Middle East Airlines’ Orders Set To Double Fleet Size

With six of the 14 airlines based in the Gulf Cooperation Council (GCC) states boasting order books bigger than their existing fleets, some question whether the threat of overcapacity looms in the region’s rapidly expanding commercial aviation sector.

At least 1,525 airplanes currently on order will more than double the existing fleet of nearly 1,200 airliners operating in the UAE, Saudi Arabia, Qatar, Oman, Kuwait, and Bahrain. Qatar Airways alone has orders for a total of 330 airplanes, with Emirates just behind at 305.

In terms of the region’s installed fleet, Europe's Airbus is ahead of its rival Boeing with more than 660 units in service. But the U.S. airframer leads the order backlog with nearly 800 more.

Dubai-based Emirates—the only regional carrier with a widebody-only fleet—and Qatar Airways lead the GCC in terms of existing fleet size, with both currently operating 264 aircraft. Saudia has 163 and Etihad Airways 115; the rest of the region’s airlines have fewer than 100 aircraft each. 

Emirates, Qatar Airways, Saudia, and Etihad account for two-thirds of in-fleet airliners and just under 60% of current orders, according to data specialist Cirium.

Exceptional Profitability

Earlier this year, Cirium noted that three major markets—the UAE, Saudi Arabia, and Qatar—each maintain aircraft backlogs exceeding 100% of their current installed fleets. The total regional backlog, including Embraer and ATR models, comprises approximately 1,615 aircraft scheduled for delivery through 2035, worth $200 billion at 2025 prices.

“Middle Eastern airlines have demonstrated exceptional profitability recovery,” the company said. “While representing 6% of global fleet capacity, the region contributes more than 12% of total global airline profits.” 

Meanwhile, the International Air Transport Association projects the Middle East will generate $5 billion to $6 billion of the estimated $36 billion in global airline net profits for 2025.

Ominously for flag carriers, low-cost carrier (LCC) airlines have placed orders for the Airbus A330 widebody, signaling further competition. Flydubai has ordered 30 A330s, while Saudi Arabia’s Flynas and Flyadeal have ordered 15 and 10, respectively. Flydubai has also ordered 30 Boeing 787s. The regional LCC market share of 29% last year is expected to grow, according to aviation analyst OAG.

Sovereign Infrastructure

“The region has effectively gone from having a handful of legacy flag carriers people didn't know about to building some of the most recognizable global aviation brands in the world,” said Zahra Knapper Al-Bahrani, partner at law firm Baker Botts in Dubai. “The transformation is genuinely extraordinary by any global benchmark.” 

Regional aviation “is about sovereign infrastructure,” she added. “It's not just a commercial asset.” Its carriers are almost instruments of the GDP diversification of tourism, strategy, and soft power. “Just because they're state-owned doesn't mean flag carriers are protected at all costs,” she said. “I don't think that's the goal. It's more using aviation as a growth engine. State ownership… is less about subsidy and control and more about alignment with national economic plans and diversification, which they've achieved. Aviation capacity is not necessarily a reward for demand, per se. It's often a precondition for it.”

Not a Zero-sum Game

Independent analyst and consultant Brendan Sobie said the Gulf’s network carriers are mainly competing in a bigger playing field for intercontinental connecting passengers. 

“This is not a zero-sum game,” he said. “This is a market that continues to grow, and if there is overcapacity and yield pressure, it's not just about long-haul expansion from a few Gulf carriers but expansion from a much wider basket of airlines.”

Plans for the expansion of Dubai’s Al Maktoum International Airport (OMDW) involve an ultimate capacity of 260 million passengers per annum (mppa) by 2035. Zayed International Airport in Abu Dhabi (OMAA) is reportedly planning to expand capacity to 65 million passengers per annum by 2032. Hamad International (OTHH) in Qatar is said to be planning an “ultimate” capacity of 75 million passengers.

“It's not a zero-sum game for the airports either,” Sobie said. “They are competing not only with each other but hub airports in other regions. Saudi Vision 2030 is also not just about Riyadh becoming a global hub with Riyadh Air but other segments of traffic that take into account the anticipated growth in Saudi Arabia's outbound—big, growing, and young population hungry to travel—and inbound—opening up of tourism—segments.”

Mayur Patel, Singapore-based regional director for Asia Pacific and the Middle East with airline data group OAG, said there is a material risk of overcapacity if all announced growth—fleet orders, network launches, new entrants—is delivered without matching demand growth.

However, evidence suggests demand is recovering, and Gulf governments’ tourism and visa policies and investments aim to stimulate demand. Outcomes depend on execution, route discipline, and how quickly demand follows capacity. 

“In short, risk exists, but demand tailwinds and strategic state support reduce the probability of a systemic capacity glut in the short term,” Patel said.

Ambitious Goals

The signs indicate that competition in the region will continue to intensify. Saudi Arabia's Riyadh Air became the region’s 14th active airline when it launched flights to London Heathrow on October 26. 

Abdullah Aljawini, managing director of Riyadh-based consultancy Dawli Aerospace, said several factors would determine whether the airline could meet its ambitious goals and position itself as a global premium carrier. Fleet readiness, timely aircraft order delivery schedules, certification of crew, and securing route approvals would all be decisive elements.

“In addition, the selection of Riyadh Air to operate four classes of service at inception—business elite, business class, premium economy, and standard economy—[would] pose a significant challenge for any startup airline, as economies of scale will be harder to reach,” he said. “This usually translates to the extension of profitability targets.”

