Lack of GCC rail network boon for aviation
The lack of railway network in the GCC, a vibrant young population, liberalization of aviation sector and rising disposable income has contributed to the robust growth in air traffic leading to the development of airports, expansion of fleet capacity and entrance of new operators in the region, a recent industry research note by Kuwait-based ratings agency Capital Standards has said.
The Middle East is emerging as a major aviation force driven by the region’s strong economic growth, ambitious expansion plans and favorable demographics.
The majority population in the Middle East, particularly in the Gulf, is non-nationals, which form a sizable traveling population, primarily to their countries of origin, the research says.
This is further supported by a rising younger population with high disposable income.
Despite the financial crisis negatively affecting the economies of the GCC, the aviation sector has maintained a healthy growth, according to Capital Standards analyst Jyoti Prakash Singh.
The region’s aviation sector has also been greatly helped by the global market liberalization, which were previously limited by restrictive controls.
The major airlines in the region benefits from geographical location, young aircraft fleet, and low operating cost.
Most of the airlines focus on high quality and timeliness at reasonable prices.
The outlook for aviation sector in the GCC is likely to remain strong driven by continued demand for travel, developing infrastructure and the objective to develop as an international travel hub.
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