Qatar dazzles as Middle East aviation picks up pace

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• Increasing at twice global rate
• Qatar fastest-growing market
• Region had 87m tourists in 2023

The Middle East’s aviation sector is growing at twice the global rate and is expected to offer 257 million passenger seats this year, according to a new report.

Not so long ago major airlines viewed the Middle East as a place to get cheap fuel on their way from Europe to South East Asia. Now it is one of the fastest-growing markets in the world. 

Available seat kilometres – a key industry metric for passenger capacity – is growing by more than 9 percent a year on average in the region. 

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The report by aviation consultancy OAG says the UAE and Saudi Arabia are the region’s biggest markets, accounting for 61 percent of total airline capacity, while Qatar is the fastest grower.  

Since 2000 Qatar’s aviation sector has expanded by 12.5 percent annually. It has grown from just over 3 million seats to more than 32 million seats expected this year.

In its latest financial results Qatar Airways reported net profit of over $1 billion for the first half of 2023-24, up 114 percent. Revenue rose 7 percent to $11 billion.

“The sustainability of such growth going further forward is an interesting aspect to consider given how the market is developing,” said the OAG report.

UN Tourism’s annual barometer says the Middle East had more than 87 million international tourists in 2023 – up 22 percent on the pre-pandemic figure for 2019.

The number of airlines operating in the Middle East increased to 213 last year, up from 135 in 2000. There are 36 locally based carriers in that total, a figure that has doubled in the past 20 years.

The latest report from the International Air Transport Association (IATA) says Middle East airlines reported demand for seats was up nearly 11 percent year on year in March. This was slightly below the global average of 14 percent.

Airline and capacity growth has also led to the number of routes increasing. There are now nearly twice as many airports served from the Middle East as there were in 2000, although the 2020 high water mark has not been reached in the years since the Covid pandemic. 

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OAG said competition between Middle Eastern and international airlines exists on nearly 400 routes, 20 percent of the total. This keeps fares competitive, it said, especially because the competition is often between legacy carriers and low-cost newcomers.

The 10 largest airlines in the Middle East have a combined order book of 795 aircraft to be delivered by the end of 2029. These planes are forecast to add 107 million seats to airlines’ capacity, OAG said.

However, OAG added that profitability has not always been possible in such a competitive market, especially among smaller airlines that struggle for market share.

Many of the region’s larger carriers posted “exceptional levels of profitability in 2023”, the report said, pointing to Emirates’ half-year profit of $2.7 billion. 

By contrast, Oman Air has struggled with profitability. Although the airline reduced its losses by 25 percent in 2023, it has yet to make a profit.

Saudia, the region’s largest airline by capacity, is hopeful of returning to profitability by the end of this year.

“Unfortunately for the smaller airlines in the region, some of whom are obligated to operate routes that perhaps fulfil more of a social rather than commercial requirement, profitability is more of a challenge,” the report said.

OAG added that any sudden and significant change in the market could have airline CEOs “ducking for cover”.

Willie Walsh, director general of IATA and former International Airlines Group boss, also highlighted the unpredictable nature of aviation in its latest report.

Airlines “are fed up of bearing the cost when delays and cancellations are the result of poor preparation in other parts of the value chain”, he said.