Dubai Airshow

Airbus Sees Vital Market in Mideast

 - November 7, 2015, 3:15 AM
Low-cost Middle East carriers like Air Arabia are growing the market for the Airbus A320 and other narrowbody airliners.

Having placed 700 aircraft since 1978 in a territory that includes the Middle East and North Africa, Airbus now counts a customer base of 40 airlines in 30 countries ranging from the east Atlantic coast to the Indian Ocean. It holds an order book consisting of more than 1,200 airplanes, and projects that air traffic in the region will grow at a rate of 6.7 percent per year over the next 20 years, compared with a global average of 4.6 percent.

With virtually half of Airbus’s A380 order book residing in the Middle East, and a strong position in the Gulf’s still fast-growing low-fare market, it should come as no surprise that the European airframer views the region as vital to its overall marketing efforts.

In fact, 13 years ago, low-fare carriers did not exist in the region; today, they serve 622 city pairs with 115 aircraft, according to Airbus Middle East managing director Fouad Attar. “This rate of growth is set to continue as there is still a significant amount of untapped potential within the region,” said Attar. “Of course the big airlines of the region will continue to benefit not only from their strong home market but from their extended networks in developing economies as well as developed ones. The strategic geographical location of the Middle East allows these big network carriers to capture significant traffic flows.”

Airbus statistics show that 2.5 million people live within 2,500 nautical miles of the UAE, or the range of an A320. Some 5 billion people live within 4,500 nautical miles, or the range of an A330, while an A380 or A350XWB can reach the world’s entire population of 7.3 billion from the Gulf country.

“This gives the UAE, and the Middle East as a whole, a uniquely strategic location on the world map,” said Attar. “Eighty-five percent of the world’s population lives within eight hours’ flying time from the UAE. More and more people within that range will increasingly use air travel in the next 20 years as the middle-class population grows in emerging markets such as the Indian subcontinent, Africa and Central Asia.”

While Airbus continues to control some two-thirds of the market for single-aisle jets in the region, it acknowledges that trends “strongly suggest” a transition toward larger airplanes. The shift in demand from the A320 to the A321 reflects those trends, added Attar. But while Airbus continues to make inroads into the markets occupied by its A350-900 and A330, Boeing still dominates the midsize and large twin-aisle market in the region. Still, Attar characterized Airbus as “well positioned” in the segment. “And, already with a proven success in the region, the number of A380s will only increase as the Middle East carriers continue to grow and infrastructure does not always support additional frequencies,” he insisted.

Despite its struggles with geopolitical unrest, the region has proved its resilience and ability to recover quickly from regional and global downturns affecting the air travel industry, if its performance during the global economic crisis in 2008-2009 serves as any guide. According to IATA, the region stood alone in its ability to record positive growth in the first quarter of 2009.

“The long-term strategy does not change; Airbus recognizes the importance of the Middle East region in global aviation,” said Attar. “In the short term, if our customers are experiencing difficulties due to difficult geopolitical circumstances, we strive to support them and to find solutions that work both for them and for us.”