Special Report: Transport & Logistics - Transport sector needs an uplift in trade

07 August 2009

The Gulf enjoyed a six-month delay before the international banking crisis, which began in late 2007, finally hit the region. A similar scenario now seems to be developing in the transport sector.

Airlines around the world began reporting a drop in passenger numbers in September 2008, even as Middle East carriers continued to grow. But there are signs that the region’s airlines might not be able to defy the global downturn much longer.

Airline passenger numbers are still rising, but capacity is rising faster, leading to more empty seats on planes. Air cargo traffic is already falling, despite capacity also rising in that area of the industry.

Shipping companies are also reporting lower container traffic volumes on key routes. And Kuwait’s Agility Logistics, the largest company of its kind in the region, reported a fall in revenues and profits earlier this year.

The Middle East relies on global trade, both in terms of finding a market for its oil and gas, and in its role as a trans-shipment point between Asia, Europe and Africa.

The continuing recession in global markets means trade levels will continue to be depressed, and the region’s transport firms cannot avoid the fallout forever.

But at least they still have one advantage over their global rivals: they have had far longer to prepare for it.

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