlikely in the short term because most are government-owned, and therefore more likely to form alliances due to the geographical proximity of many of the carriers including Saudi Arabia Airlines, Qatar Airways, Gulf Air, flydubai, Emirates Airlines and Etihad Airways, all being within 500 miles of each other. These alliances can offer carriers opportunities normally afforded by a merger, such as access to new routes and efficiency savings. http://www.oagaviation.com/Solutions/Reports-Guides/IME/IME. Respondents to ICD Researchs Global Airports Supplier Industry Outlook Survey 2011-2012 say the expansion of business activities in emerging markets, together with stronger economic growth compared to other regions of the world, changing consumer lifestyles and a rise in disposable income, has increased the demand for air travel and related services. This, in turn, is expected to increase the need for airport infrastructure and support services. The Middle Eastern market emerges as the most promising amongst developing markets. Respondents from airport industry supplier companies identified the Middle East, China, India and Brazil as offering the greatest growth potential to the industry in emerging markets. China, India, and South Africa were identified as offering the greatest growth potential to the industry. Economic growth in the Middle East is expected to increase, and airport supplier respondents expect this to reflect positively in air traffic. This will, in turn, drive the need for new aircraft, along with related products and services. According to Boeing, the Middle Easts fleet size is expected to increase by more than 150% by 2029. The Middle East will need 32,700 pilots and 44,500 maintenance personnel, and Latin America will need 37,000 pilots and 44,000 maintenance personnel over the next 20 years. The Middle East airports are expected to handle over 400 million passengers by 2020.
The Middle East continues to allocate large investments for developing new and existing airports expected to cost US$119 billion. An additional AED106 billion in various segments of this sector is under the consideration of industry experts in Middle East. Out of this some US$90 billion is being spent on alleviating the growing strain on GCC airports, which according to the Centre for Asia Pacific Aviation, are running at an average 92 per cent capacity. In Saudi Arabia that figure is 130 per cent. Current capacity utilization in the GCC (passengers/capacity) stands at over 115 %; Bahrain has the most severe case of under-capacity, moving double its capacity in 2010. The UAE, which has seen massive airport expansions in recent years, is the only GCC country, operating with some reserve. Capacity utilization is at 84% due to the completion of Dubai Airport expansions, which expanded capacity from 22 million passengers a year to 60 million with an expectation of further increase to 90 million by 2020. Oman has two major airport expansions in Muscat and Salalah, and Saudi Arabia has started to expand the airports of Medina and Jeddah. Bahrain has begun the expansion of its existing terminal but has cancelled a project for two new terminals. Currently, there are 37 main civil airports in the GCC region. Of these, more than 30 are in Saudi Arabia and the UAE. Saudi Arabia has four international airports and 22 domestic airports; its international airports account for 85% of passenger traffic. By 2020, Emirates, Qatar and Etihad will have the capacity to carry nearly 200 million passengers: four times their current capacity. By 2015, the Dubai, Doha, and Abu Dhabi airports will reach an annual capacity of 190 million passengers. Dubais new, five-runway airport will be able to handle 70 million passengers. This is gigantic considering that the population consists of only a few million, including expatriate workers.
Aviation in the GCC States

GCC airlines fleet and order status
Here is a list of their orders and delivery status, as of November 2011.
Qatar Airways: The Doha-based airline has a fleet of 101 aircraft and an order book of 182 planes. AIRBUS: Qatar Airways has ordered 93 planes, including 80 Airbus A350s and five A380-800s. BOEING: The carrier has ordered 89 Boeing planes, including 60 Boeing 787s and 29 Boeing 777s. Emirates: The Dubai-based carrier has 161 aircraft in service and 190 planes on order to be delivered over the
next few years worth more than $66bn.
AIRBUS: Emirates has 143 planes yet to be received from Airbus, including 73 A380 superjumbos.
BOEING: Emirates has 47 planes on order with Boeing, including 42 Boeing 777s. Etihad Airways: Abu Dhabis flagship airline currently operates a fleet of 63 aircraft and announced the largest aircraft order in commercial aviation history at the Farnborough International Air Show in 2008, for up to 205 aircraft.
Over the next 10 years, Etihad plans to take delivery of 20 A320s between 2011 and 2015; 10 Airbus A380s from 2014; 25 A350s between 2017 and 2020; 31 Boeing 787s between 2014 and 2020; and 10 Boeing 777s between 2012 and 2013.
Saudi Arabian Airlines: The kingdoms national carrier has a fleet of 149 planes, which includes 12 Boeing
777-300s that will be introduced by the end of the year.
UAE - An overview
UAE is the second largest Gulf Arab economy, and amongst the fastest-growing economies in the world. Throughout the past 40 years, the GDP grew rapidly, increasing from AED6.5 billion in 1971 to approximately AED1248 billion in 2011, an increase of 192 times. The GDP growth rate of the UAE over the past years reached record numbers exceeding those of many developed and emerging countries, when the rate of growth over the past five years accounted for 34 per cent. The per capita GDP also increased from AED100,000 in 1975 to AED174, 000 in 2011. Over the past four decades, UAE was able to establish a solid and modern infrastructure, which provides for the citizens and businesses needs of public services. This infrastructure doesnt only include traditional projects such as roads, bridges and power, but transcended to include economic, specialized and free zones, which now exceed 30 zones that are widely spread in the emirates. The real estate sector at various parts of the UAE, especially in Abu Dhabi and Dubai, also contributed to the countrys transformation eventually classifying it as one of a world renowned real estate fronts modified with new concepts, and most importantly green building. Tourism plays a key role in the UAEs economic development, the sectors contribution to gross domestic product jumped from 3.5 per cent in 1995 to 6.2 per cent in 2010. The tourism sector has realised a record high last year, as the number of visitors and tourists in the UAE reached over 10 million. The employment of momentum and gravity of the sector, it is hoped that the number of tourists to the country in 2010 around 15 million tourists. What also contributed to the prosperity of the countrys tourism sector are the strategic location and the increasing flow of local and foreign investments in the sector. The size of investments in infrastructure associated with tourism and transport amounts to AED47 billion per year over the last decade.
Today Dubais Airport is ranked fourth among the top airports in the world. Etihad Airways and Emirates airlines are considered a distinguished trademark in the aviation industry in the UAE, and have enhanced the countrys position on the global civil aviation map. The spread of luxurious chain of hotels throughout the country was also one main contributors to the development of tourism. According to the Travel and Tourism Competitiveness Report 2011, issued by the World Economic Forum, the UAE ranked 30 amongst 139 countries, and got first place in the Middle East as the most advanced country in the travel and tourism sector with 4.78 points. Dubais successful development as a global air transport hub is due in large measure to the success of two airlines; Emirates and flydubai. Both carriers continue to endeavor to open more international passenger and cargo routes. To meet future growth demands and to strengthen their competitiveness, Emirates is expanding their fleet at the rate of 1-2 new aircraft per month for the next five years. Since the opening of the airport in 1960, Dubai has taken a quantum leap in developing and expanding the civil aviation services in the emirate and remains a pioneer in several areas. The massive developments are the fruit of the vision of late Sheikh Rashid bin Saeed Al Maktoum and the furthering of that vision by H H Sheikh Mohammed bin Rashid Al Maktoum, UAE Vice President and Prime Minister and Ruler of Dubai. Aviation generates 25 per cent of the emirates GDP - a fact that has led to its inclusion in Dubais strategic plan and a long-standing open skies policy. Dubai Airports is expecting growth to continue at a strong double-digit rate in 2011, with annual passenger traffic jumping 13.1% to 52.2 million. Dubais flag carrier Emirates is counting on its passenger numbers growing 10 per cent next year while the discount carrier flydubai forecasts its traffic doubling. Today, Dubai Airport ranks among the top 10 airports of the world and stands alone in its own league in several domains, including passenger facilities, safety and security, and excellent connectivity to destinations around the world. Dubai now has two airports, the new one designed to be the worlds biggest airport when fully operational. Emirates has become the worlds largest superjumbo operator with a total of 20 A- 380 in its fleet. In September 2010, the airline launched the double-decker service to Manchester from Dubai. Before the end of the decade, passenger numbers will approach 90 million making Dubai International the busiest airport in the world in terms of international passenger traffic. Dubai has a thriving aviation sector that features the third busiest airport for international passenger and cargo traffic, the worlds largest single airport retail operation and one of the fastest growing and most profitable airlines on the planet. Annual passenger numbers are forecasted to grow to 98 million in 2020 and 150 million passengers by 2030.
