Introduction
Space and aeronautics constitute one of the most perspective fields of manufacturing and research in the transportation industry. The world’s growing economy requires more planes, components, and systems to navigate around the world while reducing the costs and times of ferrying goods across the continents. Aviation market in Saudi Arabia is growing rapidly, following the liberalization of economics in the commercial flight sector. The growth rates for the country exceeded 8% in 2017, which is expected to increase further in the following years. It also represents the largest aerospace market in the Middle East, with nearly 30% of all commercial and military airplanes registered in the kingdom (“Connecting the Aviation”). The purpose of this paper is to analyze and outline the market needs for space and aeronautics technology in Saudi Arabia.
Political and Economic Development Context
In 2017, Saudi Arabia adopted the Saudi 2030 vision program, which suggested large-scale investments meant to diversify the economy and provide additional sources of revenue. This strategy is meant to reduce the dependence on oil prices and transform the kingdom into a global transportation hub between Europe, Africa, and Asia, taking advantage of the strategic positioning in between the continents. Between 2017 and 2018, the Saudi government increased the investment spending into space and aeronautics to 293 million USD, with expectations of generating revenue of 77 million dollars (“Connecting the Aviation”).
Aviation is an important position in the diversification and expansion of the Saudi economy. The country took a lesson from the UAE that invested heavily in its aviation sector in Dubai, which provides between 27% and 35% of the city’s entire revenue flow (“Connecting the Aviation”). According to the development plans, aviation will be an important catalyst that would propel the Saudi economy forward by helping establish new airports and promote the expansion of existing facilities. The country hopes to attract additional investors, entrepreneurs, and participants to the project.
Market Needs and Information
Saudi Arabia has a well-developed infrastructure to support the burgeoning aerospace industry, with 27 airports dotting the kingdom (“Connecting the Aviation”). Out of them, six handle international flights, eight provide support for regional transportation, and 13 are dedicated to domestic, commercial hauls. However, one of the primary market needs in this area revolves around the upgrading of existing airports and the construction of new ones. These trends are justified by financial and market forecasts, which anticipate significant growth in the number of passengers traveling to or through the Kingdom of Saudi Arabia, following the growth of the tourism industry. The International Air Transport Association (IATA) estimates an increase in passenger demand from 3.8 billion in 2016 to 7.8 billion air travelers a year by 2035 (“Connecting the Aviation”).
The major aircraft producers and operators are already preparing for this eventuality, as evidenced by the Global Market Forecast of 2017-2036, provided by Airbus, which claims that the Middle Eastern region will add substantial capacity to the market (“Global Market Forecast”). Boeing’s Current Market Outlook 2017-2036 estimates that between 5,000 to 6,000 new aircraft will be delivered to the Middle East in the next 20 years, roughly split between the major producers and competitors (“Current Market Outlook”). Smaller companies are also preparing to meet the needs and demands of the region. With Saudi Arabia constituting around 30% of the entire market, the needs of the region by 2035 are estimated at around 2,000 airships; This makes the Kingdom a very desired investment target in the future as well as a competitive platform for numerous aircraft producers.
Space Needs
While the majority of the country’s aerospace needs are revolving around aviation, Saudi Arabia also has a developing space industry. The recently-created Saudi Arabia space agency is already addressing the country’s needs for space exploration by acquiring over 1 billion dollars in yearly investments. This agency addresses the primary demand in Saudi Arabia, which includes space satellites to be used for commercial and military purposes. The primary needs of the local companies and agencies include geolocation, weather prediction and control, satellite TV and the Internet, as well as various military purposes. The latter is understandable, as Saudi Arabia and the countries of Gulf Cooperation Council (GCC) remain some of the only stable governments in the region. Saudi Arabia is also engaged in localized conflicts with Yemeni religious rebels, further increasing the need for independent satellite reconnaissance. Saudi Arabia is cooperating with NASA and Roscosmos in order to get these satellites to orbit.
Conclusions
Saudi Arabia’s market needs for avionics and aerospace products is already large and is expected to grow considerably in the next 20 years. The industry attracts significant investments from all over the world in order to ensure the upgrading of the local infrastructure, the provision of over 2,000 planes, and the creation of various satellites to be launched into orbit. The country’s market needs are estimated to grow even higher, as motivated by the increase in population numbers as well as the overall tourism activity around the world.
Works Cited
“Connecting the Aviation and Aerospace Industry to Saudi Arabia.”Saudi Airshow, 2019. Web.
“Current Market Outlook 20117-2036.”Boeing, 2017. Web.
“Global Market Forecast 2018-2037.” Airbus, 2018. Web.