The International Air Transport Association (Iata) may be forecasting the region’s airlines to lose $400m in 2010, but Riyadh is still pushing ahead with ambitious plans to develop and upgrade its aviation sector.
The principal reason that the kingdom is comfortable in pressing ahead this level of investment is the consistency in the volume of religious tourists that visit each year.
With about 2.5 million pilgrims travelling every year to the main religious cities of Mecca and Medina on Hajj and Umrah pilgrimage, Saudi Arabia’s General Authority for Civil Aviation (Gaca) can be confident that it can fill its expanded airports with passengers. To accommodate the future increase in passengers, Gaca has more than $10bn of airport projects under way as it expands its international airports and upgrades its smaller ones.
Gaca has now received construction bids for its $7bn Jeddah airport expansion project that will boost its capacity to 80 million passengers a year by 2035.
Gaca also has a blueprint to develop 34 domestic airports and it is currently in the prequalification stage of its first private-public partnership airport project at Medina.
To support the volume of airport development under way, the kingdom’s airlines must also ensure that they too expand so that they bring in a greater volume of visitors into Saudi Arabia’s airports.
Also in a region with about $500bn worth of projects on hold, a government-driven investment plan with a clear idea of when and how the projects will be funded and completed is refreshing.
With projects already under development, Riyadh is certainly making a statement to its regional competitors. And they should be worried. If the kingdom can deliver its plans, it will become the heart of the Gulf aviation sector.