SYDNEY: Airport passenger traffic in the Asia-Pacific region is expected to take a 24 percent hit in the first quarter from the coronavirus, leading to a $3 billion decline in airport revenue and placing pressure on growth projects, an industry group said on Monday.
Airports Council International (ACI) Asia-Pacific said the cancelation of flights had led to lower airline landing and parking charges, a decline in passenger and security charges and a drop in retail spending that was hurting airport operators.
“Unlike airlines, who can choose to cancel flights or relocate their aircraft to other markets to reduce operating costs, airport operators manage immovable assets that cannot be closed down,” Stefano Baronci, Director General of ACI Asia-Pacific said in a statement.
“They are faced with immediate cash flow pressures with limited ability to reduce fixed costs and few resources to fund capacity expansion efforts for longer-term future growth,” he said.
The International Air Transport Association (IATA), which represents airlines, last week called for rules governing airport slots to be suspended immediately in light of the disruption to flight schedules caused by the coronavirus epidemic that first broke out in China in December.
Takeoff and landing slot rules mean airlines must fill at least 80 percent of their slots in any given season, or risk losing their allocation next time round.
ACI Asia-Pacific said it was sympathetic with the airlines’ needs to avoid flying empty planes simply to retain airport slots, but it said it wanted an evidence based, market-by-market review rather than blanket permission to cut flights without the risk of losing slots.
It said the IATA proposal would give airlines the freedom to cancel flights to and from congested airports not necessarily linked to the coronavirus outbreak, jeopardizing the ability for countries to stay connected with the world, which in turn would have knock-on effects on their economies.
IATA last week said the coronavirus epidemic could rob passenger airlines of up to $113 billion in revenue this year.
Coronavirus: Airport passenger traffic in Asia-Pacific to post first-quarter decline
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Coronavirus: Airport passenger traffic in Asia-Pacific to post first-quarter decline
- Coronavirus outbreak to cause a $3 billion decline in airport revenue, place pressure on growth projects
- IATA last week said the coronavirus epidemic could rob passenger airlines of up to $113 billion in revenue this year
Saudi Arabia and Egypt ink supply chain deal to boost industrial ties
RIYADH: Saudi Arabia’s Falak Investment and Egypt-based Al-Tawakol For Steel Industries and Galvanization Co. have signed a supply chain cooperation agreement to strengthen the telecommunications infrastructure in the Kingdom.
The deal was signed on the sidelines of Saudi Arabia’s Minister of Industry and Mineral Resources Bandar Alkhorayef’s visit to the North African nation.
The partnership will focus on the manufacturing and supply of telecommunications towers in the Kingdom, as well as boosting cooperation in steel industries, galvanization, and telecommunications infrastructure, according to a statement by the Egyptian government.
The agreement will also provide a framework, allowing the North African firm to participate in government and public sector tenders in Saudi Arabia.
The Kingdom and Egypt have long sustained strong business relations, with bilateral trade reaching $7.5 billion in the first nine months of this year, representing a 33.9 percent rise compared to the same period in 2023.
During the visit, Alkhorayef visited Hassan Abdullah, governor of the Central Bank of Egypt, and discussed ways to enhance economic relationships between both nations.
“I discussed with the Governor of the Central Bank of Egypt ways to enhance economic and trade cooperation between the Kingdom and Egypt. I also met with the head of the Egyptian Medicines Authority to discuss prospects for developing the pharmaceutical and vaccine industry and exchanging experiences,” wrote Alkhorayef on his X platform.
Alkhorayef met with Egypt’s Deputy Prime Minister for Industrial Development and Minister of Industry and Transport, Kamel Al-Wazir, to review potential avenues for boosting industrial cooperation between the two nations.
The Saudi minister also emphasized the vitality of a strong bilateral relationship with Egypt and said it would generate more job opportunities and strengthen respective economies.
During the meeting, Al-Wazir said that increasing collaboration with Arab nations is crucial for the Egypt’s sustainable development.
The Egyptian minister also underscored the importance of establishing joint factories and logistics zones in Egypt and Saudi Arabia to propel industrial integration and boost trade volume.
Saudi hotel sector sees 10% spending growth despite overall POS dip: SAMA
RIYADH: Spending in Saudi hotels saw a weekly rise of 10.4 percent between Dec. 8 and 14, reaching SR349.2 million ($92.9 million), according to official data.