Airport Developments in the UAE

in December 2011, marked its 30th anniversary, celebrating three successful decades of providing travellers and customers with world-class services and state-of-the-art facilities. The capitals international gateway has seen more than 126 million passengers pass through the airport since its opening at its current location in 1982. Having historically been based in Al Bateen since 1969, Abu Dhabi International Airport started operation at its current location 38km outside the city in 1982. Terminal 1 covered 5,200 square metres and catered to 3 million passengers per year, which was later increased to 5 million passengers per year when Terminal 1A was opened. A growing number of airlines have since established their operations at Abu Dhabi International Airport, notably Etihad Airways. Terminal 2 opened in 2005 with a passenger capacity of 2 million passengers per year. Four years later in 2009, Terminal 3 was delivered, providing Etihad Airways with a dedicated terminal and a handling capacity of an additional 5 million passengers per year. In the same year, the 4,100 metres North Runway was completed doubling the airports runway capacity, while being the first airport in the UAE with CATIIIB capability. In 2011, Abu Dhabi International Airport saw the completion of the iconic Air Traffic Control Complex, developed to enhance the capacity and efficiency of air traffic services at the Capital airport and cater to the anticipated growth in air traffic in the years to come. During the same year, ADAC completed an enhancement and refurbishment project at Terminal 1 to align its facility and offerings to that of Terminal 3 and other world-class airports. Today the airport caters to 53 international airlines connecting Abu Dhabi with more than 85 destinations in over 49 countries globally. Passenger numbers have also continued to increase over the past 30 years positioning Abu Dhabi International Airport as one of the fastest growing hubs in the world. Under Abu Dhabi Airports Company management, the airport has more than doubled passenger numbers during the past six years from 5.3 million in 2006 to above 12 million in 2011. In July 2010, the airport surpassed the one million passenger mark for the first time in a specific month. Last year, the airport saw the completion of its Air Traffic Control Complex. Also last year, ADAC completed the enhancement and refurbishment of Terminal 1. Last November, the airport became the first Carbon Accredited airport in the Middle East and Asia-Pacific. In the coming five years, ADAC will focus on achieving further competitive milestones with the completion of the new Midfield Terminal Building, which is scheduled to open in 2017.
Abu Dhabi International Airport,
Dubai Airports released Dubai Internationals (DXB) monthly traffic report for November, which shows a
year on year growth of 8.9% in passenger numbers. Passenger traffic in November reached 4,431,673, compared to 4,070,296 recorded during the same month in 2010.
The AGCC recorded the largest increase in total passenger numbers in November (+134,491 passengers), followed by the Indian subcontinent (+77,375), Russia and the CIS (+69,786 passengers), and Western Europe (+48,830 passengers). The contraction in traffic on Middle Eastern routes continued in November (-17,538 passengers). Dubai International handled 191,658 tonnes of freight in November, a marginal decrease of 0.4 per cent compared to 192,405 tonnes recorded during the same period in 2010. Driven by economic growth, UAE airlines such as Emirates Airlines have greatly expanded their network and fleet - From 95 in 2004 to 350 in 2012 and 425 in 2014. To accommodate the airlines ambitious growth plans, airports have embarked upon expansion plans to upgrade their infrastructure. UAE airports are investing up to US$50 billion in new and expanded projects over the next 15 years, which will provide capacity for an additional 200 million passengers per annum. Air travel remains a large and growing industry. It facilitates economic growth, world trade, international investment and tourism and is therefore central to the globalization trend worldwide. In the past decade, air travel has grown by 6 per cent per year UAE airlines have taken full advantage of this trend through two relatively new airline models in the region. The first is the hub carrier, such as Emirates Airlines and Etihad Airways that have been developing their business model around the geo-centricity of the region and the four billion people that live within an eight-hour flying zone. The second model is the budget carrier, such as Air Arabia and flydubai that have been taking advantage of the unprecedented boom in point-to-point travel within the region. While most regions across the world have experienced slow growth in air travel over the past two years, the growth of the UAE aviation industry has been notable. During the economic crisis, continuous investments in aviation infrastructure and modern aircraft supported the continued expansion of the sector. According to a report of GCAA, the elements intrinsic to the market in the UAE that likely have led to this growth are:
Business travel, given that the UAE economy is the business hub of the region Large population of expatriates, generating VFR traffic (Visiting Friends and Relatives) Religious traffic around Hajj and Umrah Labor traffic within the Arab world, and between the Gulf and Asia Low average age of the fleets, leading to somewhat lower operating costs Modern airport infrastructure encouraging hub operations between the East and the West
Aviation Safety and Security

Even though the UAE has an enviable aviation safety and security record, the country must continue to strive for the highest standards of safety and security. To satisfy the demands for improved standards of safety and tighter security, the regulatory bodies are working in conjunction with the aviation industry, however, industry is driven by commercial interests. These economic pressures can affect all sectors of the civil aviation industry and could have an adverse impact on safety and security. It is, therefore, of crucial importance to the whole civil aviation community that the GCAA remains focused on aviation safety. Around the world, governments and airlines are regularly engaged in discussions on a wide range of significant regulatory issues addressing different aspects of airline operations, the largest being safety and security However, approaches to managing these issues must be proactive rather than reactive. The focus to ensure sustainability must be directed on oversight and accountability. Without frequent and thorough auditing of the safety and security programs, even the best-laid plans can fail. 2011 was a very good year at the local level in the field of civil aviation in UAE. With the rapid pace of investment, growth and expansion in the various airlines, airports and associated sectors, the estimated current and future investments are now more than AED1.3 trillion. What strengthens this success at the local level is the growth of fleets of local companies, which will own by the end of 2011 more than 320 aircraft over five airlines, most notably Emirates Airlines with 171 aircraft, Etihad Airways with 70 aircraft, and flydubai and the Arab with 20 aircraft each as well RAK Airways with 5 planes.
UAE passenger traffic to hit 82.3 million

In February 2011, IATA director general Giovanni Bisignani said that Passenger traffic into the UAE will hit 82.3 million over the next three years, driven by a Middle Eastern rise in air travellers of 9.4 percent. Global air travellers will rise to 3.3 billion by 2014, up 32 per cent on the 2.5 billion carried in 2009, fuelled by strong growth from China. The Middle East is expected to be the fastest growing region, with the UAE, Kuwait and Jordan ranking among the 10 quickest growing countries for international traffic. With a growth rate of 10.2 per cent, the UAE ranks only behind China at 10.8 percent. IATA said China will be the biggest contributor to new air travellers, accounting for 214 million out of the total 800 million new passengers between 2009 and 2014.
