Middle East to increase defence spending

07 July 2010

The Middle East spent $90bn on defence in 2009

The Middle East is expected to spend up to $100bn on defence and aviation by 2014 as political tensions in the region rise.

The market will grow 11 per cent over five years. In 2009, the Middle East spent $90bn on defence, which was about six per cent of the global spend, says the Global Aerospace & Defense Review 2010 by US-based advisory firm AlixPartners.

Political tensions in the region, especially as a result of the fresh wave of US-imposed sanctions on Iran are expected to drive the growth in defence spending.

Globally, spending on defence will reduce due to budget deficits in the US and European governments.

Civilian aviation spending is also expected to grow. Airlines in the Middle East such as Dubai-based Emirates Airline and Qatar Airways will also continue to invest in new aircraft with Emirates leading the way.

Emirates purchased 32 Airbus A380 aircraft in June at a cost of $11.5bn. The carrier is expected to make further orders at the upcoming Farnborough Airshow in the UK.

The re-emergence of carriers such as RAK Airways will also strengthen the UAE and the region’s position as an aviation hub, says AlixPartners.

Rak Airways plans to relaunch its operations by the end of the year (MEED 30:6:10).

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