Patel said Riyadh Air’s large widebody orderbook and long-haul ambitions meant it would indeed grow into a significant premium long-haul connector over the next two to three years. 

“It will likely pull some transfer traffic to Riyadh, particularly for Europe-Asia and South Asia flows, but fully displacing Dubai, Abu Dhabi, or Doha as the dominant transfer hubs will depend on slot infrastructure, airline partnerships, transit experience, and LCC vs legacy competition,” he said.

Material Competitor

Riyadh Air will be a material new competitor for transfer traffic and will reshape some flows—notably between Europe and Asia via the kingdom, Patel believes. 

Construction of King Salman International Airport, Riyadh Air’s base, is expected to have six runways upon completion in 2030, and is seen as a major stepping stone allowing Saudi Arabia to target 330 million passengers a year by the end of the decade.

Gregory Newman, v-p at U.S. flight-deck crew placement portal PilotsGlobal, said the airline’s 124 aircraft on order would require more than 700 pilots during the initial build-up phase.

“Given the exceptionally strong interest from the global pilot community—over 5,000 pilots [seeking involvement]—Riyadh Air has firmly positioned itself as a top-choice employer. We do not anticipate any significant challenges in meeting its pilot hiring requirements.”

Time to Plan

In 2022, management consultancy Oliver Wyman predicted the Middle East would be the region affected soonest by the flight crew shortage outside of North America, driven by a projected sharp increase in air travel demand in future years. It forecast the region could face a shortage of 3,000 pilots as early as 2023, and 18,000 by 2032.

Newman said that Gulf airlines are not experiencing pilot shortages, but recruitment is becoming more challenging. Increased competition among local carriers, growing European demand, and emerging demand in an Asia-Pacific region that’s expected to require over 230,000 new pilots by 2042, all contribute to constraints on the flow of qualified candidates into the region.

Aircraft deliveries in 2025 are still facing significant delays, primarily due to persistent supply chain challenges, engine shortages, and certification backlogs, and are not expected to normalize until around 2034. 

“This provides Gulf airlines with time to plan and proactively execute their recruitment strategies,” Newman said. “We find Oliver Wyman’s report… to be reasonable, as this will put additional pressure on local carriers regarding pilot recruitment and marketing, especially for massively scaling players like Emirates and Etihad.”

Natural Targets

Maintenance, repair, and overhaul (MRO) is another area where Gulf airlines are eyeing the international stage. But Mike Stengel, an analyst with Michigan-based consulting firm Aerodynamic Advisory, said that the MRO arms of the four main regional airlines had yet to emerge as serious competitors to established providers in Europe, Asia, and the U.S.

“Operators in the Gulf and Middle East are likely the priority, and Africa is a natural target as well, [given] proximity and stronger cultural ties. India could also be an opportunity, although its rapidly growing means there’s a strengthening case for building domestic capabilities rather than continuing to send aircraft abroad.”

Stengel said incumbent MRO suppliers in Europe, Asia, and the U.S. remain the overall juggernauts, although Gulf-based MROs are incrementally growing their influence. 

“Since MRO demand in the Middle East is far more concentrated compared to Europe to Asia, there is more limited opportunity within… to chase third-party MRO opportunities, so it would be unwise for MRO providers in the GCC to pursue a rapid build-up of capabilities.”

Voluntary SAF Target

Analysts and industry financiers expect the Middle East—and especially Saudi Arabia—to be a strong candidate for early and significant production of sustainable aviation fuel (SAF).

Carl Nyberg, senior v-p of commercial and renewable products at Finland-based Neste Corp., said the company is working with supply chain partners to grow the global availability of Neste MY SAF, which is used by leading global airlines, including Emirates. Neste claims to be the world’s leading producer of SAF with a current global production capability of 1.5 million tonnes per annum. 

“Among the Middle East aviation players, we have announced, for instance, SAF deliveries to Emirates for flights from Singapore Changi Airport and from Amsterdam Airport Schiphol as well as our partnership with [the UAE’s] ENOC Group in 2023,” said Nyberg.

Neste has seen positive developments in aviation in Europe, with the recent ReFuelEU and UK SAF mandates, as well as in the Asia-Pacific region, where Singapore and Japan have set SAF targets. Additionally, the U.S. has seen supportive policies at both the state and federal levels. 

“Currently, there are no mandates in the Middle East, although the UAE has set a voluntary 1% SAF target for 2031 and other countries are exploring SAF policies,” he said. 

Growing the Traffic Pie

Richard Aboulafia, managing director at AeroDynamic Advisory, said that aggressive policies, infrastructure creation, and fleet investments could stimulate traffic slightly, but not significantly. “At a certain point, things turn cannibalistic,” he said.

“On the other hand, the shift is going from long-haul super-connector traffic to regional traffic, so at least there are new business models involved, which supports growth rather than simply pursuing other airlines’ traffic.”

Aboulafia said the Mideast super-connectors have achieved remarkable growth and created impressive businesses, even if much of the traffic has come from other places. 

He argues they now face serious competition from others with the same idea in Turkey and Saudi Arabia, as well as new creations in their home markets, and, perhaps most of all, revitalized competition from the places they’ve been taking traffic from—India, but also Ethiopia, Egypt, Morocco, and elsewhere.

“None of this renewed competition, nor infrastructure investment, nor fleet growth plans, is going to meaningfully grow the traffic pie,” he said. “Unless international traffic grows faster than expected, the big legacy super-connectors will either need to scale back growth plans or cut fares, reducing profits.”