Investments and Expansions

In a report in November 2011, Gulf News reported this: The UAEs investment in the aviation sector is estimated at US$136 billion, Sultan Bin Saeed Al Mansouri, Minister of Economy and Chairman of the General Civil Aviation Authority (GCAA), said. The UAE with its ideal location and profound aviation infrastructure has challenged the traditional travelling patterns in both Europe and the Far East by creating alternative global traffic hubs to the travelling public via airports like Abu Dhabi and Dubai. Our airlines today can connect any two points in the world with only one stop at their respective hubs, Al Mansouri told delegates to the 44th Annual General Meeting of the Arab Air Carriers Organisation (AACO) in the capital in his opening address. He said the dynamic and responsive business models developed by carriers in this region increasingly attract passengers traditionally flying with major world operators. He said: But our secret remains with our strategic geographical position, and of course by investing in the right technology, employing the best mix of people from various cultures, and constantly refining the best products. We envisage enhanced Arab regional cooperation through initiatives such as the Damascus Convention, which allows carriers to operate free of traffic rights restrictions within the region, said Al Mansouri. Dubai Airports is looking at adjusting arrivals and departures, redesigning local route structures and introducing new technologies based on performance-based navigation and new communication, navigation and surveillance systems. In June 2011, H.H Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, approved Dubais plan to invest US$7.8 billion in expanding airspace and airport capacity at Dubai International Airport over a 10-year period. The plan will see Dubai International Airport expanding its capacity from the current 60 million passengers per year to 90 million by 2018. By 2020, about 98.5 million passengers and over four million tonnes of air freight will pass through Dubai airports. The fleets and networks of Emirates and flydubai will grow considerably to accommodate traffic and capture market share. TheThe expansion would see the aviation sector accounting for 22 per cent of Dubais total employment and 32 per cent of the emirates GDP by 2020. In order to further support the growth of Emirates, a fourth concourse will be developed at Dubai International Airport by 2015. The airport currently has two concourses, with the third one due to open in late 2012. The strategy includes expansion of airspace, airfield, aircraft stands and terminal areas at Dubai Airport over the remainder of the decade in order to optimise investments, deliver timely capacity and create a robust revenue stream, which will fund the development of Dubai World Central in the long term. 8.5 million is Dubai airports projected passenger capacity by 2020 22% is Aviations share of Dubais employment sector by 2020 32% is Aviations contribution to Dubais GDP by 2020 4 million tonnes of air freight is expected to pass through Dubai airports by 2020
UAE companies and state agencies will invest US$136.12 billion in the aviation industry over the next decade to diversify the economy and make the country a global transport hub, according to the UAEs Minister of Economy. The UAE intended to capitalise on its transport and communications infrastructure. The backing includes new aircraft for the five flag carriers in the UAE, huge investments for new airport capacity throughout the seven emirates, and plans for Abu Dhabi to become a regional centre for aircraft maintenance, manufacturing and flight training. Over the next 10 years, the UAE will be investing AED500 billion in its aviation infrastructure improving connectivity and cementing its reputation as a key growth driver in global aviation. Abu Dhabi Airports Company (ADAC) announced investments to the tune of AED24.8 billion to improve the Abu Dhabi airport and the capacity to 40 million passengers a year from the present 7 million. Cargo handling capacity will also increase to 2.5 million tonnes a year. The most expensive element of the project is the US$6.8bn Midfield Terminal. The completion of the project is expected to be in 2015-2016. Sharjah intends to spend AED500 million and Fujairah AED160 million in airport facilities and expansions.
Issues and Priorities

Air traffic management is the single greatest threat to the development of aviation in the UAE. Looming airspace bottlenecks threaten to hold back the forecast growth of airlines in the region. Airspace bottlenecks are particularly concerning for Dubai. The aviation industry generates 25% of the GDP of the emirate of Dubai, either directly or indirectly. This has been forecast to increase to almost a third of Dubais GDP by 2020. 14 commercial airlines in the six-member GCC have over 650 aircraft on order between them, with more orders looming. The UAE intended to capitalise on its transport and communications infrastructure. The backing includes new aircraft for the five flag carriers in the UAE, huge investments for new airport capacity throughout the seven emirates, and plans for Abu Dhabi to become a regional centre for aircraft maintenance, manufacturing and flight training.
GCC Airports An update on expansions and investments

Bahrain
Bahrain has mapped out its economic vision to transform into a globally competitive economy by 2030. With the arrival of Gordon Dewar as chief executive of the Bahrain Airport Company in March 2010, the management team began work on several fronts to lay the foundations for change. In June 2011, Dewar announced the launch of an expansion project aimed at boosting capacity by 50% to 13.5 million by 2015. The project addresses all aspects of the terminal operations and passenger facilities and ensures that both capacity and quality improvements will be delivered throughout. The preliminary plan shows that the expanded airport will increase the terminal footprint by 40,000 square metres with room for 40 additional check-in counters. Four contact departure gates with air bridges will be added to the existing seven. Nine more remote departure gates will also be added. Other new features will include an expanded arrival baggage-reclaim area; with four more reclaim belts added to the current seven. Increased departure security facilities, a larger immigration processing hall and new airline lounges are also in the plan. Figures from the Bahrain Civil Aviation Affairs Air Transport Directorate indicate that passenger throughput between January and June 2011 declined by 16% to 3.6 million compared to 4.3 million during the same period in 2010. Cargo tonnage also dropped 16% from 166,511 tonnes to 139,569 tonnes for the same period The expansion and development work at Bahrain International Airport will be based on its current and future needs and that of its customers and the nation as a whole. By developing the airport to fit these needs, we will ensure that we deliver the best airport for Bahrain and strengthen Bahrains position as an aviation hub. The expansion strategy clearly puts emphasis on increasing non-aeronautical revenue; a source of income that generally helps fund investment in airport infrastructure. The plan for BAH calls for 3,000 square metres of retail space in addition to a recent retail complex that was built adjacent to the main terminal building. BAH has seen considerable refurbishment over the years. In 2006 a US$300 million investment launched the creation of a multi-storey car park, retail complex, a new perimeter fence, new security systems and the resurfacing of the main runway. Upgrades have been made organically over the years. Recent significant improvements included the building of our departures coaching station with five contact gates, and increasing the number of parking spaces for the public to a total of 4,200. Dar Al-Handasah, (Shair and Partners), the international engineering design and supervision consultants, will lead the US$11.6 million contract to provide the master plan and design for the latest expansion project. The design for the BAH initial phase is expected within the first quarter of 2012. Bahrain Economic Development Board data show that the kingdom is investing US$2.9 billion to upgrade its logistics infrastructure. With its strategic location, Bahrain provides easier access to the large economies of Kuwait, Saudi Arabia and Iran. In association with: Researched & Prepared by
The US$4.7 billion expansion plan for Bahrain international airport includes building a second terminal adjacent to the existing terminal. This will boost capacity to 13.5 million passengers a year from the current 9 million passengers. A second phase of work involves building Terminal 1A alongside the existing building and then demolishing and rebuilding the existing terminal. This will be known as Terminal 1B. The expansion will involve building new retail facilities, four or five new contact gates, nine remote gates and 40 more check-in counters. The expansion is expected to be completed by 2015. US-based Hill International won a four-year contract to provide project management services for the project and Frances Aeroports de Paris Ingenierie (Adpi) won the contract to prepare the master plan for the 30-year expansion of Manama airport. Dar al-Handasah has won the design and the supervision contract for the expansion of the existing terminal at Bahrain International airport. The design part of the project is expected to cost US$11.6 million.
