GCC Aviation Report

Aviation in the GCC States

Industry Trends & Growth ScenarioIndustry Performance 2011

Airports & Airlines - Expansion & Growth Projections

UAE - The New Global Aviation Hub

Flying High Amidst Global Turbulence

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 manufacturers-

in 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 world’s 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



Middle East Economic Outlook –IMF study

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

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 IMF’s 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 region’s oil-exporting countries (excluding Libya)—Algeria, Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi

Arabia, Sudan, the United Arab Emirates, and Yemen—are 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 region’s oil importers—Afghanistan, Djibouti, Egypt, Jordan, Lebanon, Mauritania, Morocco,

Pakistan, Syria, and Tunisia—will register just under 2 percent in 2011.

Economic activity in the region’s 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 countries—Saudi Arabia in particular—have 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 region’s 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 region’s 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 Union—where growth is forecast to slow from 1.7 percent this year to 1.4 percent in 2012—the 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 notes—particularly 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

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’s 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.

GCC Economic Outlook 2012

Saudi Arabia



United Arab Emirates

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 Eurozone’s 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 year’s fiscal impulse has been neutralized by import spending, while imports themselves have been made

cheaper by a recovering dollar and declining commodity prices.

Large increases in oil, NGL and gas production will ensure a strong contribution from the UAE’s hydrocarbons

sector in 2011. This will be bolstered by a healthy revival in Dubai’s 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

Dhabi’s 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 Dhabi’s large oil revenues will continue to dominate the UAE’s 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

GRE’s 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.



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 government’s 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 country’s 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. Qatar’s 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 Qatar’s 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.

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, Kuwait’s 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.

Qatar

Kuwait



Oman

Bahrain

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’s 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 Bahrain’s 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.

Bahrain’s 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

The world’s 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 ACI’s 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.

ACI Report on Airports performance across the world in 2011



Aviation Industry – Perspectives of ICAO and IATA

IATA - 2011 performance and 2012 projections

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 2010’s 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.

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, IATA’s 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 region’s 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. Japan’s 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 China’s 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 Brazil’s domestic market.

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).

2012 - Central Forecast



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.

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 Airbus’s 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).

Airbus

Middle East market Forecasts

BoeingBoeing 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 industry’s 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.



With today’s 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 region’s fleet from more than 800 aircraft today, to some 2,260 by 2030.

According to the Airbus forecast, the region’s 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 world’s 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 Dubai’s 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 region’s 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 world’s fastest growing airlines

as they vie to expand their long-haul routes and increase capacity.



Emirates is now the largest single operator of Boeing’s 777 long-haul airliner with some 95 units in service. Its

order was the largest single dollar-value order in Boeing’s 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 Boeing’s 787 Dreamliner.

Embraer

Brazil’s Embraer, the world’s 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 company’s 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 Global’s 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.



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 year’s 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 today’s 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 Association’s (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.

Bombardier



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 world’s 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 region’s 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 Research’s ‘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 East’s 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.

Aviation Industry in Middle East and GCC



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.

Dubai’s 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.

GCC airlines’ fleet and order statusHere 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.

Aviation in the GCC States



BOEING: Emirates has 47 planes on order with Boeing, including 42 Boeing 777s.

Etihad Airways: Abu Dhabi’s 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 kingdom’s 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 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 doesn’t 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

country’s’ 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 sector’s 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 country’s 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.

UAE - An overview



Today Dubai’s 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 country’s

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.

Dubai’s 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 emirate’s GDP - a fact that has led to its inclusion in Dubai’s 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. Dubai’s 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 world’s biggest airport when fully operational.

Emirates has become the world’s 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 world’s 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.



Abu Dhabi International Airport, 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 capital’s 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 airport’s 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 Airport’s 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.

Dubai Airports released Dubai International’s (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.

Airport Developments in the UAE



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



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.

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.

