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Airline expansions and eVTOL updates from Dubai

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What we're tracking today

TODAY: A basket of aviation updates + Qatar and Kuwait’s PMIs are in

Good morning, friends. The news cycle has slowed considerably, but there’s a handful of aviation updates emerging from the second day of the Arabian Travel Market in Dubai to delve into.

HAPPENING THIS WEEK-

Etihad Cargo is hosting the MiPharma Global Conference in collaboration with Abu Dhabi’s Department of Culture and Tourism through to Friday at Conrad Abu Dhabi Etihad Towers, according to a press release. The networking event highlights Abu Dhabi's growing significance as a global pharma logistics hub, bringing together international stakeholders active in pharma supply chains to collaborate on vertical integration and boost pharma logistics.

WATCH THIS SPACE-

#1- A new international airport in Egypt: President Abdel Fattah El Sisi has issued a legislation allocating 7.5 mn sqm state-owned land plot on Egypt’s Northwest coast of Matrouh to the Aviation Ministry to build an international airport, according to the country’s Official Gazette.

#2- Iraq’s Nasiriyah International Airport project is to be finished within the next yearwith 20% of the project completed so far, Transport Ministry spokesman Maytham Al Safi told INA. Iraq is kicking off two plans, the first is to boost airport infrastructure and maintenance at airports in Baghdad, Basra and Najaf, while the second sees Iraq collaborating with the International Finance Corporation (IFC) to rehabilitate Baghdad Airport, undergo expansions, or build a new airport, Al Safi said.

#3- Qatar Airways and Royal Jordan are set to resume Libya flights this month after a decade-long hiatus, according to a statement released earlier this week. Discussions to resume flights with Saudia are underway, Libyan Transport Minister Mohamed Al-Shahoubi said. The move comes following Libya’s efforts to lift the ban on flights to Libya.

#4- Boeing jet parts held up by Russian sanctions are leading to delivery delays for 787 Dreamliners, The Wall Street Journal reports. A supplier of temperature-regulating parts for the aircraft, RTX Collins Aerospace, has ceased its operations in Russia and shifted production to the West. The supplier's new factory lines in the US and the UK are not currently manufacturing at a rate that can keep up with Boeing’s increased production of wide-body jets leading to a decreased supply of heat exchangers. The company is warning investors that it will not be delivering as many Dreamliner jets as anticipated this year.

ON A RELATED NOTE- The US Federal Aviation Administration (FAA) has launched an investigation into Boeing’s 787 dreamliner to confirm if “company employees may have falsified aircraft records,” after the firm said employees had committed “misconduct” by falsely claiming some tests had been completed, Reuters reports, citing an FAA statement. The investigation will look into whether Boeing confirmed that there was sufficient bonding and grounding where the wings join the fuselage on its 787 Dreamliner aircrafts.

#5- The EU has proposed restrictions on 11 ships Russia is using to sustain its war efforts against Ukraine, Bloomberg reports. The sanctions, if approved by member states, would ban the vessels from accessing EU ports and anchorage zones and bar them from using European companies for various operational services. This would apply to technical assistance and ins., including “bunkering, ship supply services, crew change services, cargo loading and discharge services, fendering and tug services,” according to a document seen by Bloomberg.

BACKGROUND- The move comes amid the EU’s efforts to crack down on Russia’s circumvention of the G7 price cap on oil. In a similar move, the US began imposing sanctions last November on shipping firms accused of transporting Russian crude priced above the USD 60 per barrel G7 price cap.

MARKET WATCH-

#1- Oil fell this morning in early trading on the back of increased stockpiles of US crude and fuel and anticipation rising ahead of OPEC+ meeting in June, Reuters reports. Brent crude futures fell 0.36% to USD 82.86 a barrel by 03.48 GMT, while US West Texas Intermediate (WTI) dropped 0.32% at USD 78.13 a barrel, the newswire says.

#2-Drewry’s Multipurpose Time Charter index surpasses April expectations: The Drewry Multipurpose Time Charter Index — which tracks one-year period charter rates across various sizes of breakbulk and cargo vessels — now stands at USD 9,048 per day (pd), above April’s USD 8,850 pd forecast, with the boost attributed to disruptions at the Suez and Panama canals, Drewry reports. The time charter index is expected to hold steady in May, with a possible slight increase.

