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Aviation in the Gulf: the dramatic turnaround

In the space of just 30 years, the aviation industry in the Arabian Gulf has been transformed dramatically.

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In the space of just 30 years, the aviation industry in the Arabian Gulf has transformed dramatically.

Flashback to the 1970s - the region was basking on its newfound oil riches and enjoying worldwide attention from business magnates. Trade was fully concentrated on supplying oil to other countries on a global scale.

As the oil-boom continued, airline giants, particularly from Europe, set up facilities within the region, with the promise of growing alongside the economy. This helped to stabilise one of the greatest freight transit imbalance in logistics terminology, a staggering 90% of inward freight against just 10% transit traffic.

This is where the irony begins. Apart from the fact that local forwarders had to bear the pocket-searing airfreight rates, those big airlines did not prove their longevity and moved facilities from one booming country to another, which at that time included Asia and the Americas. Except for Saudi Arabia Airlines, Kuwait Airways, and Bahrain's Gulf Air, there were no other popular home-grown airline carriers that sincerely empathised with the Arabian market to penetrate into the global trade scene.

Now, 30 years later, the non-oil sector of these oil-rich countries has surfaced. The whole world once again has its eyes on the Gulf countries; amazed at the phenomenal economic boom the region is experiencing with its infrastructure, tourism, real estate, and most importantly, transport hub facilities.

The free zones that proliferated the region, particularly in the UAE, opened doors to businesses once considered unimaginable. Seeing the tremendous market potential and taking advantage of trade-friendly regulations and an open skies policy, businesses flocked to the young Arab nation, with the aviation industry players leading the pack of those setting up offices and facilities.

The economic boom allowed the region's aviation front to flourish. Local businessmen and forwarders no longer have to fight for cargo space in airlines going to world-renowned airports in Europe, Asia or the United States.

Now, owing largely to business turnaround plans and strategic geographic position, the Middle East has become one of the fastest-growing global airline hubs in the world. Some of the biggest air cargo and passenger carriers are based in the Middle East, and almost all renowned airlines land at airports in the Middle East on a regular basis.

Abu Dhabi-based Eithad Airways has flights to 30 destinations worldwide. Within the region, Doha-based Qatar Airways emerged to become one of the best airlines in the skies today flying a modern fleet of aircraft to 75 destinations worldwide. Dubai-based Emirates Airlines currently flies to over 90 destinations in more than 50 countries around the world, including those hard-to-reach areas that local businesses before could only dream to reach.

Now, nearly 800 Emirates Airlines flights depart from Dubai each week on their way to destinations on five continents. In fact, Emirates' flights account for nearly 40% of all flight movements in and out of Dubai International Airport, and aims to increase its market-share to 70% by 2010.

With all the aircraft acquisition, additional destination points and promising statistics, it is clear that the aviation industry players from this part of the world mean serious business. Unlike the foreign operators of the 1970s, they are here to stay, developing a foundation in a region, which promises to become the world's centre of aviation.

In freight terms, if one has to put a finger on the miracle in the account of Gulf aviation, it would be that the imbalance that existed in the 1970s is history.

Today, a very balanced freight movement has been developed in the Gulf, where oftentimes, there is more cargo leaving the region than actually coming in. This all indicates a very successful transportation hub and gateway business.

Issa Baluch is chairman and CEO of Swift Freight International and past president of FIATA. He is the author of Transport Logistics, Past, Present and Predictions (www.transportlogistics.com)

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