The Middle-East and Africa air traffic management market is projected to grow at a CAGR of over 4% during the forecast period.
- The growth in passenger traffic is attracting investments into the market, as airports increase their passenger handling capacities. Besides, the growing emphasis on the modernization of air traffic management infrastructure is also driving the growth of the market.
- However, various operational challenges in air traffic management and related modernization projects, along with unprecedented factors, like the impact of the COVID-19, are challenging the market growth.
Key Market Trends
Passenger Traffic Growth Fostering Ongoing Modernization of ATM Systems in the Region
As per the International Air Transport Association (IATA), the Middle-East and Africa accounted for 12.6% of the global revenue passenger-kilometers in 2019, witnessing a 1.3% Y-o-Y growth. With a positive outlook for the global air passenger traffic numbers in the next 10 years, airlines are increasing their fleet size to cater their services to more passengers. Airlines are procuring more aircraft and adding more routes, thereby, increasing the number of flights to handle for the airports. As airspaces become busier, the necessity for better airspace management increases. Furthermore, the growth in passenger traffic has necessitated the construction of new airports and the expansion of airports, which resulted in the demand for new air traffic management (ATM) infrastructure and the capacity improvements in the existing ATM systems. Airport constructions/expansion activities are now in progress in almost every region around the world, with huge investments flowing into the same. The total investment in airport construction projects in the region is around USD 163.5 billion, representing huge business opportunities for the market in focus during the forecast period.
Saudi Arabia to Dominate the Market During the Forecast Period
Saudi Arabia is a renowned tourist hub and millions of people visit the country to offer pilgrimage in Mecca. The number of followers visiting the Holy City is estimated to triple to over 20 million in the upcoming period. Hence, to effectively streamline airline movement, an efficient air traffic management system has been deployed in the country. The General Authority of Civil Aviation (GACA) of Saudi Arabia currently oversees economic and safety regulation, air navigation services, and the operations of Saudi Arabia’s 28 existing airports comprising 6 international, 9 regional and 13 domestic airports. It aims to develop the Saudi aviation industry in accordance with the latest international standards and strengthen the position of the country as a globally influential player in civil aviation. Incorporated in 2016, Saudi Air Navigation Services (SANS) covers services for the entire Saudi airspace and provides air traffic management, air navigation systems including the procurement, operations, and maintenance of all air navigation systems. Indra has been working with SANS on the complete modernization of the country's air traffic management system since 2017, which consists of two en route control centers, four approach centers, and twenty towers. In March 2020, the company deployed two new control centers in the country, namely the Jeddah's en route and approach control center, and Dammam's approach control center. In October 2019, the newly constructed Terminal 1 of the King Abdulaziz International Airport became operational. In the initial phase, the airport has a passenger capacity of over 30 million and features 98 aircraft parking spots. In June 2018, Thales was selected by SANS as the preferred system integrator for its ATC network. The radars supplied by Thales are the first phase of SANS program that envisions replacing the existing ones installed throughout the country. Such inductions are expected to drive the market in Saudi Arabia, during the forecast period.
The Middle-East and Africa Air Traffic Management Market is dominated by international players such as Indra Sistemas SA, Thales Group, Honeywell International Inc., Elbit Systems Ltd., Leonardo S.p.A., and Rostec State Corporation. To support rapid growth in passenger traffic, the market players are focusing on the launch of new ATM systems with artificial intelligence (AI) capabilities to minimize the chances of human error and effectively increase the efficiency of scheduling. The key players are expected to benefit from the partnership with local producers of ATM systems, parts, and components as well as third-party software manufacturers of ATM systems. With the regional governing agencies shifting focus towards healthcare due to the ongoing COVID-19 pandemic, a slight delay in the ongoing projects are anticipated, resulting in a low liquidity scenario for the market players in the upcoming period.
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