Last Updated: Sun Oct 17, 2010 00:17 am (KSA) 21:17 pm (GMT)

Arabs to spend $200 bn on aircrafts in 15 years

The combined Arab aircraft fleet has about 700 planes
The combined Arab aircraft fleet has about 700 planes

Arab countries are set to invest $200 billion in new aircrafts over the next 15 years and spend $103 billion in airport expansions as a response to a sharp increase in air transport propelled by steady economic and population growth, the Dubai-based electronic newspaper Emirates Business 24/7 reported.

According to the Cairo-based Arab League, the aviation sector contributed by $75 billion to the combined Arab GDP in 2008, and this amount was expected grow over the years.

The combined Arab aircraft fleet has about 700 planes, with an expected increase to 1,200 aircrafts costing nearly $200 billion the next 15 years, according to the latest figures from the Air Transport Association (IATA) published by a report by the Kuwaiti-based inter-Arab Investment Guarantee Corporation,

“This will increase the contribution of the sector to the GDP and allow regional states to face a steady rise in air traffic, including passengers and cargo amidst an expected pick up in economic growth during that period,” the report explained.

The report also showed that the increased growth in Arab aviation outpaced that in most other countries, with an annual increase of 10.3 percent during 1996-2006 against 3.3 percent in Latin America and 5.9 percent in Europe.

$103 billion in airport expansions

 Besides new aircraft, Arab countries have plans to invest around $103 billion in projects to expand their airports and build new facilities to face the steady rise in air traffic because of the business upswing and population growth 
The report by the Kuwait-based inter-Arab Investment Guarantee Corporation

Not only new aircrafts’ investment is required, an estimated of $103 billion will also be invested in airport expansions and more than half the funds are expected to be spent by Dubai and Abu Dhabi. Also, the new Maktoum Airport in Jebel Ali slated to be one of the largest airports in the world will take 40 percent of the total investments.

“Besides new aircraft, Arab countries have plans to invest around $103 billion in projects to expand their airports and build new facilities to face the steady rise in air traffic because of the business upswing and population growth,” it said.

The report said around $78.6 billion would be invested in the expansion of 10 major Arab airports, including those of Dubai and Abu Dhabi, where the number of passengers has increased to about 41 percent from 1997 to 2008.

“The expansions will expand the Arab airports’ capacity to nearly 400 million passengers annually in 2012,” the report said.

The investment breakdown

Around $50 billion would be invested by Dubai on Maktoum Airport while it will also spend about $4.1 billion on the expansion of the Dubai International Airport to raise its capacity to 40 million passengers.

In Abu Dhabi, the government is planning to spend about $6.8 billion on the expansion of its international airport and $200 million for Al Ain Airport. About $800 million would also be spent on Ajman airport.

Airport investments were estimated at $ 11.4 billion in Saudi Arabia, $8 billion in Bahrain, $6 billion in Oman, $5.5 billion in Qatar, around $six billion in Oman, $ 2 billion in Iraq, $1 billion in Egypt and $600 million in Jordan.

The report showed Arab nations have 202 airports, including 91 international airports and the rest for domestic flights.

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