Follow Us: View From The Maindeck


MIDDLE EAST CARGO TAKES OFF


BY Edward HARDY H


as the Middle East cemented its spot as the global cargo led


powerhouse? Powered investment development, and by coordinated


strategies, modern expanding


global countries like the UAE, Qatar, and Saudi Arabia are


emerging “way ahead” of other regions in terms of long-term aviation strategy, particularly when it comes to air cargo. “What you see in the Middle East, and have been seeing probably


for 20 years now, is a completely different approach to aviation than you see in Europe,” Willie Walsh, director general of the International Air Transport Association (IATA), said. “You have alignment between the governments, the airports and the airlines, and they’re investing in passenger facilities, but particularly cargo facilities.” Dubai has become a case study in successful aviation-driven


economic development. Walsh recalled predicting the city would overtake London’s Heathrow Airport as the world’s top international hub—a forecast that materialised in 2014: “I think the Middle East is where the future lies. And I really admire what they’re doing, because you see people recognising the value that aviation gives.”


Investment vs indecision The contrast with Europe could not be starker. While the Gulf states forge ahead with new runways and purpose-built cargo hubs, Walsh sees Europe locked in a cycle of regulatory paralysis and cost- prohibitive infrastructure ambitions. “You don’t see new runways being built in Europe. You don’t see


that alignment between governments, airports and airlines in the same way as you see here,” he said. “What I witness in Dubai is a coordinated approach to maximise the benefit that aviation gives, so you have alignment between the governments, the airports


state-


infrastructure connectivity,


and the airlines, and they’re investing in facilities. You’ve got new runways being built, you’ve got cargo facilities being built, you’ve got networks that are expanding, so the Middle East has taken a lead in terms of investing for the future.” Using Heathrow as a prime example, Walsh questioned the


economic rationale behind the long-debated third runway. “Even if you ignore the environmental


issues... the cost of


building a third runway in the UK, particularly if it’s left to Heathrow to build it—you know… back then [in 2014–15], the estimated cost of the project was £18.6 billion. They were proposing to spend £800 million on developing a car park, so the incentive for Heathrow is completely different to the incentive you would see here in the Middle East. That’s why you have ridiculous costs in terms of expansion of Heathrow, and corresponding ridiculous increases in the charges that airlines would face to operate at Heathrow if it was allowed to go ahead. “I can understand why the UK government supports it, because


they get a big infrastructure project that they don’t have to spend any money on, but I don’t see it happening.”


Power shifts Walsh suggested that Europe’s declining importance as a transit hub is being compounded by its high operational costs and limited growth prospects. Transfer traffic—which historically helped airports like Heathrow maintain connectivity—is shifting towards the Middle East, where global airlines like Emirates and Qatar Airways have flourished. “It’s inevitable that the future, particularly in relation to cargo, will


rest in the Middle East and Asia, much more so than where it was traditionally in Europe and the US,” he said. “A hub gives you reach and


direct connectivity to your economy… because you can supplement the local demand with transfer traffic.” “They’ve managed to establish a global hub because of the global


connectivity that Dubai provides, and because of the interest in Dubai events like the World Cargo Symposium. Over 1,800 people coming here, not just because of cargo. People like travelling here, so I think European hubs will still be important on the global scale, but their dependence on high-volume transfer diminishes all the time.”


A dimming outlook While Walsh acknowledged that European and American hubs still play key roles in global aviation—largely due to strong origin-and- destination markets—he was blunt about their future influence in cargo and long-haul transfer. “The dependence on transfer traffic isn’t as hard,” he said of


European airports. “But when you have the most expensive hub airport in the world serving a transfer market that is typically low- yield… it doesn’t make sense.” In Asia, cities like Hong Kong and emerging hubs in China are also


stepping up, complicating Europe’s ability to recover lost ground. Airspace closures due to the Russia–Ukraine war, along with delays in aircraft delivery, have made Asia–Europe routes costlier and more complex, further undermining competitiveness. “As you have to fly to Asia taking a much longer route today,


the costs have significantly increased. You can’t compensate that with the fares,” said Walsh. Even if Russian airspace were to reopen, Walsh downplayed its


immediate impact: “It would be a positive… but I don’t think there are many airlines that are banking on Russian airspace reopening.”


www.aircargoweek.com


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16