Tons Of Money Going Into Planes And Airports

Commercial aviation in the middle-east is booming, experts just aren’t sure the demand will be there to support it.

There are now four major airlines supporting the Gulf along with a few low-cost regionals, and they’re all investing heavily in more planes and airport improvements.

Industry analysts say flights to and from the region this year increased 15-percent from last year. That increase is higher than any other region in the world. Despite that,some industry observers have doubts.

Experts say an increase on a small number to begin with doesn't add up to much. They are questioning whether competition between the four majors in the region might prove destructive for all.

Emirates CEO Sheikh Ahmed al Maktoum told CNN, "When Emirates flies to any airport we are competing with all the airlines who operate there. So there will always be competition. I believe that all four airlines can survive." 

Less than a million people live in Qatar, and it’s building an airport capable of supporting 50 million passengers annually. In the United Arab Emirates, Dubai and Abu Dhabi are also pouring money into airport expansion projects, $9 billion at Dubai alone.

What’s confusing to analysts is the three airports are within 200 miles of each other, and all have hopes of becoming the region’s major hub.

Airport expansion in the area is in direct support of new aircraft purchases. Emirates ordered $30 billion dollars of new planes last year. Qatar Airlines bought ten new Airbus’s. Etihad now has a fleet of 52, three years after its first passenger flight.

Obviously, airlines and airports are confident in their growth estimates. After all, they’re backing that confidence with enormous amounts of money.

FMI: www.emirates.com