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aviationMay 11, 2022

Arab airlines organization’s head says region needs $1tn of investment to grow


RIYADH: Following an 80-90 percent downturn in business during the COVID-19 pandemic, the Arab aviation industry is back to growth but needs around $1 trillion for that to happen.

Talking to Arab News, the secretary-general of the Arab Air Carriers Organization called on all member states to ensure adequate investment over the next decade to ensure the sector’s sustainable growth.

The aviation industry is enjoying a rapid surge in passenger traffic and looks forward to achieving pre-pandemic levels by early- to mid-2023, said Abdulwahhad Teffaha of AACO.

AACO is a nonprofit organization with 33 constituent airline members from 19 countries in the MENA region.

“If we look at the strategic plans for the airlines of the region, we are talking about a trillion dollars of investments in airports, equipment, and so on — which means $100 billion every year to be invested in this sector, not only to sustain it, but also to bring it to the state of the art in the aviation industry.

“The biggest challenge now for the aviation sector is sustainability in terms of climate change. If Gulf countries want to meet their climate change targets, for aviation and for other stakeholders, they need to put in place investments for better technology, which can be based on fossil fuel or on sustainable aviation fuel.

“You have to invest in infrastructure. I’m not talking only airports, I'm talking about aerospace as well in order to allow this industry to grow, and at the same time to be sustainable in terms of its effects on the environment.”

Having said that, Teffaha credits the collective AACO fleet for being “the youngest in the world, with an average aircraft age of 7.4 years old — compared to other regions where the average is 10-15 years.”

“So, in terms of our fleet and our airports, we are at the state of the art level — but you need to maintain that level.”

We are now back to about 60-plus percent of pre-COVID levels.

Teffaha admits that achieving $1 trillion investment could possibly be an overambitious target.

“But even if we reach 50 percent-60 percent of that optimal situation, we will be top of breed of aviation stakeholders.”

Maintaining his bullishness on the outlook for AACO, Teffaha maintains that “we are now back to about 60-plus percent of pre-COVID levels.”

He attributes this upturn in traffic to two specific factors: Enthusiasm for travel by the global population, and measures taken to counter COVID-19 on the part of regional governments.

“The eagerness of people to travel is a way of life now. It's no longer a luxury,” Teffaha said.

“Secondly, governments are learning lessons from what they did during the COVID pandemic and applying measures that are actually risk-based rather than just based on estimation.

“COVID is almost over. I believe we have almost reached a level of herd immunity. But it’s good to adopt measures to counter risk for future global events, not necessarily pandemics, maybe other events that require harmony.”

Teffaha also commended Saudi Arabia for proposing a new global framework to ease and harmonize air travel requirements in the post-COVID-19 scenario.

'It's an excellent initiative and kudos to Saudi Arabia for bringing this to the International Civil Aviation Organization,' he said.

arabnews