The KSA air traffic industry reached a valuation of USD 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 USD 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 USD 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) | USD 13.6 billion |
| The KSA Air Traffic Industry Projected Size (2034) | USD 31.1 billion |
| The KSA Air Traffic Industry CAGR (2024 to 2034) | 8.6% |
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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.
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.
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.
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.
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:
The KSA air traffic industry reached a valuation of USD 12.6 billion in 2023.
The international category is anticipated to record a CAGR of 10.8% through 2034.
The independent traveler segment is expected to grow at a rate of 11.5%
Some leading industry players in the industry are Saudi Arabian Airlines (Saudia), Flynas, SalamAir, and Gulf Air.
The KSA air traffic industry is likely to record a growth of 8.6% from 2024 to 2034.
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