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ACI Asia-Pacific & Middle East director general, Stefano Baronci, reflects on the rebranding of the region, the latest connectivity, traffic and economic trends, and looks forward to future events.
The last quarter was indeed historic for us as ACI Asia-Pacific has expanded its reach and influence, officially becoming ACI Asia-Pacific & Middle East (ACI APAC & MID).
This development aligns seamlessly with the recent inauguration of the Middle East office in Riyadh, demonstrating our commitment to inclusivity and elevating the role of the Middle East within the global aviation ecosystem.
Our new identity is guided by an ambitious vision: “Putting Asia-Pacific and Middle East Airports at the forefront of global aviation.” The vision is complemented by our new value proposition, “A journey of a thousand miles begins with thousands of airport smiles.”
This reaffirms our position that everything we do and every decision we make boils down to one fundamental goal: ensuring a happy passenger experience at airports.
The change reflects our readiness and steadfast commitment to expanding our reach and engaging with airports across the Asia-Pacific and Middle East regions.
By including the Middle East in the title, we will be better positioned to help our members access the latest industry developments and best practices and provide them with the necessary resources to make their airports more competitive and sustainable.
Additionally, this new name will help create a stronger and more unified identity for our association. The Middle East is a global hub for aviation, yet the region has its own challenges. Our expanded mandate and newly inaugurated Riyadh office are our pledge to address these issues and to provide the Middle East with the recognition and prominence it deserves.
We took the opportunity of the opening of Riyadh office to announce the findings of our new Airport Connectivity Report (See Page 40 for a more in-depth report).
The report paints a bright picture for the Middle East, with air connectivity surging by +26%, in stark contrast to the 38% decline observed in the Asia-Pacific. Remarkable progress can be seen at airports like Dubai (DXB) and Doha (DOH), with Hamad International Airport making a spectacular leap from 14th to 2nd place since 2019.
CONNECTIVITY TRENDS IN 2023
The number of domestic routes shows strong growth (+16%) in South Asia, and full recovery in Developed and Emerging East Asia. The Middle East and Oceania remain somewhat below the 2019 levels (at 88% and 94%, respectively), while South East Asia appears to have stabilised at around 73% of its 2019 domestic route connectivity.
This is mainly due to consolidation in the Indonesian market, where the 2023 number of domestic routes served is 59% of the 2019 levels. Internationally, route connectivity is recovering strongly in 2023, reaching 86% of 2019 levels compared with 56% in 2022. Most notable is the Emerging East Asia (China) recovery from just 4% in 2022 to 56% in 2023.
TRAFFIC RECOVERY & FORECAST
Looking ahead, by the close of 2023 we anticipate the Asia-Pacific region reaching 2.9 billion passengers, representing 87.3% of the 2019 level. With the uncertainty from both upside and downside factors, the region is expected to reach approximately 3.4 billion passengers, or 99.5% of the 2019 level, in 2024.
The Middle East region was the fastest-recovering market in 2022. This year, the region is predicted to continue its recovery and reach 394 million passengers, or 96.8% of the 2019 level. In 2024, the passenger number is projected to be 429 million, or 105.4% 2019’s traffic levels. This forecast may be impacted by the economic circumstances of neighbouring markets.
In terms of economic performance, the heartening news is that with rapid traffic recovery in H1 2023, airports in the Asia-Pacific region have returned to profitability for the first time since Q1 2020. EBITDA profit margins have rebounded impressively from -11% in Q4 2022 to +28% in Q2 2023, while net profit margins have recovered from -14% in Q4 2022 to +18% in Q2 2023.
We are excited about the opportunity to meet our members and industry stakeholders from the Pacific Islands at an upcoming new event called Airport Day.
The two-day event, set to take place in the Cook Islands on November 2-3, 2023, is designed to help airports in the Pacific Islands with capacity building in the areas of air route development, aviation security and facilitation, and environmental sustainability.
We are extremely grateful to our host, the Airport Authority of the Cook Islands, for providing us all with support in putting this event together.
As the magazine went to press, we were about a month away from the launch of our newest event, Airports Innovate, which will take place in Muscat, Oman, on November 20-22 and showcase some of the latest pioneering innovations within the aviation industry.
We are absolutely thrilled about the event, which we know will prove a huge success as we have curated a dynamic programme, brimming with influential speakers who are experts in their respective fields.
They will bring a wealth of knowledge and different perspectives with them, making it a must attend event.Airports Innovate is your gateway to the forefront of aviation innovation. I look forward to seeing you in Muscat!