By Issac John www.khaleejtimes.com
DUBAI – The projected annual growth rate for the Middle East air cargo traffic over the next 20 years is 4.0 per cent, Boeing said.
The forecast said the region is starting to diversify beyond the oil industry to industrial and business development. “An example is Dubai, where a long-term effort has produced an economy strong in logistics, tourism, banking, and construction. This expansion will lead to growing air cargo flows,” said Boeing World Air Cargo Forecast, or WACF, the airline manufacturer’s biennial assessment of the air cargo industry.
“The Middle East serves as a crossroad for Africa, Asia, and Europe, with Dubai handling approximately 70 per cent of the air cargo traffic for the region,” said the study.
The four largest economies in the region commanded 70 per cent of the region’s GDP in 2009. Not only have the oil exporters of the region benefited from the oil boom, but nearly all the other countries have as well, the forecast said.
“There also has been movement toward economic liberalisation and cooperation between countries. These changes should improve the region’s investment climate and economic competitiveness. New highways and trade agreements will facilitate increased intraregional cargo flows,” it said.
Air cargo traffic growth between the Middle East and Europe has been strong since 1999, with the 7.8 per cent annual growth of the smaller westbound market outpacing that of the eastbound market at 5.6 per cent. New infrastructure will reinforce the region’s role as a hub. Dubai’s new Al Maktoum International Airport is planned to be the world’s largest cargo hub and received its first cargo flight in the summer of 2010.
Trade with Europe accounted for 1,076,000 tonnes of air cargo in 2009 and represented 41 per cent of the Middle East’s international air cargo market.
Total 2009 air cargo was down in this market 14.9 per cent from its 2008 peak, as a result of the global economic downturn. Bidirectional air cargo growth in these markets has averaged an impressive 6.5 per cent annually between 1999 and 2009.
The large volume of air cargo that flows through the Middle East, rather than originating or terminating there, reflects the region’s importance as a cargo hub.
The region also has a significant sea-air market, in which goods from South Asia arrive in the Middle East on ships and continue to Europe by air.
In 2009, air cargo between the Middle East and Asia represented 32 per cent of the total Middle East traffic at 839,000 tonnes, the forecast said.
The most significant products exported to Asia are personal effects, machinery, chemicals, flowers, and perishable foods. Imports from Asia include apparel, luxury goods, electronics, finished goods, and perishables.
In 2009, 839,000 tonnes of air cargo was shipped between Asia-Pacific and the Middle East. North America accounted for approximately 10 per cent of the air cargo market in the Middle East at 285,500 tonnes.
Growth in the North America-to-Middle East market has been robust, with an annual growth rate of 8.3 per cent, but this flow is still small compared to others in the Middle East region. Overall air cargo between the Middle East and Europe is forecast to grow at an average annual rate of 6.0 per cent from 2009 to 2029, the analysis said. Traffic from Europe to the Middle East grew at an annual rate of 5.6 per cent between 1999 and 2009.
The annual rate for the next 20 years is expected to be 5.3 per cent. The price of oil will have a significant effect on Middle East demand for products from Europe, as will the ability of the region’s economies to diversify and become more competitive, the study said.