In the Middle of it all: An aerial view of Middle Eastern airports
2 September 2022
For International Airport Review’s Middle Eastern spotlight issue, Stefano Baronci, Director General of Airports Council International (ACI) Asia-Pacific, gives an overview of the airports in this region.
Favourably positioned at the strategic crossroads of major economies — Asia, Africa, and Europe — airports of the Middle East have transformed into major international hubs, supporting the fast‑growing aviation industry in the region.
Through facilitating long-haul flights and serving as a link between continents, and connecting countries of the Arabian Peninsula, as well as some neighbours, the Middle East aviation industry has been at the forefront of the region’s growth story.
With over 110 airports, the Middle East is already one of the globe’s main transport capitals and is one among the fastest growing in the world, accounting for four per cent (170 million) of the global traffic (4.6 billion) in 2021. Due to its strategic location, Middle East carriers can connect to any continent in the world — from the well-established international hubs of Doha, Dubai, Abu Dhabi, aircraft can reach almost all of Asia, Africa, Europe within a flying range of eight hours.
Traditionally, London, Paris, Amsterdam, and Frankfurt once dominated as transit points for passengers travelling between European and Asian countries. With the emergence of Middle Eastern airports, in the last two decades, these cities became popular transit hubs for travellers. This gives passengers the ability to relax, stretch and get some refreshments before continuing their journey to their final destination. As a hotspot for connecting flights, Middle Eastern airports have witnessed consistent growth in passenger traffic and air cargo over the last two decades.
So, what led to this transformation? It’s the superior connectivity to key destinations across the world, reduced travel time and lower airfares coupled with high quality of service and superior in-terminal commercial offerings making the Middle East the new crossroads of global travel. The transformation is also driven by both the airports and airlines, all backed by respective governments, that believe aviation is the key driver to make their countries bigger players in the global economy. Constructive relationships and pragmatic co-operation between the key aviation stakeholders, including airport operators, airlines, ground handling companies and other important concessionaires resulted in a robust and resilient growth of the entire aviation ecosystem in the region.
Powering the global economy
Airports and the aviation sector serve as economic engines. In 2019, the aviation sector generated $3.5 trillion in economic activity, representing 4.5 per cent of global GDP. During pre-COVID, the industry in the Middle East generated $213 billion in revenues, accounting for six per cent global economic activity. The sector generated over three million jobs until 2019.
Heavily dependent on international traffic, the growth of the region witnessed a significant slowdown since the onset of the COVID-19 pandemic. The Middle East airports, which served 405 million passengers in 2019, remained the most impacted region in 2021, despite some improvement in the second half of year, reaching only 42 per cent of its 2019 level by year end. This was mainly due to its dominant dependence on international traffic that was heavily impacted by the border restrictions imposed by many States worldwide. In 2022, the region is expected to reach 67 per cent of 2019 levels by year end and fully recover only in late 2024.
Nevertheless, there has been a considerable improvement in traffic in the first four months of 2022 (from January to April) with the region recording 66 per cent traffic as compared to the same period in 2019. Cargo throughput too remains positive in the first four months of the 2022, achieving 86 per cent as compared to same period in 2019.
ACI forecasts indicate that close to 19.7 billion passengers are expected to traverse the world’s airports by 2040—more than double of the nine billion passengers travelled in 2019. Middle East airports are expected to handle 1.1 billion passengers by 2040 – a significant increase of nearly 300 per cent of the combined traffic they handled in 2019 (405 million).
CAPEX investments are key
The growth in passenger demand will put increased pressure on capacity to accommodate and facilitate seamless travel experiences as well as align to environmentally sustainable targets, particularly decarbonisation goals.
These rising traffic volumes will need to be timely accommodated at airports with long-term investment projects, which will include both expanding existing airports and developing new airports – what the industry is referring to as brownfield and greenfield projects, respectively.
According to ACI forecast, the world’s airports are expected to invest nearly $2.4 trillion to develop their infrastructure, including the use of advanced technologies and expansions by the year 2040. Of this amount, 30 per cent of the CAPEX needs are for new greenfield airport construction, representing US$731 billion between 2021 and 2040.
The Middle East projected CAPEX needs amount to about US$151 billion between 2021 and 2040. Near-term (2021–2025) greenfield airport projects are expected to comprise 56 per cent ($17 billion) of total near-term regional airport CAPEX, though that share will gradually decrease over the long-run (2026 to 2040), as the region meets long-run air passenger capacity needs.
