Middle Eastern Airports Not ‘Immune’ to Recession

22 February 2009 (Last Updated February 22nd, 2009 18:30)

The International Air Transport Association has advised the Middle Eastern airport sector to relax foreign ownership regulations in light of the global recession. Speaking at the MEED Middle East Airport Projects 2009 conference in Dubai, IATA's regional vice president for the Middle E

The International Air Transport Association has advised the Middle Eastern airport sector to relax foreign ownership regulations in light of the global recession.

Speaking at the MEED Middle East Airport Projects 2009 conference in Dubai, IATA's regional vice president for the Middle East and North Africa region Dr Majdi Sabri warned the region's airports that the "Middle East will not be immune to the downturn."

Despite predictions that total passenger and cargo traffic will improve by 1.2% in the Middle East during 2009, capacity is set to outpace demand - therefore pulling down load factors and hurting profitability. "Regulatory impediments, government taxes and user charges are also adversely affecting our industry. As a result airlines here [in the Middle East] will lose $200m. Total industry losses will be $2.5bn," Sabri said.

"This economic crisis is a turning point. Airports and airlines must deliver significant change to weather this recession and emerge stronger on the other side," he added.

In order to adapt to the global financial conditions, IATA has made several recommendations to the Middle Eastern airport sector, including reducing both accident rates and baggage mishandlings. However, in a statement more acutely aimed at the region, Sabri identified commercial freedom as key to the airport sector's progress.

"Domestic liberalisation has sprouted new airlines in Saudi Arabia, United Arab Emirates, Jordan, Morocco, Lebanon, Bahrain and Libya. Open sky policies are delivering economic benefits in Lebanon, Kuwait, Bahrain and the United Arab Emirates. Morocco's open skies deal with Europe is boosting tourist arrivals towards tenmillion a year. But restrictive bilaterals elsewhere in the region are depressing growth," Sabri said.

"Our vision is for governments to ensure a level playing field and regulate safety, security, monopolies and environmental standards so airlines can do business like any other business," he added.

By Alex Hawkes.