Aviation Safety and Security

UAE passenger traffic to hit 82.3 million



In a report in November 2011, Gulf News reported this:

The UAE’s 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 Dubai’s 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 Dubai’s total employment and 32 per cent of the emirate’s 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 airport’s projected passenger capacity by 2020• 22% is Aviation’s share of Dubai’s employment sector by 2020• 32% is Aviation’s contribution to Dubai’s GDP by 2020• 4 million tonnes of air freight is expected to pass through Dubai airports by 2020

Investments and Expansions



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 UAE’s 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.

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 Dubai’s

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.

Issues and Priorities



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 Bahrain’s 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.

GCC Airports An update on expansions and investments



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 France’s 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.

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 Sultanate’s 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 government’s expenditure will increase by 10 per cent over the current year’s total. The Sultanate’s

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.

Oman’s 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.

Sultanate of Oman



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 Turkey’s 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 UK’s 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 Airport’s 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-per-

year 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 Town’s 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. Bechtel-

ENKA-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.

Oman’s 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 airport’s 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 Airport’s 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 airport’s annual capacity to 24, 36 and 48 million passengers when the demand is required.



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 Qatar’s 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 high-

tech 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

Qatar’s 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 airport’s 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



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 world’s

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 column-

free design of the hangar’s 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 façade of the terminal beneath the roof will emphasize the roof’s 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 terminal’s 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 check-

in 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 (9,100m² and also a 1,700m² parking

area).

This is a terminal for the exclusive use of the royal family and VIPs on state visits, which will feature a multi-

layered 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 (2,000m² 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 416,000m². 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 416,000m² 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 airport’s 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 airport’s 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 Gulf’s 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 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 airport’s 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 façade

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.

Kuwait



Foster + Partners said the scale of the airport shows Kuwait’s 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 Kuwait’s 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 airport’s enlargement which will cover an area of 504,257 square metres is one of five pioneering projects

within the development plan with the terminal’s 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 project’s 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 government’s 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 government’s development plan, which has

been approved by the National Assembly, parliament, in addition to other big development projects which

will be carried out at Kuwait’s International Airport including the expansion and lengthening of two runways.

Construction work on Kuwait’s 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 façade spanning 1.2 km.

There are also plans to build a metro linking the airport to the city centre.

Kuwait’s 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 hub’s 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 Kuwait’s 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 Kuwait’s 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 country’s more than 300 days of sunshine a year. The airport’s 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.



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 world’s largest aircraft, including A380s and increase the airport’s

annual capacity to 80 million passengers a year by 2035.

Airport People Mover: Canada’s 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.

Kingdom of Saudi Arabia



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

project’s first phase is aimed at increasing the airport’s 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 Al-

Jouf.



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 Arabia’s 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 airport’s 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.

Airports Upgrading



GACA intends to increase the airport’s 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 Arabia’s 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.

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.

The UAE

Source: Centre for Asia Pacific Aviation and UAE GCAA

Air Traffic Movements in GCC

2000

1950

1900

1850

1800

1750

1700

1 2 3 4

Total % change

5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk

12.0%

10.0%

8.0%

6.0%

4.0%

2.0%

0.0%

Centre forAsia Pacific Aviation



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.

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.

Oman



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 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.

Bahrain

Saudi Arabia

60

1997

millions

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

50

40

30

20

10

0

Total % Growth

12%

10%

8%

6%

4%

2%

0%

Centre forAsia Pacific AviationAsia Pacific Aviation

However, the size of the domestic traffic market has stayed essentially static over the past four years, even

with the end of Saudi Arabian’s 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.

Source: Centre for Asia Pacific Aviation & Saudi General Authority for Civil Aviation

Saudi Arabia passenger traffic and growth: 1997 to 2010



25

20

15

10

5

0

2006 2007 2008 2009 2010

Millions

Domestic Arirports International Arirports Domestic total

Centre forAsia Pacific Aviation

Saudi Arabia domestic passenger traffic: Domestic and international airports

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

Documents

GCC Aviation Report