Middle East needs liberalisation and privatisation

Large-scale market consolidation and sub-contracting will shape the Middle East ground handling industry and drive overall revenues, according to a new report from global consultancy group, Frost & Sullivan.

With aggressive growth amongst the region’s air carriers, aircraft fleets and airports are all in various stages of substantial expansion. This creates significant opportunities in the supply of airside services. Frost and Sullivan estimates that the market which earned revenues of US$1.92 billion in 2008, will grow to $2.83 billion by 2015. Revenues from commercial aircraft are expected to constitute a major share as a result of a growing fleet size and greater averagecost of handling and maintenance.

But while the Middle East market offers great potential it is “predominantly monopolistic with challenges relating to imbalances in future demand and supply,” according to the report.

“The Middle East market for airside services comprising ground handling and maintenance is expected to experience robust growth because of the orderbacklogs in the Middle East coupled with the minimal impact of the economicslowdown on the regions passenger andair traffic,” said Frost & Sullivan VP &country director, South Asia-Middle East& North Africa, Y. S. Shashidhar.

“The region is projected to have 1,206 aircraft and 708 business jets that will result in the traffic growing by about 10 per cent within the Middle East.”

The cumulative effect of these factors reflects in the market growth in which aircraft movement across the region’s airports is anticipated to grow at a compound annual growth rate (CAGR) of 4.8 per cent between 2008 and 2015.