The Middle East continues to emerge as a global aviation powerhouse, thanks to a confluence of favorable geography, government support, and significant infrastructure investment. According to Willie Walsh, Director-General of the International Air Transport Association (IATA), the region’s success is the result of strategic coordination between governments and airlines, robust infrastructure development, and the creation of both strong hub connectivity and origin-destination traffic.

Drivers of Regional Success

Airports like Dubai International have become world-class hubs by leveraging their geographic position to connect East and West. Walsh highlighted how this success is mirrored across the region, where governments actively support aviation growth. Carriers in the region have developed competitive products and services, making the Middle East a central player in global air transport.

Sustainability and SAF Shortfalls

However, Walsh expressed disappointment in the industry’s progress toward sustainability, particularly in the production of sustainable aviation fuel (SAF). “We had hoped for greater momentum post-2024, but current SAF production stands at just 2 million tonnes—only 0.7% of industry demand,” he noted. Despite optimism following the 2024 AGM in Dubai, this shortfall remains one of the sector’s most pressing concerns.

The implementation of CORSIA (Carbon Offsetting and Reduction Scheme for International Aviation) also presents challenges. While airlines accept that CORSIA adds cost, the concern lies in the insufficient availability of carbon credits. Only one country has so far provided eligible credits, though others are beginning to express interest.

Airfare Pressures and Cost Implications

Walsh emphasized that the industry’s shift to net-zero emissions by 2050 will inevitably lead to higher ticket prices. “There’s no such thing as a zero-cost transition,” he remarked. With fuel costs already making up around 25% of airline expenses—and potentially rising to 45% with sustainable alternatives—airlines will have little choice but to pass on these costs to consumers.

Aircraft Deliveries and Manufacturer Performance

Aircraft delivery delays continue to affect fleet expansion plans. Walsh noted improvement in Boeing’s performance, with many airline CEOs reporting better delivery outcomes than last year. Conversely, Airbus has faced criticism for late deliveries. While delivery numbers are increasing year over year, they remain below pre-pandemic levels.

Talent Demand and Workforce Dynamics

The Middle East’s aviation growth is also fueling a significant demand for skilled professionals. The region continues to attract trained personnel from other parts of the world, posing a retention challenge for airlines outside the Gulf. Walsh pointed out the importance of making the industry more attractive to a broader demographic, especially women. India leads in this regard, with the highest proportion of female pilots globally, followed by Ireland.

Multiple Hubs: Can the Region Sustain Them?

As cities like Dubai, Abu Dhabi, and Riyadh pursue ambitious airport expansion plans—including Dubai’s vision of five runways—questions arise about the region’s capacity to sustain multiple major hubs. Walsh believes that while two major hubs may thrive, maintaining three could be difficult due to geographic proximity and overlapping markets. He sees Dubai continuing as the dominant hub, while Riyadh focuses more on meeting local demand than on transfer traffic.

Airline Alliances and Strategic Independence

On the topic of global alliances, Walsh agreed with Emirates’ long-standing position against joining any. He explained that the airline’s scale and network render alliances unnecessary. However, he sees sense in Qatar Airways’ membership in oneworld and believes Etihad may benefit from similar partnerships, given its smaller size and revised strategy.

Egypt’s Growth Potential

Finally, Walsh touched on the evolving aviation landscape in Egypt. Following a recent meeting with the new chairman of EgyptAir, he acknowledged the airline’s growth plans and the obstacles posed by global aircraft delivery challenges. Nonetheless, he remains optimistic about EgyptAir’s future and reiterated IATA’s support in helping them meet their goals.