Global aviation is of substantial economic importance. Supporting about 87.7 million jobs worldwide, the sector injects $3.5 trillion into the global gross domestic product (GDP). This further makes aviation one of the world’s largest economic sectors — and if it were considered a country, it would be the 17th largest in terms of GDP.
In recent years, governments in the Gulf Cooperation Council (GCC) region have been investing more in aviation to boost their economy.
Aviation and tourism
One of the many ways that aviation contributes to the economy is by offering air transport services to global travelers, whether these people are traveling for leisure, business, or both. According to the Air Transport Action Group (ATAG), 58 percent of all international travelers reach their destinations by air.
In the GCC, where governments have set ambitious goals for the tourism sector to reduce their dependence on oil, aviation is a crucial sector. A special report from Fitch Ratings highlights the significant investments GCC governments are making in their airport infrastructures to fuel tourism growth. The GDP contribution from the tourism sector in the GCC is expected to increase from around $130 billion in 2023 to above $340 billion by 2030, which will account for more than 10 percent of the region’s GDP.
Additionally, the GCC already has some of the world’s most modern airports, including Dubai International Airport in the UAE, Hamad International Airport in Doha, Qatar, and King Abdulaziz International Airport in Jeddah, Saudi Arabia.
Also, in 2023, GCC airports saw a remarkable recovery, with traffic 8 percent above 2019 levels and 20 percent above 2022 figures. This recovery outpaced many airports in the Europe, Middle East, and Africa (EMEA) region, where 2023 traffic was 97 percent of 2019 levels. The ambitious infrastructure plans in the GCC further aim to double air traffic by 2030.
UAE’s robust infrastructure
The GCC aviation market is characterized by its robust infrastructure and strategic location. Apart from being a gateway to the broader Middle East and North Africa (MENA) region, GCC countries are vital transit hubs connecting the East and West.
The UAE is at the forefront, with Dubai being a notable hub.
According to July 2024 data from OAG, Dubai International Airport (DXB) is the busiest airport globally, with 5.1 million seats. In the first quarter of the year, it welcomed 23 million passengers, marking an 8.4 percent year-on-year (YoY) rise.
Earlier in April, Dubai unveiled a $35 billion plan for what would be the world’s largest airport. The Al Maktoum International Airport megaproject entails massive expansions. It will have five parallel runways and four aircraft gates and be five times the size of DXB. As the project progresses, DXB operations will also be transferred to the said airport, with Emirates Airlines relocating by 2034.
All this is part of Dubai’s bigger scheme, which involves the creation of a whole new city south of Dubai.
“As we build an entire city around the airport in Dubai South, demand for housing for a million people will follow. It will host the world’s leading companies in the logistics and air transport sectors,” Sheikh Mohammed bin Rashid Al Maktoum, the UAE’s prime minister, remarked in a statement.
“We are building a new project for future generations, ensuring continuous and stable development for our children and their children in turn. Dubai will be the world’s airport, its port, its urban hub, and its new global center,” he added, underscoring the project’s long-term economic impact.
In the wider UAE, civil aviation contributes more than 13 percent to the country’s GDP.
Aviation milestones in Saudi Arabia
Proving that the GCC’s aviation sector fares well, Saudi Arabia also has major milestones under its belt.
For 2023, the aforementioned King Abdulaziz International Airport received the highest ratings on the Airports Council International. Meanwhile, Prince Mohammad bin Abdulaziz International Airport in Madinah was named the best regional airport in the Middle East at the Skytrax World Airport Awards. Additionally, the national carrier Saudia received accolades in the Skytrax global ranking, getting recognized as the most advanced airline in the world.
Furthermore, in the first half of 2024, the country recorded a 17 percent YoY increase in airport traffic, welcoming 62 million passengers. This is according to the General Authority of Civil Aviation (GACA).
Low-cost carriers registered a growth of 38 percent on international routes and 22 percent on domestic routes. Additionally, air cargo saw a significant rise of 41 percent annually, reaching 606,000 tonnes in the first half of the year.
Overall, Saudi Arabia’s air connectivity expanded to 163 destinations, marking a 23 percent increase compared to 2023.
King Fahd International Airport in Dammam is also recognized as the largest airport in the world by area. At 780 square kilometers, the airport is bigger than Saudi Arabia’s fellow GCC country, Bahrain. Further developments are expected in the airport as Saudi Arabia plans to expand the airport with a new six-runway facility by 2030. This could accommodate up to 185 million passengers per year.
Underscoring aviation’s importance, Saudi Arabia further unveiled its first “State of Aviation” report in May. According to GACA’s report, the sector contributed $53 billion to the economy and supported approximately 958,000 jobs nationwide.
Region continues to soar
Moreover, Qatar’s Hamad International Airport is a major player in the region’s aviation sector as well. Skytrax named it the best airport in the world, a title it previously earned in 2021 and 2022. In 2023, the airport celebrated a milestone year, having welcomed 45 million passengers.
Meanwhile, Qatar Airways reported a 45 percent rise in revenue in FY22/23, reaching $21 billion. Indirectly, the country’s flag carrier contributes almost 11 percent to Qatar’s GDP.
Elsewhere in the region, major airport expansion projects are also underway. After unveiling a $1.8 billion airport in Muscat in 2018, Oman plans to have six new airports by 2028-29. The country further expects airport passenger numbers to grow from 17 million to 50 million by 2040.
In Kuwait, Kuwait International Airport is expanding with a new terminal, which could cater to 25 million passengers annually initially. In Bahrain, national carrier Gulf Air’s plan to build a state-of-the-art Maintenance, Repair, and Overhaul (MRO) facility at Bahrain International Airport (BIA) is poised to boost the country’s aviation industry.
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