Air Traffic Industry Analysis in KSA

A Complete Study of Air Traffic Industry in the KSA from 2024 to 2034

The KSA air traffic industry reached a valuation of US$ 12.6 billion in 2023. Demand for air traffic in Saudi Arabia recorded a Y-o-Y growth of 25.6% in 2023. The industry is expected to reach US$ 13.6 billion in 2024. Over the projection period (2024 to 2034), the KSA air traffic industry is projected to exhibit 8.6% CAGR and a total industry size of US$ 31.1 billion by 2034 end.

Due to the Kingdom's massive reform programs, Saudi Arabia's aviation traffic is proliferating, with flight movements increasing 26% to 403,223 in the first half of 2023. According to Saudi Air Navigation Services, total domestic and international flights totaled 305,156 in the first half of 2023, up 27% over the previous year. The remarkable growth of air traffic in Saudi Arabia will contribute to the development of the air transport sector's economies, supporting movement and tourism and connecting the Kingdom to the rest of the world.

Attribute	Details
The KSA Air Traffic Industry Estimated Value (2024)	US$ 13.6 billion
The KSA Air Traffic Industry Projected Size (2034)	US$ 31.1 billion
The KSA Air Traffic Industry CAGR (2024 to 2034)	8.6%

Key Dynamics in the KSA Air Traffic Industry

• Expansion of Airfreight Capacity and Infrastructure

Saudi Arabia is poised to capture a larger share of the air cargo industry in the Middle East by significantly expanding its airfreight capacity and infrastructure. The Kingdom currently holds only 33% of its total air cargo demand and 7% of the regional industry, but it aims to increase its share to 4.5 million tons by 2030, representing a 5.5-fold growth from its current 0.8 million tons.

These initiatives are expected to propel Saudi Arabia into a leading air cargo hub, attracting businesses and enhancing its position in the global logistics landscape. The Kingdom's strategic location at the crossroads of three continents and its commitment to infrastructure development make it well-positioned to capitalize on the growing demand for air cargo services.

• Air Cargo Traffic Rate

The air cargo traffic rate in the Kingdom of Saudi Arabia (KSA) is experiencing a remarkable recovery. National air operators have doubled their traffic rate compared to 2021 and are expected to exceed pre-pandemic levels in 2023. This growth is attributed to the increase in operational capacity in the air cargo sector, as well as the Kingdom's strong economic performance and the Vision 2030 strategy.

Several factors are driving the growth of air cargo traffic in KSA, including the rise of e-commerce, the growth of the healthcare sector, and the development of new industries. Given their strong financial performance and investment plans, national air operators are well-positioned to capitalize on this growth.

Comparative View of Adjacent KSA Air Traffic Industry

The KSA air traffic industry is set to be impacted by the peer or tangential industry. These include the airport ground transportation industry and the flight data monitoring and analysis industry. As per analysis, these related industries will develop unique differentiating strategies to pursue growth and opportunity.

KSA Air Traffic Industry:

Attribute	KSA Air Traffic Industry
CAGR (2024 to 2034)	8.6%
Growth Factor	Religious places like Mecca Medina are popular in the country.
Key Trend	The industry is rapidly adopting digital technologies, such as automation, data analytics, and artificial intelligence, to enhance operational efficiency and passenger experience.

Global Airport Ground Transportation Industry:

Attribute	Global Airport Ground Transportation Industry
CAGR (2024 to 2034)	4.1%
Growth Factor	Growth of the aviation sector across the globe
Key Trend	Tourists prefer private taxis and cabs for transportation to remote places.

Global Flight Data Monitoring and Analysis Industry:

Attribute	Global Flight Data Monitoring and Analysis Industry
CAGR (2024 to 2034)	8.4%
Growth Factor	The frequent use of flights in emerging economies.
Key Trend	Increased fuel efficiency with FDMA, government regulations, and concerns about safety awareness are key trends in the industry

Category-wise Insights

Male Tourists are the Leading Contributing Demographic in the Industry

The male category is predicted to expand at a CAGR of 7.7% throughout the forecast period. Male and female passengers to KSA are relatively evenly distributed, with a slight majority of male passengers. This reflects the country's cultural norms and regulations regarding travel for women.

