Abdul Wahab Teffaha Secretary General - NuMOV

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Abdul Wahab Teffaha Secretary General - NuMOV

Abdul Wahab Teffaha

Secretary General

Arab Air Carriers Organization


Agenda

AACO Members’ Quick Facts

The Social and Economic Impact of Air Transport

Arab Air Transport – Recipe for Success

Major Issues to be Addressed by Arab Aviation

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German ‐ Near and Middle east aviation conference

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Current AACO Member Airlines

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German ‐ Near and Middle east aviation conference

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AACO Members Quick Facts - 2008

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Launch Year 1965

Member Airlines 24

Number of aircraft 675

Number of employees 128,000

Number of Passengers 97 m

Sales Revenue $US 25 bn

Daily departures 2,488

Number of airports 294

Countries served 99

German ‐ Near and Middle east aviation conference

9 June 2010


The Social and Economic Impact of Air Transport

Microsoft Chairman Bill Gates observed in an article for Time

Magazine in March 1999:

"The Wrights created one of the greatest cultural forces

since the development of writing, for their invention

effectively became the World Wide Web of that era, bringing

people, languages, ideas and values together. It also ushered

in an age of globalization, as the world's flight paths became

the superhighways of an emerging international economy.

Those superhighways of the sky not only revolutionized

international business; they also opened up isolated

economies, carried the cause of democracy around the world

and broke down every kind of political barrier. And they set

travelers on a path that would eventually lead beyond Earth's

atmosphere."

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The Social and Economic Impact of Air Transport

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German ‐ Near and Middle east aviation conference

Source: Oxford Economics

9 June 2010


The Social and Economic Impact of Air Transport

Trade:

Access to Global Geographic Markets

Reliable, safe, and guaranteed delivery of goods

Air cargo accounts for around 30% of world trade movements by value in 2010

One study estimated that each day saved in shipping time to the US is worth 0.8% of the

value of that good. If we extrapolate this to the world trade level, each additional day

spent in shipping costs globally an additional USD 100 billion

Tourism:

Air Tourism supported in 2007 more than 18,000 jobs, and contributed by around USD

400 billion to the global GDP

Air transport makes destinations easy to reach and therefore encourages ecotourism

Air Transport facilitates travel for employees whose vacation days are limited

Investment

In an IATA survey of more than 600 firms in five countries (Chile, China, Czech Republic,

France, and the US), 63% of responses indicated that air transport networks are vital or

very important to investment decisions

Vienna Airport is the regional headquarter of several multi-nationals, including 28

Fortune 500 firms due to the fact that the airport was marketed as its ability to reach

anywhere in Europe within 3 hours travel time

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German ‐ Near and Middle east aviation conference

Source: AACO, IATA, Oxford Economics

9 June 2010


The Social and Economic Impact of Air Transport

Labor Supply and Productivity:

Air transport allows easy movement of skilled work force, thus encouraging higher

productivity among employees by increasing competition levels

The Air transport sector in the Middle East is estimated to be around 80% more

productive than the economy as a whole, in spite of the fact that the oil industry (that

dominates the economies of several countries in the region) is a highly productive one

Consumer Welfare:

Air Transport promotes higher living standards through global trade, in addition to its

effect on VRF travel (Visiting Relatives and Friends), and on immigrants’ remittances to

their home country:

• Remittances are vital for some countries, for example, remittances accounted for

around 33% of GDP of Moldova and Tajikistan in 2006

• In the Middle East, remittances in Lebanon accounted for around 23% of the

country’s GDP in 2006

Environment

Air transport promotes ecotourism

Continuous R&D and innovation in the industry, in addition to the natural cyclicality of air

transport, requires from all stakeholders the highest levels of efficiency and cost control,

which consequently reflects positively on the environment

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German ‐ Near and Middle east aviation conference

Source: AACO, Oxford Economics, World Bank

9 June 2010


The Social and Economic Impact of Air Transport

Global Air Transport Middle East* Air Transport

•Middle East Countries include Near East and GCC countries except Egypt

•Direct effect: Activities in air transport industry itself

•Indirect effect: Activities of suppliers of the air transport industry, i.e. ground handlers, fuel suppliers, etc.

•Induced effect: Spending of those directly or indirectly employed in the air transport sector support jobs such as

retail outlets, etc.