Middle East countries are investing billions of dollars into new-build airports to create iconic transport hubs, bringing to life the ambition of becoming a local gateway for global travel.
Failure to address capacity needs to realise projected 2040 passenger demand will have real socio-economic consequences. Based on the relationship between passenger travel and socio-economic outcomes, for every 1,000,000 foregone passengers due to airport capacity constraints in 2040, it is estimated that the Middle East would lose about 9,600 jobs and $645 million in GDP.
The pathway to achieving regional and global economic recovery and long-run growth, social benefits, and environmental sustainability involves airport capital investment. Addressing current financial difficulties and financing future large-scale airport infrastructure – especially green financing – will require public, private, and/or institutional investors, and potentially associated regulatory support.
Following the COVID-19 crisis, investments in infrastructure will be needed more than ever to accelerate the recovery and stimulate job creation. Governments have a key role to play to support this recovery and to mitigate the risks of falling short on certain United Nations Sustainability Development Goals (UN SDGs) linked to airports and aviation.
The COVID-19 pandemic may have slowed down the industry in the region, but with stimulated demand and market growth, a conceivable potential is seen in the region as a gateway to the global aviation industry. The future, however, looks bright for the Middle East aviation industry as the region is not only an increasingly attractive destination for business and leisure travellers, but also because of its location as the gateway between east and west.
Emphasis on sustainability
As much as they focus on infrastructure expansion, Middle Eastern airports are equally focusing on sustainability through international green buildings schemes to ensure a greener future. Some have committed to becoming carbon neutral and are leading the decarbonisation of the region by improving energy efficiency and switching to renewable energy.
Notably, Queen Alia International Airport in Jordan has become the first airport in the Middle East, the second in the Asia‑Pacific region and among 21 airports worldwide to achieve Level 4+ ‘Transition’ – the highest level of the Airport Carbon Accreditation (ACA), the only institutionally endorsed, global carbon management certification programme for airports. In addition, there are two airports – Queen Alia International Airport and Bahrain Airport – recognised under ACI Asia-Pacific Green Airports Recognition programme in 2022 – Carbon Management. This demonstrates the regions commitment towards airport decarbonisation.
Special focus for ACI Asia-Pacific
To serve this vast region, ACI Asia-Pacific aims to provide special attention to strengthen advocacy efforts and work towards excellence of standards. To achieve this, ACI Asia‑Pacific is in the process of establishing a sub-regional office in the Middle East. With this, ACI Asia-Pacific would be able to customise its programmes to serve its members in the region efficiently. This will also provide an opportunity to create awareness around ACI Asia-Pacific and its activities, improve advocacy and representation at key local aviation events.
Strengthening co-operation in aviation security
ACI Asia-Pacific has been advocating for closer co-operation, in particular the harmonisation of security measures and sharing of security information among States in the Middle East. Enhancing airport security in Middle East airports has been the top priority for ACI Asia-Pacific.
The association offers a range of security programmes and initiatives, including trainings, smart security programme and APEX in security review, to help airports improve security standards and counter emerging security threats that could jeopardise civil aviation.
Striving for excellence in safety at Middle Eastern airports has been one of top priorities for ACI Asia-Pacific. To bring awareness, ACI Asia-Pacific continues to promote our initiatives on safety through Airport Excellence (APEX). The association will continue to promote APEX as a tool to help airports obtain aerodrome certification. Additionally, ACI will promote Global Reporting Format for Runway Surface Conditions (GRF) to promote its implementation with ICAO MID and other associations in the region.
Overall, the growth of the Middle East’s aviation industry has been impressive. Despite the COVID-induced slowdown, the aviation industry in the region is expected to grow further in the coming years. This will mandate facility enhancement and airport infrastructure development.
Stefano Baronci is the Director General of Airports Council International (ACI) Asia-Pacific, an association representing the interests of airports in Asia Pacific and the Middle East. Appointed in December 2019, he is responsible for driving and executing the strategic plan of the association and overseeing a team of professionals at the regional office based in Hong Kong. Baronci has 22 years of analytic and representational experience at national and international levels in the aviation sector, representing both airport and airline industries. He is very familiar with the ACI community, having previously served as the Director of Economics at ACI World in Montreal and Senior Policy Manager at ACI Europe in Brussels. He has also served as Secretary General of Assaeroporti, the Italian airport operators’ association, and Assistant Director and ATM Infrastructure Expert at the International Air Transport Association (IATA). Baronci, a native of Italy, holds an Executive MBA from Warwick University in the UK and graduated with a law degree from La Sapienza University in Rome, Italy.