Industry Growth Outlook by Key Demographic

Demographic	Male
Value CAGR	7.7%

Saudi Arabia's tourism industry is still relatively new and developing, and it is skewed towards male tourists. This is due to several factors, including the country's conservative social norms and the limited availability of tourist accommodations and attractions that cater to women. Air travel can be expensive, and women may have less disposable income than men. This can make it more difficult for women to afford air travel, even if they are interested in doing so.

The International Segment is Anticipated to Gain Traction

In terms of nationality, the international segment is projected to expand at the fastest CAGR of 10.8% during the forecast period. The Saudi government has recently introduced several visa reforms to make it easier for tourists from certain countries to visit the kingdom. This includes introducing new visa types, such as the e-visa, and extending the validity of visas.

Industry Growth Outlook by Key Nationality

Nationality	International
Value CAGR	10.8%

The Saudi government is also investing heavily in promoting tourism in the country. This includes launching industry campaigns, participating in international tourism fairs, and working with global airlines to promote KSA as a tourist destination. Saudi Arabia is also developing many new tourist attractions, such as museums, theme parks, and resorts. This is helping to make the country more appealing to international tourists.

Independent Traveler Likely to Generate More Revenue in the Industry

The increasing affluence of the Saudi population is leading to a growth in middle-class citizens who have more disposable income to spend on travel, including independent travel. The proliferation of social media, travel blogs, and travel shows is exposing many Saudi citizens and vice-versa to the world beyond their borders. This is leading to increased interest in independent travel as a way to experience different cultures and destinations.

Industry Growth Outlook by Key Tourist Type

Tourist Type	Independent Traveller
Value CAGR	11.5%

Independent travelers often perceive that they can have a more authentic and immersive travel experience by planning and executing their itineraries. This contrasts packaged tours, which may offer a more structured but less personalized experience. The independent traveler segment is expected to grow with a CAGR of 11.5% during the projection period.

Competitive Landscape

The KSA air traffic industry is one of the fastest-growing in the world, driven by factors such as population growth, rising disposable income, and government initiatives to promote tourism. The industry is currently dominated by Saudia, the national carrier, which holds an industry share of over 50%. However, there is a significant growth in low-cost carriers (LCCs) entering the industry, which is putting pressure on Saudia's prices and industry share.

Recent Developments:

• SalamAir successfully launched the ‘Capture the Beauty of Oman’ campaign across its 43 destinations in 2023, spotlighting the attractions of Oman and contributing to the airline's commitment to promote tourism in alignment with Oman's Vision 2040.
• Saudia, Saudi Arabia's national carrier, recently introduced its Green Flag Day offer, providing up to a 30 percent discount on all international destinations. This initiative aims to attract more tourists to the country during the vacation season.
• Air Arabia, a notable airline in the Kingdom of Saudi Arabia, inaugurated a direct flight from Ras Al Khaimah to Kozhikode, benefiting a significant amount of Indians given the large diaspora in the Gulf region.

Key Companies in this Industry

• Saudi Arabian Airlines (Saudia)
• Flynas
• Air Arabia
• Flyadeal
• SalamAir
• Gulf Air

KSA Air Traffic Industry by Category

By Age:

• 26 to 35 Years
• 36 to 45 Years
• 46 to 55 Years
• 56 to 65 Years
• 66 to 75 Years

By Demographic:

• Male
• Female

By Nationality:

• Domestic
• International

By Tourist Type:

• Independent Traveler
• Tour Group
• Package Traveler

Frequently Asked Questions

What is the Current KSA Air Traffic Industry Value?

The KSA air traffic industry reached a valuation of US$ 12.6 billion in 2023.

Which Category by Nationality is Expected to Grow with a Prominent CAGR?

The international category is anticipated to record a CAGR of 10.8% through 2034.

Which Tourist Type is Likely to Gain More Revenue in this Industry?

The independent traveler segment is expected to grow at a rate of 11.5%

Who are the Leading Players in the KSA Air Traffic Industry?

Some leading industry players in the industry are Saudi Arabian Airlines (Saudia), Flynas, SalamAir, and Gulf Air.

At What Rate is the KSA Air Traffic Industry Set to Grow from 2024 to 2034?

The KSA air traffic industry is likely to record a growth of 8.6% from 2024 to 2034.