BMI's Executive Summary

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Big investments continue to be planned in Kuwait's aviation and airfreight sector. Apart from the introduction of an ‘open skies' agreement with the US and plans to expand the airport, locally-based airlines are renewing and expanding their fleets. Kuwait Airways' plan to buy 12 Boeing and seven Airbus planes from Kuwait's Aviation Lease and Finance Co. (ALAFCO) for about US$3bn, had to be aborted in September 2007 after political squabbling. However there are signs that the refleeing programme will be put back on track, with reports that after management changes at the state-owned airline the government was discussing US$4bn worth of purchases from Boeing and Airbus. Meanwhile, Kuwait-based budget airline Jazeera Airways said it was likely to exercise an option to buy six additional Airbus A320s. There was a possibility that Jazeera might also buy the ALAFCO planes originally intended for Kuwait Airways. As capacity grows, so will Kuwait's contribution to regional airfreight traffic. In our latest Kuwait Freight Transport Report, BMI concludes that airfreight traffic is likely to grow at an annual average rate of 6.6% in the 2007-2011 forecast period.

Various factors support this prediction. Although the recent oil price boom will ease over the next couple of years, we still see Kuwaiti GDP rising by an annual average of 5.3% over the next five years. Growing capacity, and growing trade in high-value/low-bulk goods will all contribute to airfreight growth. Kuwait is a relatively small country and its trading sector – and therefore transport network – has a vibrant reexport component. Kuwait has evolved as a trade hub for its larger neighbours, particularly Iran and Iraq, which have had limitations on their direct links with the international community.

BMI also forecasts 3.0% average annual growth for road haulage and 6.2% for maritime cargo in the five years to 2011. We estimate annual average pipeline throughput growth of 7.1%. We expect that the bulk of transport will continue to be waterborne and consist largely of oil and related goods. Transit trade, particularly that involving Iraq, will comprise raw materials involved in that country's eventual rebuilding (aggregates, basic metals and the like) and machinery related to building and construction work. Kuwait's overall business environment rating is now just above the average for the Middle East and Africa (MEA) region. It scores well in terms of its economic risk and its record of investment in infrastructure. However, it is below the average for freight growth, the regulatory environment and for the transport intensity index (a measure of the dynamism of foreign trade).

For the 2007-2011 forecast period, we expect the transport and communications sector to continue outpacing the economy as a whole. It will achieve average annual growth of 6.6%, versus 5.3% for overall GDP. The total value of transport and communications GDP will rise to US$5.64bn in nominal terms by 2011, representing 5.2% of Kuwait's GDP.

Contents

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Chapter 1 - Executive Summary

Chapter 2 - SWOT Analysis

Agility

PWC Logistics SWOT

Kuwait Economic SWOT

Kuwait Business Environment Industry SWOT

Chapter 3 - Business Environment Overview

Regional Overview

Table: Africa & Middle East (AME) Countries Freight Business Environment Ranking

Country Overview

Business Environment Ranking

Economics – Long-Term Risk

Politics – Long-Term Risk

Freight Transport Growth

Transport Infrastructure Growth

Regulatory Environment

Competitive Environment

Transport Intensity

Political Risk Summary

Economic Risk Summary

Business Environment Risk Summary

Legal Issues

Labour Force

Chapter 4 - Industry Trends And Developments

Rail

Air

Pipelines

Chapter 5 - Industry Forecast Scenario

Macroeconomic Environment

Table: Economic Activity

Chapter 6 - Country Snapshot: Kuwait Demographic Data

Section 1: Population:

Table: Demographic Indicators (2005)

Table: Rural/Urban Breakdown

Section 2: Education & Healthcare

Table: Education

Table: Healthcare: Vital Statistics

Table: Healthcare: Expenditure

Section 3: Labour Market And Spending Power

Table: Employment Indicators

Table: Consumption and Stratification

Transport Outlook

Table: Kuwait Main Industry/Macro Indicators

Freight turnover (domestic and international):

Chapter 7 - Trade Environment

Overview

Major Export Markets

Tariffs

Free Trade Zones

Exchange Controls

Total value of imports (US$mn)

Table: Total Value of Exports (US$mn)

Table: Top Export Destinations, US$mn

Table: Top Import Sources

Table: Export Trade, % y-o-y

Table: Import Trade, % y-o-y

Chapter 8 - Market Overview

Multimodal

Infrastructure

Competitive Landscape: Multimodal

Road

Infrastructure

Air

Infrastructure

Competitive Landscape: Aviation

Company Profiles

Water

Infrastructure

Competitive Landscape: Maritime

Company Profiles

Pipelines

Competitive Landscape: Pipelines

Chapter 9 - BMI Forecast Modelling

How We Generate Our Industry Forecasts

Transport Industry

Sources

Chapter 10 - Appendix: Regional Demographic Data

The Long View: Data Over The Economic Cycle (2000-2007)

Population

Household Spending Per Capita, US$

Private Consumption Per Capita, US$ PPP

Market Size, GDP, US$bn

Competitive Landscape for Middle East & Africa Freight Transport Reports: Sample of Companies Ranked

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Analysis of latest projects across the freight transport sector – road, rail, air, sea, logistics – including market overview which provides an outline of the key elements driving development. SWOT analysis of the state’s business environment, transport sector, politics and economics, which carefully evaluates the short- and medium-term issues facing the industry.

Network of Middle Eastern & African Freight Transport Sources

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BMI's Middle Eastern & African Freight Transport Reports are based on an extensive network of multilateral organisations, government departments, freight transport industry associations, chambers of commerce and company reports. Information sources include: