Grave infrastructure challenges as aviation industry set to ...| MENAFN.COM

Tuesday, 07 February 2023 12:00 GMT

Grave infrastructure challenges as aviation industry set to grow


(MENAFN- Gulf Times) Global aviation industry is expected to record phenomenal growth over the next 20 years, with millions of newer passengers taking to the skies, but rising demand may pose significant infrastructure challenges, especially in the Middle East.
The Middle East's aviation market is set to grow strongly over the next 20 years scaling up to 517mn passengers by 2036, a new IATA report has shown.
This means, the region led by the GCC, will maintain average compound annual growth rate (CAGR) of 5%.
Globally, IATA expects 7.8bn passengers to travel in 2036, a near doubling of the 4bn air travellers expected to fly this year. The prediction is based on a 3.6% average CAGR.
The biggest driver of demand will be the Asia-Pacific region over the next two decades. The region will be the source of more than half the new passengers over the next two decades.
The point at which China will displace the US as the world's largest aviation market seems to have moved two years closer since last year's forecast.
The global trade body of airlines now anticipates this will occur around 2022, through a combination of slightly faster Chinese growth and slightly reduced growth in the US.
The UK will fall to fifth place, surpassed by India in 2025, and Indonesia in 2030. Thailand and Turkey will enter the top ten largest markets, while France and Italy will fall in the rankings to 11th and 12th respectively.
While the projected growth in the global aviation industry is obviously good for economies worldwide, the fact remains that a crisis may occur if adequate infrastructure investments are not made urgently.
Air traffic management is struggling to cope with growth, while high costs at many privatised airports are burdening the industry.
A case in point is China and India, two fastest-growing markets in the world.
China will see 921mn new passengers for a total of 1.5bn and India 337mn new passengers for a total of 478mn by 2036.
Already, Chinese air traffic management is struggling to cope with growth, while high costs at India's privatised airports are burdening the industry.
According to Alexandre de Juniac, International Air Transport Association director general, some 34mn jobs and $700bn of economic activity supported by aviation across the Asia-Pacific region are expected to more than double in the next 20 years.
'But the realisation of these economic benefits is at risk if the region does not address the big long-term challenges of sustainability, infrastructure and regulatory harmonisation, said de Juniac in the International Air Transport Association's 20-year ‘Air Passenger Forecast'.
Maximising the potential benefits of aviation growth will depend on how the current levels of trade liberalisation and visa facilitation are being maintained.
Qatar's recent initiative to provide visa-free entry to nationals from more than 80 countries is certainly a good move in this direction.
But like some of our neighbouring countries, if trade protectionism and travel restrictions are put in place, the benefits of air connectivity will decline as growth would slow, resulting in fewer passengers and fewer jobs.


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