Sultanate of Oman
Despite the continued global economic meltdown and geopolitical changes and unrest in the region, the Omani economy put up a good show in 2011 and will continue to expand in 2012, in part due to targeted government spending. The Sultanates economy is expected to post a growth rate of 5.5 per cent in 2011, with GDP projected to expand by 5 per cent in 2012. In 2012, the governments expenditure will increase by 10 per cent over the current years total. The Sultanates government has envisaged RO42.71 billion for the Eighth Five-Year Plan (2011-2015). The total projected revenue for the five-year period is estimated at RO37.495 billion, leaving a deficit of RO5.215 billion. About RO2.0967 billion has been approved for the massive expansion of Muscat and Salalah airports and for building four regional airports during the five years of the plan period. The regional airports are coming up in Sohar, Adam, Ras al Hadd and Al Duqm. Omans airport capacity is about to grow dramatically as the infrastructure is put into place to meet the potential demand. The total passenger traffic (including transit and transfer passengers) through Muscat International Airport has increased by 14 per cent to 5,345,386 passengers for the period ending October 2011 compared to 4,699,413 passengers for the same period last year. Statistics show an increase in the passengers arriving at the airport by 16 per cent to 2,706,432 passengers ending October 2011 compared to 2,326,355 passengers for the same period last year. The number of departing passengers has also increased by 14 per cent to 2,576,403 ending October 2011 compared to 2,266,202 for the same period last year. The rise in the movement of passengers at Muscat International Airport is attributed to the increase in a number of flights by some airlines operating from the airport, such as Oman Air, Air India Express, flydubai, Qatar Airways and Lufthansa.
Salalah Airport also witnessed an increase in the total number of arriving and departing passengers by 14 per cent (426,235 passengers) for the period ending October 2011 compared to 374,800 passengers for the same period last year. Today, the airport is clearly a work in progress with giant tower cranes toiling to meet the new vision to create a flexible new airport that will meet growth demands to 2050 and beyond. It is an exciting project expected to be open in 2014. There are four new airports in the plan. The royal city of Adam, the industrial cities of Sohar and Al Duqm and the tourist region around Ras Al Hadd will all have new terminals and fully equipped airfields. The airport has seen a 13% growth year-on-year which is expected to continue. The new airport will initially cater for 12 million passengers but has been designed with the flexibility to grow to meet demand with phases adding additional 12 million capacities until it tops out at 48 million. Munich Airport has been awarded the contract to ensure the new airport achieves operational readiness at the time of handover. Major contracts have been awarded with Thales providing the air navigation systems, Indra the ATM and Raytheon the radar. Betchel is producing the new midfield terminal and Turkeys TAV joint venture with CCC is undertaking the civil works, including the new 4,000 metres runway, taxiways and aprons. Vanderlande is developing the baggage-handling works and the UKs Ultra has the IT contract. Once the airport is handed over, the existing runway will be decommissioned for complete renovation. It will be A380-capable. At the heart of the new development is the 97 metre tower. Designed to soar above the different building phases it will give controllers a clear view across the entire field. New maintenance hangars will be built and outside the perimeter will be a new headquarters building for the civil aviation authority and Oman Air. The growth at Muscat is mirrored at Salalah, which currently serves fewer than half-a-million passengers. The new airport is designed to cater for one million when it opens in 2014 and, like Muscat, has the flexibility to be built in incremental one million passenger stages to a maximum of four million. The Engineering, procurement and construction (EPC) contract for expansion of the existing Salalah International Airport involves construction of a new terminal to be relocated north of the runway, covering a floor area of 55,000 square meters, 8 passenger boarding air bridges, a car park to accommodate (1,900) vehicles, including a sea cargo terminal and upgrading of the runway and taxiway system. Muscat International Airports EPC contract is to build a new terminal at Muscat International Airport with capacity to handle 12 million passengers a year, including a runway, taxiway system, aprons, roads, utility buildings and other civil works. In addition to above, design and construction of a 100-metre tall air traffic control tower comprising 25 floors, together with a number of ancillary buildings, including an air traffic and meteorology complex; a crash, fire and rescue facility, a data centre and training facilities to support the passenger terminal at Muscat International Airport.
For the Ras al Hadd International Airport project, final touches are being made to the designs of the third phase of Ras al Hadd Airport which includes the construction of the terminal with a total area of 8,000 square metres and other necessary structures. The implementation of this phase is expected to begin by 2012. Construction of an airport terminal at Sohar with a capacity of 500,000 passengers a year, a 50,000-tonne-peryear air cargo terminal, including runway and associated works, a fire station, fuel tanks, lighting and drainage system. Design and construction of a new airport in Duqm town is for the facility with capacity to handle 500,000 passengers a year. Adam Towns new airport project is for a facility with a capacity to handle 250,000 passengers per year. Construction work of the new state-of-the-art Muscat International Airport is moving at a fast pace and the new airport is expected to become operational by October 2014. The construction work may finish by April 2014. It will be followed by about six months of soft operations of the transitional phase to move from the old building to the new building. The new airports at Muscat and Salalah are being built at an estimated total cost of RO2 billion. The entire project is moving at a very fast pace. The enabling work of the new Muscat International Airport started in 2006 and had to go through some design changes following the unusual weather conditions in 2007. Cowi, in a joint venture with Larsen Architects and Copenhagen Airports, are the principal consultants on the expansion of Muscat International Airport in Oman. ADPI, the subsidiary of Aeroports de Paris, are the project management consultants for the development of airport and the project has been divided into various main contracts and standard national contracts. BechtelENKA-Bahwan Engineering Company - Joint Venture, Towell Construction Co. LLC, Ultra Electronics, Munich Airport, Vanderlande Industries, Indra and Thales are in charge of the different contracts of the project. Utility buildings comprise of three primary electrical substations, two chiller plants, water reservoirs and a new fuel farm. A total of 51 buildings will be constructed covering an area of 27,250 sq. metres. The road networks comprise in excess of 56 km of multi-lane carriageways, two major interchanges and eight bridges. The new airport at Muscat will have 12 new buildings, including the Air Traffic Control Tower, which, when completed, will be the tallest structure in Oman standing at 100 meters in height. It will consist of 24 floors The passenger terminal, with a total area of 334,995 square metres, will initially cater to 12 million passengers per year, and will be expandable to cater to up to 48 million passengers in its final stage. The passenger terminal building will host the arriving passengers at the lower level and the departing passengers at the upper level. The baggage handling system (BHS) will consist of state-of-art check-in facilities at the departure hall of the passenger terminal. It will use the latest technology for security screening of the baggage for departure and transfer of baggage along with customs screening for arriving baggage. The BHS system in Muscat will be designed for 12 million passengers per annum and 1 million passengers in Salalah during the first stage.
A new civil aviation headquarters building will also come up at the airport in the northern development area. Omans Ministry of Transport and Communications said that the four airports currently under construction in the Sultanate can create as many as 4,000 jobs upon completion in 2014. Airports in Sohar, Duqm, Ras Al Hadd and Sur are under different phases of construction to cater to the growing aviation needs in the region. These airports will have terminal buildings, cargo facilities, catering units, aircraft hangars, maintenance of equipment and duty free shops as well as air traffic controllers and technicians. The Ministry of Transport has already awarded contracts worth over RO1.5 billion (US$3.9 billion) for the construction of the four airports, including the purchase of air navigation equipment such as radars, transmitters, receivers and other air surveillance instruments. Apart from the four new airports under construction, the Muscat and Salalah airports have started an expansion programme. Both airports will have new terminal buildings, cargo facilities, runways, parking facilities and control towers. Both new airports and the expansion of the existing ones will cater to the growing demand of tourism and business visitors. Currently, Muscat International Airport can handle only one million passengers a year. When completed, it can cater to 12 million passengers annually. Further expansions planned in three subsequent phases will further boost the airports annual capacity to 24, 36 and 48 million passengers when the demand is required. The new terminal at Salalah Airport will be expanded to cater to one million passengers annually by 2014. The airport has been designed to allow for further expansions to cater for future demand growth of two to six million passengers annually. Upon completion in 2014, Muscat International Airport will be equipped to handle 12 million passengers annually. Muscat International Airport is the main airport in Muscat, Oman. It is the hub for the national carrier Oman Air. The distance from Old Muscat is 30 km and it is 15 km from the main residential localities. The airport will be upgraded to 12 million-passenger capacities during the initial stage and subsequently to 48 million. The airport was named the tenth fastest growing airport in the world by Airports Council International for the year 2011. In September 2011, KONE won an order to supply 122 elevators, 60 escalators, and 39 auto walks to the redevelopment of Muscat International Airports passenger terminal. Altogether this equipment will enhance the People Flow experience and ensure smooth and efficient travel for up to 12 million passengers annually at the Muscat International Airport. The terminal expansion will make the Muscat International Airport one of the most important transportation hubs in the Middle East region. The order was booked in Q3 of 2011. The new terminal at Muscat International Airport would be completed by 2014 and will have the capacity to handle 12 million passengers annually. Further expansions planned in three subsequent phases will ultimately boost the airports annual capacity to 24, 36 and 48 million passengers when the demand is required.
