Aviation360 MEA

The King Abdullah Petroleum Studies and Research Center’s report suggested that the Kingdom’s rapidly developing aviation industry can be strengthened by investing in cutting-edge technologies. The report was released in response to the Kingdom’s strategic plans to become a global tourism and logistics hub.

According to Abdulrahman Alwosheel, a research associate at the Riyadh-based center and co-author of the report, the Kingdom has the potential to become a gateway connecting Asia Pacific to Europe and America because of its strategic geopolitical location, which will also help it achieve its tourism goals as outlined in Vision 2030.

“There are several areas where Saudi Arabia can focus to enhance its aviation industry by improving infrastructure, increasing connectivity, investing in innovation and technology, developing a skilled workforce, and promoting tourism,” said Alwosheel.

According to the study, the Kingdom has achieved amazing strides in the tourism industry since the decision to permit tourist visas.

According to the KAPSARC research, progress in the Kingdom’s aviation industry is essential to accomplishing the objectives set forth in Vision 2030. By 2030, Saudi Arabia’s National Tourism Strategy hopes to host 100 million tourists and boost the industry’s share of the country’s GDP to more than 10%.
The National Logistics Strategy of Saudi Arabia, on the other hand, was introduced by Crown Prince Mohammed bin Salman in 2021 and intends to establish the Kingdom as a worldwide logistics hub connecting three continents and enhance transportation services. The strategy also seeks to improve the capabilities of the Kingdom’s air cargo sector by doubling its capacity to more than 4.5 million tons by 2030. 

According to Alwosheel, future advancements in domestic transportation could be essential to boosting Saudi Arabia’s tourism industry, which is currently growing rapidly in comparison to other countries in the area.

“Unlike the neighboring countries, such as Qatar, Bahrain, and the UAE, in which domestic transport needs are more limited, in Saudi Arabia, domestic transport can play a vital role in supporting growth by promoting and developing domestic tourism, including the development of aviation infrastructure and services,” he added. 
The researcher made the point that strategic alliances and joint ventures including airlines, suppliers, airports, and governmental organizations might allow the aviation sector to make the most of individual resources and competencies in order to advance the objectives of the Kingdom.

The report stressed the value of sustainability in the process of the Kingdom’s aviation industry’s overall development. The think tank said unexpected circumstances caused by the COVID-19 pandemic such as a drop in demand, disruption of the airline industry, and the resultant financial losses served as a wake-up call to promote sustainable pathways.

Alwosheel noted that the cost factor is one of the major challenges the aviation industry should address while propagating the use of sustainable aviation fuel. 

“SAF is more expensive than traditional fossil-based fuels, which can create a financial burden for airlines. However, with increasing demand and production, technological maturity, feedstock availability, and diversity, the cost of SAF is expected to decrease,” said Alwosheel. 

According to the International Air Transport Association, the production of sustainable aviation fuel is estimated to meet just 2 percent of the sector’s needs by 2025. 

According to Alwosheel, future advancements in domestic transportation could be essential to boosting Saudi Arabia’s tourism industry, which is currently growing rapidly in comparison to other countries in the area.
The researcher made the point that strategic alliances and joint ventures including airlines, suppliers, airports, and governmental organizations might allow the aviation sector to make the most of individual resources and competencies in order to advance the objectives of the Kingdom.

The report stressed the value of sustainability in the process of the Kingdom’s aviation industry’s overall development. According to the think tank, the COVID-19 pandemic’s unanticipated consequences, including a decline in demand, disruption of the aircraft sector, and the ensuing financial losses, acted as a wake-up call to encourage sustainable routes.

“SAF production must be aligned with the region’s conditions since the production of biofuels could be limited. However, integrating it with the existing industries (petrochemical) can help reduce capital costs in developing facilities dedicated to producing SAF by considering co-processing pathways,” the researcher said. 

“The development of a certification system that is universally recognized can be challenging. Consequently, with continued investment in research and development, increasing facilities for production and availability, and developing a robust certification system, the aviation industry can successfully embrace SAF,” said Alwosheel. 

The ‘Passenger Load Factor’

Passenger load factor is “the percentage of available seating capacity filled with passengers, regardless of the seating capacity designation made by the airline or the cabin layout.”

According to the KAPSARC research, PLF plays a critical role in evaluating the profitability of airlines because it shows that a carrier has sold the majority of the seats that are still available, allowing it to share its expenses among the entire number of passengers carried.

According to Andres Guzman, a colleague at KAPSARC, Saudi Arabia’s PLF has greatly improved, demonstrating the Kingdom’s expansion in the aviation industry.

“In fact, the lower PLF dilutes the benefits that aircraft manufacturers have made in the last years in improving fuel efficiency by considering new technology engines when the performance of the aviation sector is expressed in terms of the number of passengers instead of (the number of ) seats available,” said Guzman. 

All stakeholders, including airline companies, aircraft manufacturers, customers, airports, and governments, must work together to make the aviation industry sustainable, the study claims.

Despite financial difficulties, Guzman claimed that the replacement of the aircraft fleet had significantly enhanced the operation of the aviation industry since modern planes use less fuel, are safer, and require less maintenance.

“As sustainability has become a global concern, governments and financiers could foster a smoother transition of fleet renewal programs by offering financial incentives in compliance with legislation on emissions reduction,” he said.