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ECONOMIC BENEFITS

Enhanced air traffic control can bring $16.3bn benefit to Mideast

DUBAI, September 8, 2015

The Middle East can achieve up to $16.3 billion in economic benefits over the next 10 years by delivering enhancements to air traffic control systems, according to a new report commissioned by Nats, the air traffic management specialists.

The independent report – “Economic Benefits of Improvements to Air Traffic Control” – was undertaken by Oxford Economics, the world leader in global forecasting and quantitative analysis for business and government.

With aircraft fleets across the Middle East forecast to grow at an annual rate of more than 10 per cent over the forthcoming decade, skies above the region are becoming increasingly congested. According to the Oxford Economics report, major economic benefits can be generated by avoiding a doubling in delays over the course of that period. The congestion also represents a significant threat to the two million jobs that depend on aviation and, more generally, to the $116 billion regional aviation economy.

Of the $16.3 billion surplus potentially available, 44 per cent (or $7.2 billion) would be realised by passengers and 56 per cent ($9.1 billion) to airlines (through faster travel times).

With the 2022 Fifa World Cup expeced to bring even more passenger growth to Qatar, the country  stands to benefit by upto $1.5 billion on enhanced air traffic control.

Qatar’s market share of GCC aviation capacity is predicted to increase by 17.1 percent by 2023, more than three times the predicted capacity growth of the GCC region’s share of global aviation.

The national carrier Qatar Airways, established in 1994, has grown exponentially - from four aircraft in 1997 to 152 today, serving 146 destinations and carrying over 22 million passengers. Furthermore, Qatar Airways has over 330 new aircraft pending delivery over the next few years.

Despite the huge growth in aviation, as governments invest in increasing trade and tourist flows, the region’s available airspace has not kept pace, according to the report. In addition to approximately half the airspace in the Middle East being reserved for military flights, the number of handovers that take place between different authorities in different divisions of airspace can lead to additional delays. Although the report notes that the challenges faced are clearly recognised throughout the region, it goes on to say that ‘the pace of progress often does not meet the pace of continued traffic growth’.

Using data from Nats and Eurocontrol, Oxford Economics calculated that the average flight in the region was delayed by 36 minutes and that 82 per cent of those delays were attributable to air traffic control capacity and staffing issues. By 2025, without further investment in air traffic control systems, a doubling of delay minutes to 59 minutes would cost the region $16.3 billion.  

John Swift, Direct, Nats Middle East, said: “This report highlights a clear economic case for much greater institutional, operational and technological investment in air traffic control systems across the region. It reveals that there are huge economic benefits available for airports, airlines and travellers, but also significant risks for governments in an increasingly competitive marketplace.

“As the Middle East diversifies its economy and focuses increasingly on international trade, ensuring that aviation is up to world class standards is vital. The region has made huge strides in investing in aircraft and infrastructure – it is critical, though, that the ‘invisible infrastructure’ of airspace is not forgotten. Increased collaboration between civil aviation authorities and the private sector will go a long way to closing that gap,” Swift said. – TradeArabia News Service




Tags: economy | Middle East | air traffic | benefit |

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