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Jeddah - Yasmine El Tohamy - RIYADH: Saudi Arabia unveiled its first “State of Aviation” report, highlighting the sector’s contributions to the Kingdom’s economic growth, as industry leaders gathered for the Future Aviation Forum.
Speaking at the opening ceremony of the three-day event in Riyadh, Saudi Minister of Transport and Logistic Services Saleh Al-Jasser emphasized the unprecedented importance of aviation.
Saudi Arabia’s aviation sector contributed $21 billion to the Kingdom’s gross domestic product in 2023 while generating an additional $32.2 billion in tourism receipts, positively impacting other key areas of the economy.
“This transformation is one that we invite the world to share. We seek private sector partners with expertise to help us achieve our ambition,” said Al-Jasser.
The minister also reflected on the progress made in the aviation industry over the past two years and how industry leaders collaborated to overcome a major crisis by addressing global challenges and unlocking new opportunities.
This collaboration led to the introduction of new global policies, the announcement of nearly $3 billion in aviation deals, the signing of the Riyadh Aviation Declaration, and the commencement of a new golden age for aviation.
The State of Aviation report by GACA revealed that the Kingdom’s aviation sector contributed $53 billion to the economy and supported approximately 958,000 jobs nationwide.
Furthermore, the regulator introduced its General Aviation Roadmap during the forum, aiming to foster the development of Saudi Arabia’s business jet and private industry.
With targeted investments in six specialized general aviation airports and other initiatives, the roadmap projects the sector’s contribution to GDP to reach around $2 billion and the creation of 35,000 new jobs by 2030.
Al-Jasser shared three brief points, emphasizing the importance of aviation in driving global growth and well-being, highlighting the enormous opportunities being created in Saudi Arabia for everyone, and noting how this week reflects Saudi Arabia’s commitment to the global aviation industry.
“Globally, aviation traffic numbers have passed pre-pandemic levels, with air cargo fueling 80 percent of the world’s commerce needs,” he continued.
Outlining the achievements and developments in Saudi Arabia’s civil aviation sector since 2022, Al-Jasser noted that the Kingdom recorded 111 million passengers last year and announced a comprehensive economic policy for the civil aviation sector.
He stated that the Kingdom confirmed the order of hundreds of aircraft through the existing Saudi carrier and launched the Riyadh King Salman International Airport master plan to support more than 100 million passengers by 2030.
The minister added: “We also opened Riyadh Integrated Special Logistics Zone, securing a leading global investor and AviLease, a global aircraft leasing company, and established Riyadh Air to connect Riyadh.”
During the keynote address, Abdulaziz Al-Duailej, president of the General Authority of Civil Aviation, underscored the importance of this forum and its role in enhancing connectivity.
“We’ve gone from almost zero flights to almost 37 million flights last year. this is unprecedented and also proves the resilience and strength of the global aviation industry,” Al-Duailej said.
He also underscored examples of challenges, including what he pressed on the most, manufacturing and supply chain disruption.
“The aviation industry globally is facing a serious shortage of manufacturing capabilities and challenges in the whole value chain of the process. This is an area where we need to focus on,” said the GACA president.
He added: “Also, environmental sustainability is a very important element and objective, as we all agreed to protect our mother nature, we all agreed on specific targets on net zero carbon emission. Nonetheless, we agree on what and on why, but we have issues around how.”
Commenting on the significant growth in Saudi Arabia’s aviation sector, he also mentioned that in 2023 the number of passengers reached a record 112 million, up from 88 million in 2022, marking a 27 percent year-on-year increase.
The first quarter of the current year has already seen an additional 20 percent increase in passenger numbers.
In terms of connectivity, the number of direct international destinations from the Kingdom rose to 148, marking a 47 percent increase from 2019 when there were 99 direct destinations.
“In cargo, we’ve not done as well as we anticipated, but we still have about 6 percent growth in air cargo, reaching about a million, and hopefully on the way to reaching 4.5 million,” Al-Duailej said.
The GACA chief said: “Aviation is a major economic enabler. I don’t think other national strategies will achieve their expected targets if we do not succeed in aviation.”
He further discussed Saudi Arabia’s expansion and development plans for airports, revealing that the current capacity of Saudi airports, set at 120 million passengers, is poised to exceed 300 million.
“We are already working on the current terminals and expanding King Salman’s and King Khaled airports from the current 30+ million, and by the end of 2025, we will reach 54 million and on the way to reaching 100+ million by 2030,” Al-Duailej said.
He added: “King Abdulaziz Airport in Jeddah, the largest airport in the Kingdom, handled 43 million passengers last year and is expected to reach about 50 million passengers.”
Moreover, Al-Duailej stressed privatization as a key strategy to enhance connectivity.
“We are also working on privatization. Privatization is another important element in achieving this connectivity. The Kingdom has the first successful PPP model in the Middle East region,” he explained.
In 2012, the GACA president added, the Kingdom signed the first concession agreement with the private sector to build the Medinah airport in the West, and by 2015, the airport started with 8 million passengers fully financed and funded and operated by the private sector.
He also stated that three weeks ago, an agreement was signed to expand an existing concession with the same company that originally held it.
This expansion will greatly increase the capacity from 8 million to about 17 million by 2028, more than doubling the current capacity.
During the third panel session, Al-Jasser further explained the collaborative effort with partners and the private sector in Saudi Arabia.
“The marine sector is highly privatized, where we signed concession agreements in our two main ports with the private sector to invest more than SR17 billion, to build new infrastructure to cater for growth,” the minister said.
Al-Jasser noted that the expansion plans for King Salman Airport are progressing well, and the airport is expected to handle 100 million passengers by 2030.
Additionally, the ministry is managing the transition period leading up to this goal by building more terminals and expanding existing ones to accommodate the increased passenger capacity before 2030.
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