Qatar
In June 2011, Doha International Airport (DIA) opened its brand new Terminal B a dedicated departures facility for foreign airlines. All passengers travelling on flights with over 30 international airlines will now depart from Terminal B, while all Qatar Airways flight departures will continue to operate from the existing Departures Terminal now renamed Terminal A. The new-look Terminal B, situated adjacent to Terminal A, is the result of a six-month transformation of the old arrivals building, which closed down in December last year and moved to a new location on the edge of the airport. Both Terminals A and B share the same Duty Free shopping, lounge facilities and parking at DIA. The move to separate flight departures follows the continued rapid growth of the State of Qatars national carrier, Qatar Airways, which has meant infrastructure changes at the airport to cope with the expansion. After the opening of the new stand-alone Doha Arrivals Terminal in December 2010, the inauguration of the new Departures Terminal B was the latest step in the infrastructure improvements to handle the increased influx of passengers through the airport. The upgrade of Doha International Airport is part of a multi-million dollar investment in improved facilities ahead of the opening of the New Doha International Airport, which promises to be one of the most advanced airports in the world when it opens in 2012. Highlights of the new terminal include an enlarged check-in area with 35 counters, an online check-in lounge, a dedicated customer service desk for oversized luggage, a currency exchange bureau, ATM machines, a new hightech baggage handling system, and food and beverage outlets. There will also be an enlarged 600 square metre immigration hall featuring 10 counters and three e-gates. Passengers walk through into the common airside environment of Terminal A and have access to the same present-day retail shopping, airport lounges, prayer rooms, food court and other facilities. Terminal A will see a more spacious check-in area and additional boarding gates over the next few months and a significant revamp of the Oryx Lounge. The Oryx Lounge, located airside on the upper level of DIA, caters to First and Business Class passengers of other airlines, or can be accessed for a nominal fee of US$ 40 per person when travelling in Economy Class on any carrier. The lounge offers a business centre, shower facilities and a wide selection of refreshments and allows travellers to relax and unwind during longer transits. Doha International Airport is managed and operated by Qatar Airways, the national airline of the State of Qatar Qatars only international airport has received several upgrades since November 2006, including the opening of Qatar Airways exclusive Premium Terminal for First and Business Class, the expansion of the airports Eastern Apron, increased aircraft parking space, a dual carriageway perimeter road to the Main terminal, and the establishment of a new Satellite Transfer terminal.
Qatar is building a brand new replacement airport called the New Doha International Airport (NDIA). The airport is being constructed 4km from the existing facility on a 5,400-acre site. The new airport is a response to a projected demand for additional international passenger capacity to the region. The current airport handles 4.2 million passengers a year, whereas the new airport will be able to handle 12.5 million a year after the first phase of construction in 2011. After its ultimate development in 2015, the airport will handle 50 million passengers, two million tons of cargo and 320,000 aircraft landings and take-offs each year. Phase one will open together in 2011, giving the airport a passenger capacity of 24 million a year and allowing the transportation of 750,000 tonnes of cargo. The airport is being constructed near the city of Doha and, when finished, will be approximately two-thirds the size of the city (12 times larger than the old airport). Qatar Civil Aviation Authority (QCAA) and the New Doha International Airport Steering Committee are the bodies in Qatar responsible for the airport construction. During the construction process the old airport will be expanded and refurbished at a cost of $140m. This will increase its capacity to 7.2 million passengers a year for the interim period. The contract for the first phase of the airport construction and the planning and design phase was awarded to Bechtel Group Inc. The project started in early 2004 with a detailed planning and design phase. Bechtel produced a master plan of the new airport. The work continued in 2004 with a massive land reclamation project since over half of the area of the new airport will be constructed on land reclaimed from the sea amounting to 10.9 square miles. The land reclamation required more than 62 million cubic metres of fill (four large dredgers) to complete the project. The reclamation was completed in early 2005 and the reclaimed area required 13 km of armoured seawall to protect it, which is under construction. The removal of 6.5 million cubic metres of household waste from a dump to a remote engineered landfill was constructed meeting environmental standards. The new airport will feature two of the longest commercial runways in the world, an 85m-high control tower, a 510,000 square metre passenger terminal with 40 gates, one cargo terminal, a 150,000 square metre aircraft maintenance centre, one separate terminal for the Emir of Qatar, a general aviation terminal, one of the worlds largest airport catering facilities, air traffic control equipment and security systems. The first phase construction of the new airport will include two runways of 4,850m and 4,250m length designed specifically to accommodate the new Airbus A380-800 superjumbo. A three-storey terminal building is also being constructed, including 40 contact gates and 350,000 square metres of floor space, of which 25,000 square metres will be dedicated as retail space. In addition, there will be seven remote gates and eight hardstand aircraft parking bays.
There will also be three new major road interchanges to provide access to the new airport from the city and surrounding areas (the airport itself will have 17km of dual-carriageway and single-carriageway roads). To facilitate the passengers, the airport will have a five-star luxury hotel and a three-star transit hotel. The first phase will allow New Doha Airport to service two A380-800 superjumbos at the same time. The complex will also include a centrally located 48,000 square metre cargo terminal (750,000 t/y) with 15 metre clearance, which will be among the 20 largest cargo terminals in the world. There will also be hard standing areas for the passenger terminal, an 80m ATC, hangar space for two A380-800s and three A340s and a 70,000 square metre maintenance centre with mezzanine levels for access to aircraft top decks. For the convenience of passengers there will be an automated storage and retrieval system. Major cargo will be transported in unit load devices (ULD). The system will have a capacity to accommodate up to 1000 ULDs. Import cargo consignments and those awaiting loading in the containers will be stored in the automated storage system. The cargo system will include advanced facilities such as high-bay storage areas for import and export of cargo, work stations for make-up and breakdown of ULD loads, storage areas of special cargo such as hazardous materials, valuable items, cold storage, perishable foods and medicines. NDIA will be the central maintenance hub for Qatar Airways international fleet. Located in the midfield area it will be capable of handling up to eight wide-body aircraft, including A380s, and 11 aircraft. The base will feature a single large hangar containing heavy maintenance and light maintenance bays. The columnfree design of the hangars interior ensures flexible aircraft parking and maximum maintenance efficiency. The workshop building at the back of the aircraft hangar bays will provide specialised maintenance and automated spare parts storage. This will include specialist workshop areas for the maintenance of engines, avionics, wheels and brakes, structures, interiors, painting, galleys, in-flight entertainment systems and safety equipment. The design of the roof structure will make it a landmark structure in international aviation. The roof will have a wave-like structure. The transparent faade of the terminal beneath the roof will emphasize the roofs curves. The elevated crescent-shaped ATC tower, topped by a glazed control room, will occupy a central control between the two parallel runways and airside facilities. There will also be a training room that can double as a control room in case of emergencies. The terminals undulating stainless-steel roof will be finished with a new non-reflective coating to eliminate glare. The baggage system will be monitored through an automated baggage handling system (BHS) by the use of radio frequency identification devices (RFID). It will also augment the in-line security system, which incorporates CTX level three for explosive detection.