OUR NEXT CONFERENCE IN CAIRO-

Foreign investors are falling in love with Egypt again… Foreign investors we speak with (debt, equity, and strategic alike) have growing appetite for Egypt. They’re buying into local debt, eyeing promising shares, and committing bns of USD to both new ventures here and the growth of their existing businesses. They like the Egypt story that’s taking shape after the float of the EGP, and its competitive advantages are clear to many of them: It’s a massive consumer opportunity and a regional export hub of tomorrow.

The Enterprise Optimism Forum 2024 will do exactly what it says on the tin: Spark conversations about a future that sees Saudi Arabia, Egypt, and the the UAE at the heart of a more vital Middle East economy — and provide an early, actionable roadmap for those who are “long Egypt.”

We’ll be talking with you about the agenda over the coming couple of weeks. It features speakers from Egypt and abroad who are future-proofing their businesses and angling to capture tomorrow’s opportunities — and who aren’t afraid to answer some tough questions.

*** Interested in attending? Tap or click here to let us know. Seating is limited.

CIRCLE YOUR CALENDAR-

The UAE will host The Airport Show from Tuesday, 14 May through to Thursday, 16 May in Dubai. The event brings together airport suppliers, airport service providers, aviation executives, and regional decision makers to explore current innovations and new technologies.

Iran will host the International Exhibition of Rail Transportation and RelatedIndustries from Saturday 18 May to Tuesday 21 May in Tehran. The exhibition looks to attract domestic and international firms to showcase Iran’s local rail manufacturing capabilities and to acquaint industry players with developments made in the industry worldwide.

The UAE will host The Electric Vehicle Innovation Summit from Monday, 20 May to Wednesday, 22 May in Abu Dhabi. The event will see industry leaders come together to discuss sustainable mobility and tapping into groundbreaking advancements in electric vehicles while engaging with key decision-makers.

Barbados will hostUNCTAD’sGlobal Supply Chain Forum from Tuesday, 21 May to Friday, 24 May in Bridgetown. UNCTAD is holding the event in collaboration with the Government of Barbados, which aims to evaluate the role global supply chains have in supporting economic growth, creating jobs, and reducing poverty. Global industry leaders, policymakers and experts will convene to discuss forthcoming issues and explore innovative solutions.

Oman will host the Comex Technology Show from Monday, 27 May to Saturday, 30 May in Muscat. The event will see representation from industry leaders and decision makers to showcase buyer potential in innovative technology, in transportation, logistics, energy and healthcare sectors.

Egypt will host ProPak MENA from Sunday, 26 May to Tuesday, 28 May in Cairo. The conference will see F&B manufacturing industry professionals network and discover the latest equipment and logistic solutions for processing and packaging.

Check out our full calendar at the bottom of this email for a comprehensive listing of upcoming news events and news triggers.

This publication is proudly sponsored by

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Aviation

Airline expansions and eVTOL updates from Dubai

The second day of the Arabian Travel Market in Dubai supplied a basket of news from UAE airlines, and the first ever demo flight in MENA for a passenger eVTOL.

Etihad is eyeing a fleet expansion: Etihad Airways is considering purchasing a small number of aircraft from Airbus and Boeing over the next five years if delivery slots become available, in a bid to up its fleet to 150 aircraft from around 80 today, Etihad CEO Antonoaldo Neves told Reuters. The airline aims to add 10-15 new aircraft annually to meet its target, Neves added. Etihad is currently talking with lessors and plane makers to snag additional jets to supplement existing orders. The carrier looks to expand its fleet to 150 planes over the next five years.

Emirates expands refurbishment program to 191 aircraft: Emirates is expanding its multi-bn aircraft retrofit program with plans to refurbish 43 A380s and 28 Boeing 777s, bringing the total to 191 aircraft, Emirates President Tim Clark said, according to a Dubai Media Office statement. The project initially included refurbishing 120 aircraft, including 67 A380s and 53 777s. To date, Emirates has refurbished 22 A380 aircraft, with the initial Boeing 777 set for an interior update starting in July.

And the carrier has warned Boeing to “keep its promise” to deliver the 777X aircraft, Chairman and CEO Sheikh Ahmed bin Saeed Al Maktoum told Bloomberg (watch, runtime: 2:41), expressing Emirates’ dissatisfaction with the delays, which have forced the airline to upgrade and continue flying older airplanes beyond their expected lifespan. Boeing is expected to deliver the 400-seat jet by mid-next year, following a four-year delay due to certification issues.

