China's Strong Economic Growth Leads to Significant Increases in Air Travel to the Middle East

14.07.2008 — Travelport, one of the world’s largest service providers to the travel industry, has been tracking the growing economic ties between China and the Middle East,  which are significantly boosting demand for travel between the two regions.  In the 12-month period through May 2008, travel was up almost 30 percent between the two regions, compared to the year before.
 
The trade links also go both ways.  China’s booming economy is driving increased demand for the energy resources that the Gulf region provides.  China currently imports 32 percent of its oil and is expected to double its need for imported oil by 2010.  Approximately 60 percent of China's oil imports come from the Middle East and this is expected to increase to 70 percent by 2015.  At the same time, the enormous infrastructure and construction boom taking place in the Middle East is creating many opportunities for Chinese engineering, construction and equipment companies, and it is also driving a demand for Chinese labor.

The United Arab Emirates is by far the largest Middle Eastern destination for travelers to and from China.  Air travel between the UAE and China grew approximately 30 percent in 12 months through May 2008, and it accounts for close to 50 percent of all traffic between China and the Middle East.  Trade between the two countries grew over 40% in 2007, reaching a total volume of US$20.4 billion.  This includes US$17 billion worth of Chinese exports to the UAE.  There are 200,000 Chinese residents living in the UAE, which also anticipates a strong growth in tourist traffic from China in the coming years.  Additionally, the Abu Dhabi Tourism Authority (ADTA) is opening an office in China in order to serve a market that, according to World Tourism Organizations estimates, will become the world's largest outbound producer in total travel spending by 2015. 

Another increasingly important destination to continued economic growth is Egypt, which saw travel growth of about 35 percent over the past year, and accounts for approximately 11 percent of travel between the two regions.  Iran, which represents about 7 percent of all travel between the regions and is an important source of oil for China, saw a growth of almost 40 percent in the same period, while Israel, which also accounts for about the same volume, saw a growth of only 14 percent.

Airlines are reacting to continued expectations of growing interdependence and strong economic growth in both regions by adding flights and seat capacity.  For instance, for July 2008, the number of scheduled flight departures between China and the UAE is up 65 percent, between China and Qatar the number is up 56 percent and between China and Iran, up 50 percent.  Also, according to the Centre for Asia Pacific Aviation, Air China has plans to establish a second major hub (after Beijing) in Dubai – the largest city in the UAE, and AirAsia is considering establishing a hub in Bahrain.