The three-day Future Aviation Forum closed on the evening of the 11th local time in Riyadh, the capital of Saudi Arabia. This is one of the largest aviation industry forums in the Gulf and even the Middle East this year, and it is also the first time that Saudi Arabia, an energy powerhouse, has hosted a similar forum. Saudi Transport Minister Saleh Al-Jahir unveiled an ambitious development plan at the opening ceremony of the forum, which will open a new national airline in the next decade while realizing a $100 billion investment in the aviation industry and establish Saudi Arabia as one of the gulf, the Middle East and even the global aviation hub.
Saudi Transport Minister Saleh Al-Jahir spoke at the opening ceremony of the Future Aviation Forum
Ambitious goals naturally attract the attention of the global media, but some questions have to ask, the goal is so big, where does the confidence come from, and why is it now?
It is undeniable that from the perspective of geographical location, Saudi Arabia is located at the junction of three continents in Asia, Africa and Europe, and is on the main transportation route between the world's major emerging market countries, with unique conditions. On the domestic side, the Saudi Minister of Transport made it clearer in an interview with reporters a few days ago that the huge market of 35 million people is the biggest advantage for domestic aviation companies to compete with their Gulf counterparts.
Not only that, Saudi Arabia has more than 2 million square kilometers of land, but at present, domestic railways are mainly used for bulk cargo transportation, and ordinary passenger services have just started. The most densely populated cities, such as Riyadh, Jeddah and Dammam, are relatively scattered, with distances ranging from hundreds to thousands of kilometers, making airplanes the most time-saving and convenient travel option for local people. Statistics show that the Saudi Civil Aviation Administration currently operates a total of 29 airports, including 4 international airports, 12 domestic airports, and a number of regional airports and some special and military airports, Jeddah and Riyadh airports account for about 75% of the country's total flight traffic.
△ King Fahd International Airport in eastern Saudi Arabia is one of the largest airports in the world
The strong support of the Saudi government in recent years is another important guarantee for the development of the country's aviation industry. In 2016, the Saudi Crown Prince released vision 2030, an economic and social reform plan, that sees the development of the transportation and logistics sectors, including aviation, as one of the important ways to diversify the economy, with the goal of making Saudi Arabia one of the top five countries in the world in terms of air transit traffic. To this end, the Saudi government has stepped up infrastructure construction in recent years, the first phase of the expansion of Jeddah Abd al-Aziz International Airport has been completed, and the passenger traffic is expected to exceed 43 million by 2025, and 7 new airports and 16 terminal projects in cities such as Riyadh are also under construction and planning.
△ The "Vision 2030" released by the Saudi Crown Prince has attracted enterprises from all over the world to participate in the construction of super-large-scale projects in Saudi Arabia
Riding on the high oil prices since the second half of 2021, the Saudi aviation industry, which has been constantly bulging up in the "money bag", is constantly expanding. Saudi Arabia's national airline, Saudi Airlines, has rapidly grown to more than 150 aircraft in its fleet, making it one of the youngest in the world. Another low-cost carrier, Flynas, is also negotiating with two of Boeing and Airbus aircraft manufacturing giants to buy aircraft worth $13 billion to $15 billion to make itself the largest low-cost carrier in the Mena and North Africa region as soon as possible.
Saudi Arabia is planning to set up a second national airline outside of Saudia
If things are always so optimistic, there is no need to worry, but in the eyes of many professionals, this is not the case. The aviation industry has been criticized for its high carbon emissions in recent years, and the hydrogen-fueled aircraft proposed by Saudi Arabia are extremely difficult to achieve in a short period of time. In the context of the new crown epidemic, almost all airlines are facing losses of varying degrees.
According to the International Air Transport Association, global air trips in 2020 will be 60.2% lower than in 2019, with the Largest decline in passenger traffic in the Middle East, where Saudi Arabia is located. Although the overall epidemic has improved after entering 2022, the change in business travel habits will prompt a considerable number of travelers to reduce their future air travel budgets, and the profit structure of the aviation industry may also undergo profound changes. Once the international oil price declines, whether Saudi Arabia can maintain high investment will directly determine the expansion rate of its aviation industry.
△ Many business people will continue to choose online meetings instead of face-to-face communication after long journeys, even after the epidemic
Bucking the trend can be interpreted as seeking opportunities in a crisis, but as a latecomer in the market, Saudi Arabia and neighboring countries also have an unspeakable advantage in the competition of the aviation industry. In the field of international civil aviation, Emirates, Etihad Airways and Qatar Airways are known in the industry as the "Three Heroes of the Middle East", while Dubai, Abu Dhabi and Qatar's Doha in the UNITED Have also invested tens of billions of dollars in infrastructure such as airports. After a long period of development, the total passenger throughput of the above three airports in 2019 before the epidemic is just close to 150 million passengers, coupled with the increasing saturation of the regional aviation market in the Middle East, it is not difficult for Saudi Arabia to achieve an annual throughput of 330 million passengers in a decade.
△ Dubai International Airport has been recognized as one of the busiest airports in the world for many years
Just a few days before the opening of the Future Aviation Forum, the newly expanded Abdul Aziz International Airport in Jeddah, Saudi Arabia, suffered an "epic" chaos. Due to massive flight delays and improper baggage handling during the Eid al-Fitr holiday, thousands of travelers remain at the airport for hours. While the incident directly led to the dismissal of the airport CEO, it also exposed the gap between the management capacity of saudi airports and neighboring countries. One social media user wrote in the article that perhaps on the path of aviation development, "capital is the least lacking in Saudi Arabia, a country in transition."