The latest point-of-sale bulletin released by the Kingdom’s central bank, also known as SAMA, showed this was the only sector of the economy to record a positive change over the seven-day period.
It also witnessed growth in terms of transactions, surging 9.5 percent to reach 770,000.
Overall, the Kingdom’s POS data registered a weekly decrease of 9.7 percent to reach SR12.8 billion, down from SR14.2 billion the week before. The central bank’s figures showed that the education sector saw the largest drop at 44.4 percent to SR119.8 million.
Spending on telecommunication followed, recording a 17.7 percent slide to SR114.2 million.
Jewelry recorded a decline of 9.8 percent to come in at SR260 million, while expenditure on construction and building materials dipped by 6.2 percent to SR358.2 million.
Spending on food and beverages dropped by 15.6 percent to SR1.8 billion, claiming the second most significant share of the total POS value. Expenditure in restaurants and cafes claimed the biggest share, recording the smallest decline at 0.3 percent to SR1.9 billion.
Miscellaneous goods and services still accounted for the third largest POS share despite a 10.9 percent dip, reaching SR1.5 billion.
Spending in the leading three categories accounted for approximately 42 percent or SR5.3 billion of the week’s total value.
At 2.8 percent, the second smallest decrease occurred in gas stations, leading total payments to reach SR904.5 million. Expenditures on transportation decreased by 3.6 percent to SR712.7 million, claiming the third smallest downstick.
Geographically, Riyadh dominated POS transactions, representing around 35.1 percent of the total, with expenses in the capital reaching SR4.5 billion — an 8.5 percent decrease from the previous week.
Jeddah followed with a 7.1 percent dip to SR1.7 billion, and Dammam came in third at SR640 million, down 11 percent.
Hail experienced the most significant dip in spending, decreasing 15.1 percent to SR199.1 million. Tabouk recorded a decline of 14.1 percent to SR241.4 million, while Abha dropped 12.9 percent to SR145 million.
Hail and Abha saw the largest transaction decreases, dipping 7.9 percent and 6.8 percent, respectively, to 3.6 million and 2.8 million transactions.
Saudi tourism sector workforce grows 5.1%: GASTAT
- Saudis accounted for 25.6% of the total, with 245,905 nationals employed in tourism by the end of June
- Expatriates made up 74.4% at 713,270
RIYADH: Saudi Arabia’s tourism sector added jobs at a steady pace in the second quarter of 2024, with the workforce growing 5.1 percent year on year to 959,175, official data showed.
According to official data released by the General Authority for Statistics, the sector’s workforce rose 1.57 percent quarter on quarter, signaling sustained momentum in the industry.
Saudis accounted for 25.6 percent of the total, with 245,905 nationals employed in tourism by the end of June, while expatriates made up 74.4 percent at 713,270.
The increase highlights the Kingdom’s rapid transformation into a global tourism destination as part of its Vision 2030 economic diversification strategy, which aims to attract 150 million annual visitors by the end of the decade.
GASTAT data revealed that tourism jobs made up 5.7 percent of the total workforce in the second quarter, a slight decline of 0.2 percentage points from the same period last year.
In the private sector, tourism accounted for 8.6 percent of employment, down 0.5 percentage points year on year.
Breaking down the demographics further, male employees dominated the sector at 831,076, while female workers totaled 128,099.
GASTAT also reported gains in Saudi Arabia’s hotel sector, with occupancy rates rising to 55.4 percent in the second quarter, a 0.5 percentage point increase from last year. The average length of stay for guests surged by 17.6 percent to 5.2 nights.
However, the average daily room rate edged down slightly to SR725.5 ($193.08), a 0.4 percent drop from the second quarter of 2023, reflecting competitive pricing as the industry expands.
The tourism boom aligns with regional trends, as a Mastercard report released earlier this month highlights the sector’s role in Gulf economies, with Saudi Arabia leading efforts to attract global visitors.
In 2023, Saudi Arabia’s tourism sector contributed 11.5 percent to gross domestic product and generated $36 billion in revenue, both record highs, according to official data released earlier this year. The sector is projected to grow to 16 percent of GDP by 2034.
Oil Updates — Crude steady while market eyes Fed rate decision
SINGAPORE: Oil prices traded in a narrow range early on Wednesday as investors remained cautious ahead of an expected interest rate cut by the US Federal Reserve while weighing up the potential supply impact of tighter sanctions on Russia.