Emirates also expanded its interline partnership with Saudi carrier flynas, connecting Emirates’ gateways in the Kingdom to destinations in the Far East, West Asia and Indian Ocean, and Europe through Dubai, Wam reports.

Flydubai will begin a phased transition to the Al Maktoum International Airport — also known as Dubai World Central — two years from now, CEO Ghaith Al Ghaith told Khaleej Times. Operations will be split between the two airports until Dubai International Airport is closed down completely, he explained.

Meanwhile, national carrier Emirates will shift its operations to the airport “in one go” by 2034, Emirates CEO and Chairman Ahmed bin Saeed Al Maktoum told Khaleej Times, emphasizing that the carrier will not split its operations throughout the transition period.

IN EVTOL NEWS-

Chinese electric air mobility company EHang has concluded the first demo flight for its pilotless eVTOL aircraft series EH216 in Abu Dhabi, according to a statement. EHang’s demonstration flight of the EH216-S — a one passenger aircraft — marked the first passenger-carrying demo flight in the UAE and Middle East. The EH216 series also includes two non-passenger aircrafts — the EH216-F for high-rise firefighting and the EH216-L for aerial logistics and cargo-carrying.

This has been in the works: EHang partnered with Wings Logistics Hub — the eVTOL-focused subsidiary of UAE investor Ethmar International Holding — moving into Abu Dhabi’s Smart and Autonomous Vehicle Industries (SAVI) Cluster to roll out its autonomous eVTOL aircraft in the UAE last December. Wing Logistics planned to purchase up to 100 units from Ehang with variants for aerial logistics, transport, and firefighting with deliveries set for 1Q 2024.

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Purchasing

How Qatar and Kuwait’s non-oil private sector fared in April

Purchasing Manager Indices (PMI) tracking non-energy sectors in Kuwait and Qatar both continued to expand in April. Both countries’ headline PMIs placed above the 50.0 threshold separating growth from contraction, with growth in Qatar and Kuwait attributed to new orders and boosted output.

Qatar’s non-energy private sector continued to signal strong improvement in business conditions in April as output, new orders, employment, and purchasing activity all grew at a faster pace than in March, according to Qatar Financial Centre’s (QFC) PMI (pdf) report for April. Qatar’s headline number tracked at 52.0 in April, up from 50.6 in March, indicating the largest uptick seen since last September.

A good month for demand + business activity: Demand for goods and services continued to boom in April, with the volume of business intake rising at the fastest pace in seven months in April. Firms attributed the gains to new customers, high quality, and competitive products. Total activity also boomed in April on the back of new projects, and drives to finish off existing workloads. The strong inflows of new work and boosted confidence saw employment rise for its 14th consecutive month amid an uptick in hiring, while purchasing activity surged at the fastest rate seen in ten months.

The latest data signaled weaker inflationary pressures with both input prices and charges falling in April. Although prices eased, the declines were marginal, the report added.

Over in Kuwait: Kuwait’s headline PMI figure also remained in growth territory, with advertising and competitive pricing driving new orders and output, albeit at softer rates, according to Kuwait’s S&P Global PMI (pdf). The headline figure dipped to 51.5 in April, down from 53.2 in March, signaling softer improvement in Kuwait’s non-oil sector at the start of 2Q. Purchasing activity and stock of inputs also increased in April, keeping up with gains in orders and output, but at slow rates.

Backlogs in April persisted due to reduced workforce and shortfalls in raw materials. Despite larger workloads, employment scaled back for the first time in eight months as companies looked to minimize costs. Lower employment numbers restricted the extent to which businesses were able to fulfill orders, S&P Global Market Intelligence Economics Director Andrew Harker said in the report. Staff costs also rose slightly in April, but the increase was marginal and less than that seen in March. With the build up of backlogs, outstanding business accumulated for its fifteenth consecutive month.

Output prices increased modestly in April, as businesses attempted to soften prices for their customers, with some turning to disc. At the same time overall input costs saw a sharp uptick on the back of increases in purchase prices, with purchase cost inflation at its highest since surveys began, if the pandemic period is not included. Surveyists pointed to advertising, machinery, stationary, and transportation as factors driving up costs.

The silver lining: Companies continued to see quicker deliveries from suppliers as vendors attempted to secure new clients by ramping up performance.