The airport system will be connected by a fibre-optic backbone system and the airport operational database to enable further need of additional cabling. Air traffic controllers will monitor activities using high-resolution LCD monitors. When finished, the check-in and retail areas will be about twelve times bigger than the existing checkin and retail facilities. Qatar Airways will relocate its headquarters and training facilities to the maintenance complex at the new Doha airport when it opens. The first phase will allow the airport to serve two A380-800 superjumbos at the same time. In May 2006 Takenaka received a major construction contract from New Doha International Airport. The 24 month 27 billion contract covers the construction of the Emiri terminal (9,100m and also a 1,700m parking area). This is a terminal for the exclusive use of the royal family and VIPs on state visits, which will feature a multilayered arch-shaped curved design resembling a yacht sail. In addition Takenaka have been asked to construct a new car park building (two floors for 1,409 cars) and a mosque (2,000m and a radius of 47m and a height of 13m, with a minaret 37m high). When the terminal is completed it will have moving walkways to aid in movement of passengers around the complex. There will also be CO2 and heat occupancy sensors, a smart building technology so that services can be tailored according to passenger numbers (regulate air intake). In addition the wave like roof of the terminal will be tinted to prevent glare from the sun and to conserve energy. In May 2007, ARINC and Thales were awarded a US$75 million contract for the IT, telecommunications and security systems at the airport. These will consist of ARINC iMuse Common-Use Terminal Equipment (CUTE) at over 100 check-in desks. In addition ARINC will also install the information exchange infrastructure for data movement across the airport. Thales will work on the safety and security systems and the local area network (LAN). Both ARINC and Thales will be involved in project design and management. Further technology is being installed on the runway and Qinetiq (a UK defence contractor) will provide Tarsier, a radar-based runway debris detection system. Three radar systems will scan the runway 24 hours a day and locate any debris or objects which could damage aircraft or be sucked into engines. New Doha Airport will be able to handle 12.5 million a year after the first phase of construction. The second phase of construction will include the addition of a further 16 contact gates and an extension of the terminal building to 416,000m. In addition, there will be a suspended monorail system for passenger transit through the terminal. A further luxury hotel will be constructed to accommodate the additional passenger capacity of over 25 million a year passing through the airport. The third phase will include the addition of a further 40 contact gates, which would bring the final total to 80. To accommodate the extra gates, the terminal building will extend to 416,000m and will be capable of handling over 50 million passengers a year, 320,000 aircraft movements and two million tons of cargo.
The projected date for final completion is 2015. When fully completed the new Doha airport will be able to service six A380-800 superjumbos simultaneously. The airport will be the first in the world purpose-built to accommodate these aircraft. Some 50,000 jobs will be created when all the three phases of the US$14 billion New Doha International Airport (NDIA) are complete. When fully operational, the airports annual passenger handling capacity will reach 50 million. Studies conducted by us reveal that when all the three phases of the NDIA are ready, 50,000 jobs will be created. The first and second phases of the NDIA will be opened by the end of 2011 and the airports initial passenger handling capacity will be 25 million. The airport will be surrounded by five artificial islands and will have as many as 175 check-in counters. It will be one of the first airports to be designed with the new Airbus A380 in mind and will be the new base for the Qatar Airways fleet. Qatar is vying with Abu Dhabi and Dubai to become the Gulfs transit hub with all three boosting airport capacity. Its flagship airline Qatar Airways, which has a fleet of almost 70 planes, has been expanding rapidly. The carrier hopes to add 42 planes in four years and has orders for more than 220 planes, worth US $40 billion.
Kuwait
Kuwait International Airport is planning to increase the capacity of the travelers coming in and out of the airport to 13 million initially, and be able to expand further at a later phase to 50 million passengers. At present, the airport has a capacity of 5.69 million per year and can accommodate up to nearly 46,000 planes. The terminal has three symmetrical wings that have gates coming out of each of the wings. Each wing is 1.2 kilometres wide and all extend from a dramatic 25-metre-high central area. Work on the airport will start in 2012 and is due to be completed in 2016/17. Kuwait International Airport has unveiled its US$2.1bn expansion plans, which will more than double its annual passenger capacity. The master plan for the new terminal building, designed by renowned UK-based architect firm Foster + Partners, will see the airports annual passenger capacity increase to 13 million passengers per year, with further development allowing it to accommodate up to 50 million passengers per year. At present, the airport has a capacity of around 5.69 million passengers per year and can accommodate 46,930 aircraft. The new terminal is estimated to cost around $2.1 billion to complete and work will start in 2012 and is due to be completed in 2016/17. The design will have a trefoil plan, comprising three symmetrical wings of departure gates with each faade spanning 1.2 kilometres. There are also plans to build a metro linking the airport to the city centre. The Ministry of Public Works announced that the project will start in 2012 and will be finalized between 2016 and 2017. The expansion project is expected to cost US$2.1 billion.
Foster + Partners said the scale of the airport shows Kuwaits great foresight in recognising the benefits of strategic investment in future infrastructure. The environmental ambitions driving the project are equally impressive. The emblematic three-winged form will be as memorable from the air as from the ground a new symbol of contemporary Kuwait, which resonates with its rich culture and history. The designing works for constructing arrival and departure hall 2 of Kuwaits airport started in March 2011 with the aim of reaching a capacity of 13 million passengers annually along with utilities including a VIP lounge, reception, departure halls and a multi-storey car park that can absorb 4,500 cars as a minimum. The costs of constructing this hall ranges between KD350 million and KD500 million, and the actual cost will be finally settled following the completion of the designing works, while the contract was already signed with the engineering consultant to hand over the hall in 2014. The airports enlargement which will cover an area of 504,257 square metres is one of five pioneering projects within the development plan with the terminals floor space covering 130,000 square metres and including 28 gates, with 8 of them allocated for Airbus 380 aircraft, besides a transit passenger hotel and service area. The Ministry of Public Works had previously reviewed the designing notions submitted by the engineering consultant and made its remarks on them with the aim of developing the grand design of the project. It is expected for the designs to be finalized by March 2012, and it will include a study and design of the new terminal building of Kuwait International Airport with a capacity of 13 million passengers annually as well as the management of the whole building. The period of studying and designing will last for 24 months, while the time of overseeing the projects execution is 36 months, and the total cost of the two phases will be KD27 million and it is expected for the construction works to start in May 2013. The project is a big strategic one within the governments plan of action, and preparations have been made for its implementation some time ago through coordination between the Directorate General of Civil Aviation, the Ministry of Public Works and the private sector in order to keep up with the future needs under the population increase. The Directorate General of Civil Aviation, owner of the project, is currently discussing paperwork of the second stage of the designing and overseeing an agreement with a global engineering consultant bureau. The project is composed of several stages including studying, designing, inviting bids, selecting the suitable bidder and execution, though the consultants department of projects department at the Ministry of Public Works currently oversees the project. Implementation of the project will start in May 2013 and the time span of execution is expected to go over three years. The terminal is one of the important projects listed within the governments development plan, which has been approved by the National Assembly, parliament, in addition to other big development projects which will be carried out at Kuwaits International Airport including the expansion and lengthening of two runways. Construction work on Kuwaits expanded KD900 million ($3.2billion) airport terminal will be completed by the fourth quarter of 2016, the Ministry of Public Works said.
