Saudi Arabia reported a sharp rise in air passenger traffic in the first half of the year to exceed pre-pandemic levels as the kingdom continues to focus on diversifying its economy away from oil.
The kingdom reported a 17 per cent annual increase to a record 62 million passengers as the number of flights increased 12 per cent to 446,000, "well above pre-pandemic levels", the General Authority of Civil Aviation said in a statement on Friday.
Low-cost carriers registered growth of 38 per cent on international routes and 22 per cent on domestic routes.
Air cargo also rose 41 per cent annually to 606,000 tonnes in the first half of the year.
Overall, Saudi Arabia’s air connectivity expanded to 163 destinations, a 23 per cent increase on 2023, Gaca said.
"Saudi Arabia is now more connected to the world than ever before, delivering record numbers of passengers, flights, air cargo and connectivity during the first half of 2024," said Abdulaziz Al-Duailej, president of Gaca.
“Saudi Arabia is creating unprecedented opportunities for global aviation and the private sector."
The kingdom is investing heavily in aviation and tourism as part of its Vision 2030 strategy, which seeks to diversify its economy away from oil.
It aims to increase the aviation sector's contribution to gross domestic product to 7.8 billion Saudi riyals ($2.08 billion) and create 35,000 jobs by 2030.
Saudi Arabian tourism - in pictures
The Saudi Aviation Strategy also aims to extend the kingdom's connectivity, triple annual passenger traffic, establish two global long-haul connecting hubs and increase air cargo capacity, according to Gaca.
Saudi Arabia's aviation sector has already contributed $20.8 billion to its GDP, with aviation-related activities accounting for a further $32.2 billion in tourism receipts, Gaca said in a report in May.
The aviation sector alone has enabled 241,000 jobs and contributed to supporting a further 717,000 jobs in the tourism-related areas, the report said.
The kingdom is currently expanding aviation infrastructure, including airports and airline services.
In October last year, the kingdom also introduced reforms to help its aviation sector boost competitiveness, attract investors and increase transparency as part of a transformation plan that aims to attract $100 billion in private and public investments to the industry by 2030.
More than 100 companies offered bids to participate in the Abha Airport public-private partnership project to expand capacity from 1.5 million to 13 million passengers, Gaca said on Friday.
Meanwhile, the kingdom's new airline Riyadh Air, which aims to begin operations next year, signed an agreement with US-based Delta Air Lines this week.
As part of the agreement, the Saudi airline will be Delta's exclusive partner in Riyadh and beyond.
It will allow them to collaborate on flight times and routes, sell tickets on each other's flights and extend to other services, such as maintenance, repairs, ground handling and training, they said.
The airlines also said the partnership would include a non-stop service on Delta between the US and King Khalid International Airport in Riyadh.
No US airline currently offers non-stop flights to Saudi Arabia.
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The five pillars of Islam
1. Fasting
2. Prayer
3. Hajj
4. Shahada
5. Zakat
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The biog
Title: General Practitioner with a speciality in cardiology
Previous jobs: Worked in well-known hospitals Jaslok and Breach Candy in Mumbai, India
Education: Medical degree from the Government Medical College in Nagpur
How it all began: opened his first clinic in Ajman in 1993
Family: a 90-year-old mother, wife and two daughters
Remembers a time when medicines from India were purchased per kilo
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Scores in brief:
Boost Defenders 205-5 in 20 overs
(Colin Ingram 84 not out, Cameron Delport 36, William Somerville 2-28)
bt Auckland Aces 170 for 5 in 20 overs
(Rob O’Donnell 67 not out, Kyle Abbott 3-21).
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The specs: 2018 Nissan 370Z Nismo
Price, base / as tested: Dh182,178
Engine: 3.7-litre V6
Power: 350hp @ 7,400rpm
Torque: 374Nm @ 5,200rpm
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- Data-driven supply chain management professional: Dh30,000 to Dh50,000
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Opening Rugby Championship fixtures:Games can be watched on OSN Sports
Saturday: Australia v New Zealand, Sydney, 1pm (UAE)
Sunday: South Africa v Argentina, Port Elizabeth, 11pm (UAE)
Teams in the EHL
White Bears, Al Ain Theebs, Dubai Mighty Camels, Abu Dhabi Storms, Abu Dhabi Scorpions and Vipers
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