Madinah airport’s expansion on track

Saudi Arabia is working aggressively to boost it tourism and aviation industries.

Keeping up with the growing need, KSA has just opened the first phase of its airport expansion project. The US$1.2 billion expansion plan consists of a three-level terminal with 16 aircraft stands and boarding bridges. For Haj and Umrah pilgrims, the airport expansion plan comes as a boon.

Frost & Sullivan estimates that the KSA has close to 11 m tourists annually of which 5.7 m are aviation passengers. Aviation traffic is likely to grow at a compound annual growth rate (CAGR) of 27.2% over the next decade or so. In view of this, the airport expansion project assumes special significance.

The new airport is expected to significantly boost Madinah’s economy. Besides improving commercial trade to more than US$ 107 m, almost 20,000 new job opportunities will be created and housing accommodation for an excess of 100,000 residents will require new constructions.

“Privatisation is seen as a welcome move as it provides a more competitive environment for airports to function. Besides improving efficiency, privatisation ensures that airport management will have a more focused business outlook that could contribute to the economy of the KSA’ says Vinod Cartic, senior consultant, business and financial services, Frost & Sullivan. “Growth is also more likely in the privatisation set up with airports looking to non-aeronautical revenue sources as well.”

With the KSA economy given a boost by high oil prices, a burgeoning young population with higher disposable income, enhanced aviation infrastructure, and an open capital market attracting greater foreign investment, the overall outlook for the KSA’s aviation sector is very positive.