Design for the terminal, which is forecast to more than double annual passenger capacity at Kuwait International Airport, will be finalised in March 2012, the ministry told state news agency KUNA. The design will have a trefoil plan, including three wings of departure gates with each faade spanning 1.2 km. There are also plans to build a metro linking the airport to the city centre. Kuwaits existing airport has a capacity of around 5.69 million passengers per year and can accommodate 46,930 aircraft. The expansion is expected to increase passenger capacity to 13 million a year, with further development increasing capacity to 50 million a year. The state-of-the-art terminal building will significantly increase the aviation hubs overall capacity, while setting a new environmental benchmark for airport buildings. The airport will initially accommodate 13 million passengers per year, with the flexibility to increase to 25 million passengers and to accommodate 50 million passengers with further development. To further aid orientation, the building is planned under a single roof canopy, punctuated by glazed openings that filter daylight, while deflecting direct solar radiation. The canopy extends to shade a generous entrance plaza. The project was implemented under a decision by Kuwaits Council of Ministers in 2008, in coordination with the Department of Civil Aviation. Sustainable measures, such as roof-mounted photovoltaic panels, will help the building become the first passenger terminal in the world to achieve LEED Gold status. The scale of the airport shows Kuwaits great foresight in recognising the benefits of strategic investment in future infrastructure. The environmental ambitions driving the project are equally impressive. To aid orientation, the building is planned under a single roof canopy with minimal level changes. The canopy extends to shade a large entrance plaza and is supported by tapering concrete columns inspired by the traditional dhow sailing boats. The terminal is strategically located to enable future expansion to accommodate up to 50 million passengers a year. The total area of Kuwait International Airport is estimated to be about 6.8 square kilometres. The new building is expected to accommodate 13 million passengers per-year and includes 28 gates, a hotel for transit passengers, waiting halls and a large number of car parking spaces. The futurist looking structure includes three symmetrical wings that span nearly one mile. The building will be made of concrete, which provides thermal mass and cooling. The design also takes advantage of the countrys more than 300 days of sunshine a year. The airports roof, a single canopy, will be outfitted with photovoltaic panels to capture the abundance of the sun and turn it into solar energy. The roof will also be punctuated by glazed openings that filter daylight, while deflecting direct solar radiation. Architects have designed a flexible master plan for the site, to enable additional growth in future years. Initially, the terminal will be able to accommodate 13 million passengers per year, with the flexibility to increase to 25 million passengers and later, up to 50 million passengers with additional development.
Kingdom of Saudi Arabia

The Kingdom of Saudi Arabia occupies over 70% of the Arabian Peninsula, covering an area of about 2.25 million square kilometres, with a population of 28 million. There are 26 domestic airports in Saudi Arabia and four international airports: King Fahd Airport in Dammam, King Abdulaziz Airport in Jeddah, King Khalid Airport in Riyadh, and Prince Mohammad Bin Abdul Aziz Airport in Medina. The General Authority of Civil Aviation (GACA) has disclosed plans to expand and build around 28 airports in the coming twenty years. Plans are underway by GACA to spend between US$10 billion and US$15 billion on building, developing and upgrading airports by 2020, in cooperation with private investors. Current Projects in Saudi Arabia are: King Abdulaziz Airport in Jeddah: The Saudi Binladin Group won a US$ 7.21 billion contract to build a new terminal and infrastructure at Jeddah international airport. The project, to be completed over 36 months, will expand the capacity of the King AbdulAziz International Airport to 30 million passengers per year from the current traffic of 17 million passengers. Jeddah airport is designed to accommodate the worlds largest aircraft, including A380s and increase the airports annual capacity to 80 million passengers a year by 2035. Airport People Mover: Canadas Bombardier Transportation has signed a US$ 96 million contract with Saudi Bin Laden Group to design, build, operate and maintain a Bombardier Innovia APM 300 system to ferry passengers between terminals at the Jeddah airport. Madinah Airport: GACA plans to revamp the Madinah airport to increase its passenger handling capacity to 14 million people a year. The airport currently handles about 3.5 million passengers a year. The expansion involves the construction of a new passenger terminal, the renovation of the existing runway and the possible construction of a second runway, which will be split in two phases. The project could cost a total of US$2.4bn to develop. It will be the first airport project to be developed on a public-private partnership (PPP) basis. GACA has already invited the eight qualified consortia to bid for the US$1.5 billion first phase, which involves the development of airside and landside facilities at the airport under a long-term concession. The International Finance Corporation (IFC), part of the Washington-based World Bank, is acting as the lead adviser to GACA. Najran airport expansion project: Design and construction of 20 buildings, including a new terminal along with upgrading of the existing 3-kilometre runway, airfield lighting system and other airside infrastructure works Abha Airport Project: Netherlands Airport Consultants has completed the master plan for the expansion which envisages 5 million passengers per annum. It is expected that detailed design will be completed this year and construction will start in 2012.
Qurayyat: Qurayyat airport is strategically located on the Saudi Jordanian border. SaudConsult is handling the detailed design of this upgrade. Tenders for construction of the new design will be issued shortly after completion of a detailed design. Project will be completed at the end of 2012. Arar Airport: Talal Adham Consultants are handling the detailed design, which should be completed soon. Tenders will then be issued for the construction. Riyadh Airport: GACA has approved the expansion plan for King Khaled International Airport in Riyadh. The projects first phase is aimed at increasing the airports annual capacity from 14 to 25 million passengers. GACA is planning to assign a master developer that will have a long-term ground lease to manage the development and operation of the new terminal in addition to new hangar facilities. As part of the procurement process, GACA will later assign two or more fixed-based operators to provide private aircraft and passenger-handling facilities at the terminal. Hail Airport: GACA and Al Mal Investment Company (Al Mal), the investment arm of the M.A. Kharafi Group of Kuwait, signed a Memorandum of Understanding (MoU) to build the Hail International Airport in the Prince Abdulaziz Bin Musaed Economic City (PABMEC) in Hail. The new Hail airport plan consists of expanding the runway to 4-km, improving the taxiway, drainage system and terminals. The concept of the US$150 million plan is still under design. However, this is not due to be completed until 2025 and will primarily be a cargo airport, linking in with the development of the Hail economic city, which will focus on logistics. Taif Airport: Plans are underway to build a new airport in Taif. The new regional airport will be located 30 km northeast of the resort city and is anticipated to help boost tourism in the area and ease pressure on King Abdulaziz International Airport in Jeddah. ZuhairFayez Partnerships have been awarded the contract to produce the Master plan and detailed design. These designs should be completed by the end of 2011. Jizan Airport: Plans are underway by GACA to build King Abdullah Airport near Jizan Economic City. The new high-tech airport will have a passenger terminal to accommodate three million passengers annually and will be tendered for developers in 2011 after the design is completed by the Veritas Design Group of Malaysia. The airport facility would include a control tower, hangar, air cargo zones, fire extinguishing and rescue buildings including buildings for maintenance and service facility. Jizan Airport should be functional by 2015. Makkah Airport: GACA has received the green light to build a new international airport on the outskirts of the holy city of Makkah. King Abdullah Economic City International Airport: Plans are underway to build an international airport in Rabigh as part of the King Abdullah Economic City. The new airport is expected to serve both the economic city and nearby areas. Qassim & Al-Jouf airports: GACA has recently announced plans to develop two new airports in Qassim and AlJouf.
