OBG talks to Kjeld Binger, CEO, Airport International Group (AIG)

Interview: Kjeld Binger

How has regional unrest affected the Middle East and North Africa (MENA) aviation industry?

KJELD BINGER: There is simply no denying the impact of the Arab Spring on the region’s airline business. While other parts of the globe were focused on recovering from the economic downturn, the interwoven economies of the Arab world were drastically affected by political unrest in several countries. One consequence of regional turmoil was a sharp decrease in passenger traffic between Amman and Cairo in 2011, as well as the temporary suspension of Amman flights to and from the Libyan capital of Tripoli.

Although we expect 2012 to be stronger than 2011, there is hesitancy in both the regional and global aviation industry that is not conducive to break-out growth. Regionally, people are still waiting to see if 2012 will finally bring political stability. Globally, businesses and investors are cautious about faint signs that economic conditions have finally turned the corner and the worst is behind us.

How is the expansion of Queen Alia International Airport (QAIA) progressing and what impact will the project have on the Jordanian economy?

BINGER: In 2007, the Jordanian government decided to expand the services offered at QAIA under the supervision of AIG. With an investment value totalling $850m, the main objective of the project is to transform QAIA into a state-of-the-art airport as well as enhance the position of the facility as a regional aviation hub. As of December 2011, the new terminal project was roughly 80% complete, with several key construction and rehabilitation phases fully executed.

This project is a key part of Jordan’s effort to attract foreign direct investment (FDI) and tourists. The new terminal will serve 9m passengers annually, a marked increase from the current annual capacity of 3.5m passengers, and will see significant improvements made to its services, which will create a positive and lasting first impression on travellers and tourists.

What, in your opinion, is the potential for Jordan to become a regional aviation hub?

BINGER: QAIA cannot be compared with other airport hubs such as Dubai, which handles over 50m passengers per year. Thus, when evaluating the performance and potential of QAIA, it is important to look at it from the right perspective.

Our specific goal is to leverage the kingdom’s unique attractions, including its welcoming business atmosphere and political stability, to cultivate strong, sustainable growth for the airport over the next decade and beyond. Indeed, Jordan has several appealing qualities. His Majesty King Abdullah II has pushed for reforms that have maintained a safe atmosphere nationwide. Adding to this, the country is home to some of the most spectacular archaeological and natural sites in the world. In the aviation and tourism business, one important trend that will benefit Jordan is changing consumer behaviour. Namely, there is growing interest among travellers to participate in cultural and historical activities, which Jordan offers in abundance.

On the business side, the kingdom’s modern infrastructure and liberal investment policies offer a great environment for doing business. Further, the country’s strategic location makes it the ideal gateway for serving other key markets in the region.

The liberalisation of the Jordanian aviation industry has also been instrumental in positioning QAIA as an important player in the region. Jordan has over 20 Open Skies agreements with EU countries, which have facilitated international route development and opened up opportunities for local carriers and provided foreign carriers access to the Jordanian market.

A final key for Jordan to become an aviation centre is inter-modality; that is, the country needs to focus more efforts on developing a complete logistics system that features strong aviation, road, maritime and even rail linkages. Such a holistic approach would support nationwide economic development and make life easier for visitors and locally based businesses.