Brent futures inched up 1 cent at $73.20 a barrel at 7:20 a.m. Saudi time, while US West Texas Intermediate crude rose 1 cent to $70.08 a barrel.
The market is watching out for clues on interest rate moves for 2025 following the Federal Open Market Committee’s meeting, which ends later on Wednesday, analysts said.
“Additional sanctions from the West may limit some losses in today’s session, but a cautious tone persists in the lead-up to the FOMC meeting,” said Yeap Jun Rong, market strategist at IG.
“Looking ahead, oil prices are likely to remain constrained within their current range, with subdued price action expected to persist through the end of the year,” Yeap added.
The Fed on Wednesday is widely expected to cut interest rates for the third time since its policy easing cycle began.
“Projections for rate cuts in 2025 are being second-guessed, especially with Trump planning a comeback on January 20,” said Priyanka Sachdeva, senior market analyst with Phillip Nova.
“There is a prevailing narrative that Trump’s policies may lead to inflation, which, coupled with concerns about potential interference with the Federal Reserve’s autonomy, is causing oil investors to remain cautious,” she added.
Lower rates decrease borrowing costs, which can boost economic growth and demand for oil.
Meanwhile, the EU on Tuesday adopted a 15th package of sanctions against Russia over its invasion of Ukraine, adding an additional 33 vessels from Russia’s shadow fleet used for transporting crude or petroleum products. Britain also sanctioned 20 ships for carrying illicit Russian oil.
The fresh sanctions could stoke further oil price volatility, though they have not succeeded in shutting Russia out of the global oil trade.
In the US, American Petroleum Institute data on Tuesday showed that crude stocks fell by 4.69 million barrels in the week ended Dec. 13, a source said. Gasoline inventories rose by 2.45 million barrels, and distillate stocks rose by 744,000 barrels, according to the source.
Analysts projected US energy firms pulled about 1.6 million barrels of crude from storage during the week ended Dec. 13, according to a Reuters poll on Tuesday.
The US Energy Information Administration will release its oil storage data on Wednesday.
Saudi Cabinet approves standard incentives for industrial sector
RIYADH: Saudi Arabia’s Cabinet has approved a set of standardized incentives aimed at boosting the Kingdom’s industrial sector, marking a significant step in the nation’s ongoing efforts to diversify its economy.
The decision was made during a Cabinet meeting chaired by Crown Prince Mohammed bin Salman on Tuesday, according to the Saudi Press Agency.
The Cabinet also endorsed several other key measures, including regulatory support for the National Cybersecurity Authority and structural changes for the National Center for Marine Information. These initiatives are part of a broader strategy to strengthen various sectors of the economy and reduce Saudi Arabia’s longstanding dependence on oil revenues.
As part of the country’s push for economic diversification, the National Industrial Development and Logistics Program reported in August that the number of industrial establishments in Saudi Arabia grew by 60 percent from 7,206 in 2016 to 11,549 in 2023.
“The Cabinet’s approval of standard incentives for the industrial sector supports and enables the transformation journey in the Kingdom, which contributes to achieving economic diversification and raising the sector’s contribution to the gross domestic product,” said Saudi Finance Minister Mohammed Al-Jadaan in a post on the social media platform X.
The Cabinet also commended the recent visits of French Prime Minister Emmanuel Macron and UK Prime Minister Keir Starmer to Saudi Arabia, recognizing that such diplomatic engagements will enhance international cooperation in various fields.
Additionally, the Cabinet highlighted Saudi Arabia’s improved credit ratings, noting that recent upgrades by international agencies reflect the progress of the Kingdom’s economic reforms. In November, Moody’s raised Saudi Arabia’s long-term local and foreign currency issuer ratings to Aa3 from A1, signaling strong creditworthiness and the Kingdom's ability to meet its financial obligations.
Another significant development highlighted by the Cabinet was the launch of the Riyadh metro project, which is expected to enhance infrastructure, promote economic growth, and improve the quality of life for citizens.
The Cabinet also approved a memorandum of understanding between Saudi Arabia’s Ministry of Environment, Water, and Agriculture and Cuba’s environmental agency to strengthen cooperation in environmental protection. Furthermore, it authorized the Ministry of Industry and Mineral Resources to pursue a draft memorandum of understanding with Iraq’s Geological Survey to enhance geological and scientific collaboration between the two countries.
These decisions underscore Saudi Arabia’s commitment to advancing its economic and infrastructural development while strengthening international ties and environmental stewardship.
