UAE. The Middle East Duty Free Association (MEDFA) is expecting an +18.5% overall increase in turnover for 2005 across its membership base as many key retailers report impressive sales growth.
MEDFA President Colm McLoughlin delivered this projection to over 300 delegates on the first day of the MEDFA conference yesterday.
Last year, the duty free business in the region was worth some US$1.4 billion. But judging by the pace of development, McLoughlin noted that Dubai Duty Free alone may be generating over US$1 billion on its own by 2008.
At least seven major duty free retailers in the region have reported double-digit growth for the first three quarters of 2005, with Aldeasa Jordan leading the pack at +36%, followed by Cairo Duty Free (+32%) and Muscat Duty free (+23%).
And there are no signs that this boom is flattening out.
Investments in infrastructure such as airport expansions or new airports in the Middle East and North Africa region will total some US$30 billion by 2020. Of this, US$18 billion is earmarked to be spent in the United Arab Emirates alone.
The infrastructure projects complement and reflect the increasing proliferation of airlines in the region. Besides the entrance of low-cost carriers, full service national carriers are also building their fleets, with massive orders for Airbuses and B777s already placed.
Emirates Airlines for instance has US$37.4 billion worth of orders for A380s, A340s, B777s and A310Fs. From a current seat capacity of 20,000, the airline would soon be able to fly over 72,000 passengers.
McLoughlin noted that with private wealth in the Gulf states currently estimated at US$1.5 trillion and continuing to increase, travel is likely to continue booming.
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