Source: AACO, Oxford Economics

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Arab Air Transport – Recipe for Success

Continued Growth in Arab Economy:

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German ‐ Near and Middle east aviation conference

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Arab Countries Average Projected Real GDP Growth 2010-2011

2010 2011

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German ‐ Near and Middle east aviation conference

Source: AACO, IMF

9 June 2010


Economy and Air Transport are Highly Correlated

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German ‐ Near and Middle east aviation conference

Source: AACO, IATA, IMF

9 June 2010


Arab Air Transport Market

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German ‐ Near and Middle east aviation conference

Source: AACO, IATA

9 June 2010


AACO Members’ Members and Industry’s Industry s RPKs and ASKs Growth

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German ‐ Near and Middle east aviation conference

Source: AACO, IATA

9 June 2010


Arab Air Transport – Recipe for Success

Continued Growth in Arab Economy

Modern Fleet:

Average Fleet Age: 7.7 years as of January 2010

Efficient Operations

Lower Unit Cost

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German ‐ Near and Middle east aviation conference

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AACO Members’ Members Fleet Composition by Aircraft Type

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German ‐ Near and Middle east aviation conference

Source: AACO, Ascend

9 June 2010


AACO Members’ Members Aircraft Types, Numbers & Average Age per Type

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(As at 8/1/2010)

German ‐ Near and Middle east aviation conference

Source: AACO, Ascend

9 June 2010


Number of New Aircraft Expected to Join the Arab Airlines' Fleet

Number of New Aircraft Expected to Join the Arab Airlines' Fleet

(As at 8/1/2010)

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German ‐ Near and Middle east aviation conference

Source: AACO, Ascend

9 June 2010


Arab Air Transport – Recipe for Success

Continued Growth in Arab Economy

Modern Fleet:

Average Fleet Age: 7.7 years as of January 2010

Efficient Operations

Lower Unit Cost

Perfect Geographic Location

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German ‐ Near and Middle east aviation conference

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Arab World Location

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German ‐ Near and Middle east aviation conference

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Arab Air Transport – Recipe for Success

Continued Growth in Arab Economy

Modern Fleet:

Average Fleet Age: 7.7 years as of January 2010

Efficient Operations

Lower Unit Cost

Perfect Geographic Location

Arab Air Transport Market Maturity

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German ‐ Near and Middle east aviation conference

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Aviation Market Maturity Index 2009 – Opportunity for Growth

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German ‐ Near and Middle east aviation conference

Source: AACO, IATA

9 June 2010


Arab Air Transport – Recipe for Success

Continued Growth in Arab Economy

Modern Fleet:

Average Fleet Age: 7.7 years as of January 2010

Efficient Operations

Lower Unit Cost

Perfect Geographic Location

Arab Air Transport Market Maturity

Superior Customer Service and Consumer Experience

throughout the Air Transport Value Chain

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German ‐ Near and Middle east aviation conference

9 June 2010


Arab Air Transport – Recipe for Success

Continued Growth in Arab Economy

Modern Fleet:

Average Fleet Age: 7.7 years as of January 2010

Efficient Operations

Lower Unit Cost

Perfect Geographic Location

Arab Air Transport Market Maturity

Superior Customer Service and Consumer Experience throughout the Air

Transport Value Chain

Infrastructure Developments in Airports to Cater for the Growth in Passengers

and Freight:

Major Airport Development Taking Place in: UAE, Qatar, Saudi Arabia,

Kuwait, Oman, Egypt, Libya, Iraq, Sudan, Bahrain and Jordan

Total Cost of Airport Development is Estimated at Around USD 60 billion,

Among Which USD 21 billion Account for Airport Development Projects in UAE

Alone

Arab countries Collective Yearly Airport Capacity will Reach 400 million

Passengers After Completion of Current Plans

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Arab Airports Passenger Numbers and Growth

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German ‐ Near and Middle east aviation conference

Source: AACO, ACI

9 June 2010


Arab Airports

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German ‐ Near and Middle east aviation conference

9 June 2010


Major Issues to be Addressed by Arab Aviation

Open Market Access within the Arab world, and

Freedom of Movement of People and Goods

Equitable and Open Relationships with other Regions,

especially with Europe

Opening of Ownership and Path towards Consolidation

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