Airports Upgrading
GACA is overhauling several domestic airports. Almabani General Contractor was awarded an US$80 million contract to upgrade the following airports: Al-Wajih, Arar, Al-Gurayat, Al-Qasim, Hail, Najran, and Taif. These upgrades will enable these airports to cope with the fast developments taking place in the Kingdom and enhance their capabilities to serve as a major hub in their respective regions. Saudi Airport Cities Saudi Arabias three main international airports in Jeddah, Riyadh, and Dammam will be turned into airport cities. The process is underway to build next to these airports huge commercial offices, malls, hotels, conference halls, and service agencies. Each airport will be a separate city where people can live, shop, study, and attend international conferences, in addition to enjoying many other services. Saudi Arabia announced its plan to open up its skies to foreign airline companies. Prince Fahd bin Abdullah, president of the General Authority of Civil Aviation, said GACA would invite tenders in the third week of January from Saudi and foreign airline companies as well as foreign investors to operate domestic and international flights from Saudi airports. GACA is now working with a specialized consultant to complete some procedures related to tenders to select and license new operators. GACA said it would provide airline companies that make the best offer with all facilities to operate domestic and international flights successfully. With a population of 27.5 million spread across a large country, Saudi Arabia has one of the largest domestic travel markets in the Middle East. However, just two airlines Saudi Arabian Airlines and nasair operate on domestic routes. The GACA believes the two airlines are not sufficient to meet the demand for domestic and international travel. There are four major international airports in Saudi Arabia, as well as 23 smaller domestic airports, some of which also serve international traffic. Domestic traffic at Saudi airports increased 2.3% over 2010, to 22.6 million passengers, but passenger numbers are still below those seen in 2007 and growth has been almost flat for the last three years. On 7 August 2011, the General Authority of Civil Aviation (GACA) opened the new international terminal at Prince Muhammad International Airport in Madinah that can handle 35 flights daily and improve services to pilgrims. The new terminal has the capacity to accommodate 600 passengers per hour, GACA said, adding that the capacity would double to 1200 passengers once the second phase of the airport project is completed. The second phase includes construction of the first floor, which was projected to be completed by the end of September 2011. Efforts are also under way to expand the airports aircraft parking facility to accommodate five large-size planes at a time. Earlier in 2011, GACA completed construction of two passenger lounges at the airport for Umrah passengers. Since the beginning of the 2011 Umrah season, the airport received more than 700,000 pilgrims who arrived and departed on 2800 flights.
GACA intends to increase the airports monthly capacity from 400,000 passengers to 1 million. The Madinah Airport expansion has reduced the pressure on King Abdulaziz International Airport (KAIA) in Jeddah, the main gateway for foreign pilgrims. Saudi Arabias airport traffic has reached 50 million passengers annually and is expected to exceed 80 million within the next 10 year. Saudi Arabia is also planning a 27-billion riyal airport in Jeddah, its second largest city, and plans to launch sukuk within one or two months to help finance the project.
Air Traffic Movements in GCC

The UAE
2000
1950
Centre for Asia Pacic Aviation
12.0%
10.0%
1900
8.0%
1850
6.0%
1800
4.0%
1750
2.0%
1700 Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Total % change
0.0%
Source: Centre for Asia Pacific Aviation and UAE GCAA In 2010, the daily movements in the UAE amounted to 307, and in 2011 it was projected to reach 365 per day. In 2020, the movements will go up to 439 per day and in 2030, it will reach 598 per day.
Aircraft movements in Dubai alone are expected to increase from 307,000 in 2010 to 560,000 by 2020. Airport investment commitments across the UAE are just under US$40 billion for the next 10 years. In the strategic plan 2011-2013, the General Civil Aviation Authority (GCAA) provided insights into the UAE Aviation Sector: Overall aircraft movements in the UAE are expected to grow to 620,000 in 2012 and 663,000 by 2013 from 481,000 in 2007, including local and foreign airlines, general aviation, private operators and freighters. There has been a noticeable growth in the number of airline personnel, which has resulted in approximately a 33% increase in the number of licenses issued by the Authority. It was only 2661 in 2005. The UAE has a total of 120,000 square kilometers of airspace, with 35 international air corridors. Today, more than 50 percent of UAE airspace is comprised of aerial exclusion zones restricted to military use. To compensate for this shortage and the rapid growth of aircraft movements in the UAE airspace, the GCAA has heavily invested in adoption of new technologies to optimize the use of available airspace capacity including: A state-of-the-art air traffic control center, the Sheikh Zayed Centre, was launched in 2009. A new area navigation system, RNAV 1, was adopted.
Oman
Passenger traffic reached record numbers at Muscat International Airport. For the first time in history, passenger numbers exceeded 6 million, in actual 6.4 million passengers travelled through the airport in 2011 compared to 5.7 million passengers in 2010, which is an increase of 12 %. The highest month of the year was in July 2011 with 623,119 passengers travelling. The highest day of the year was on Thursday 22 December 2011 with 23,613 passengers travelling, this being the weekend before the Christmas holidays, it also coincides with the school mid-term holidays where majority of expatriate families tend to travel abroad. The passenger numbers reflect the positive trends that the aviation industry is witnessing in Oman, the record passenger numbers is being driven by a number of factors including fleet and route expansion by the national carrier Oman Air, increase in capacity and frequency by the existing airlines, this in turn is being fuelled by the growth and development of the tourism industry within the country as well as strong commercial, industry and economic activity. Two new airlines started flights to Oman in 2011 -IndiGo and Ethiopian Airlines - this will contribute to the positive and considerable growth for passenger traffic at Muscat International Airport during 2012. Muscat International Airport is currently served by 29 scheduled airlines and is directly connected with 57 destinations in 28 countries. This is the highest number of airlines and destinations connecting the airport to the world during the history of Muscat International Airport. The highest region for passenger numbers is the Indian Sub-continent which represented 2.5 million passengers, followed by the (GCC) Gulf Cooperation Council Countries which represented 2.2 million passengers. Other regions such as Domestic, Middle East, Africa, Europe and the Far East also witnessed an increase in passenger numbers. Passenger traffic has also reached record numbers at Salalah Airport as for the first time in history, passenger numbers exceeded half a million passengers, in actual 513,278 passengers travelled through the airport in 2011 compared to 455,297 passengers in 2010 which is an increase of 12%. The highest month of the year was during the Khareef season of July 2011 with 64,338 passengers travelled. In association with: Researched & Prepared by
Bahrain
Aircraft movements in Bahrain increased by an average of six per cent annually during the 2000-2010 period. In the year 2000, there were 60,072 aircrafts movements, which increased to 106,356 in 2010.
Saudi Arabia
Saudi domestic air travel market is by far the largest in the Middle East. With more than 23 million domestic passengers in 2010, it accounts for just fewer than 30% of total domestic passenger traffic across the region.
Saudi Arabia passenger traffic and growth: 1997 to 2010

60 50 40 30 20 10 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Total % Growth
Source: Centre for Asia Pacific Aviation & Saudi General Authority for Civil Aviation However, the size of the domestic traffic market has stayed essentially static over the past four years, even with the end of Saudi Arabians monopoly and the debut of nasair and Sama. In 2010, traffic at the smaller Saudi domestic airports rose only 0.9% year-on-year, to just under six million passengers. Domestic traffic at the four major international airports at Jeddah, Dammam, Riyadh and Medina rose 2.8% to 16.6 million passengers.
millions
12% 10% 8% 6% 4% 2% 0%
Saudi Arabia domestic passenger traffic: Domestic and international airports

25
Millions
20
15
10
0 2006 2007 Domestic Arirports 2008 2009 2010 International Arirports Domestic total
Source: Centre for Asia Pacific Aviation & Saudi General Authority for Civil Aviation
Researched, Written and Prepared by a team of Aviation Media specialists for
Nadd Al Shiba PR & Event Management www.naddalshiba.com

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1700 Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Total % change

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