Both Qatari and Kuwaiti businesses remained optimistic about the year ahead, with Qatari respondents linking a positive forecast to marketing campaigns, business development plans, and efficiency drives. While Kuwaiti respondents' optimism dipped from March reporting, they maintained a positive outlook due to competitive pricing and marketing for the next 12 months.

Stay tuned for our coverage of Egypt and Lebanon’s reports tomorrow.

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The Macro Picture

Global economic growth stands at 2.6% in 2024

UNCTAD predicts global economic growth in 2024 to stand at 2.6%, a notch lower than the previous year’s 2.7%, with further growth deceleration expected this year, according to a recent Trade and Development report (pdf). Building on better than expected results in 2023, there are high hopes interest rate cuts will stimulate growth, but new challenges including trade disruptions, climate change, and ballooning debt to finance private consumption threaten further slowdowns in global economic growth, the report says.

Maritime shipping — the “backbone of international merchandise trade” — was dealt a double blow since last year, UNCTAD says. Houthi attacks in the Red Sea have seen major carriers reroute shipments via the Cape of Good Hope, lengthening journeys by between 12 and 20 days. At the same time, a severe drought in Panama has limited transits at the Panama Canal, and hiked up tolls by up to eight times. Disruptions at these two key global trade chokepoints have severely affected seaborne trade, which accounts for some 80% of goods traded, with freight rates rising even in regions unaffected by the disruptions on the back of ripple effects.

Historic shifts: Global merchandise trade contracted about 1% in 2023, representing the first time in at least four decades when global trade and economic growth moved in opposite directions, the report says, citing new data that is as yet unconfirmed. Growth in merchant trade is expected to remain subdued in 2024, but it should see a turnaround from contraction to growth.

Commodity prices remain above pre-pandemic levels despite declines in 2023, the report says. Energy and metal prices are about 40% higher than their pre-pandemic averages, while food commodities are 35% higher. The boost in commodity prices has had mixed effects, benefiting the trade positions of net exporters while also undermining developing countries that import such goods, particularly least developed countries.

The outlook is uncertain: Commodity prices are expected to continue to fall in 2024, but at a slower rate. Crude oil prices are expected to decline due to falling demand, with positive price pressure due to OPEC+ production cuts offset by booming production in North America, the report adds. However, the trend could see a reversal with energy prices increasing if the security situation in the Middle East deteriorates further or yields more disruptions to energy trade routes.

How our region is shaping up: “Lackluster performance” in Egypt contributed to Africa falling behind on Sustainable Development Goals, with growth in Africa forecasted at 3% in 2024 — up from 2.9% in 2023, the report said. Falling oil prices and production cuts saw KSA’s oil sector contract 8% last year, offsetting 6% growth in the country’s non-oil sector, and resulting in a 0.9% contraction in the country’s GDP in 2023. Despite the outlook remaining grim for KSA’s oil sector, growth in the non-oil sector is expected to drive 2.7% GDP growth in the Kingdom this year. Growth in Turkey’s GDP decelerated to 4.5% in 2023, with severe monetary tightening measures aimed at curbing inflation and stabilizing the TRY forecasted to see the country’s GDP growth slowing further to 3.5% in 2024, the report also said.

World merchandise trade is expected to rebound to 2.6% growth in 2024 and 3.3% growth in 2025, following a 1.2% drop in 2023, according to the World Trade Organization’s (WTO) Global Trade Outlook and Statistics April report (pdf). High energy prices and inflation in 2023 saw imports fall in North America and Europe, however imports surged in the Middle East and the Commonwealth of Independent States (CIS). Despite indications that trade will improve this year, geopolitical tensions, disruptions at the Suez Canal and the Panama Canal, and another wave of inflation risk derailing a recovery in trade, the report also said.

Speaking of the Suez Canal: Contrary to initial reports which foresaw significant economic losses due to Red Sea disruptions and the resultant fall in Suez Canal transits, more recent assessments show that impacts are less severe than initially anticipated, the report said. Several factors were cited as mitigating factors, including continued use of the Suez Canal by some vessels, relatively minor delays due to reroutes around the Cape of Good Hope, a drawdown in maritime freight rates after an initial spike at the beginning of the crisis, robust inventories that smoothed supply chain shocks, stable energy markets, and higher shipping capacity when compared to pandemic levels.

Middle East exports are expected to grow 3.5% and 2.2% in 2024 and 2025, after falling 1.6% in 2023, the WTO said. Contrary to most world regions, Middle East imports gained 9.8% in 2023. Imports in North America and Europe fell 2% and 4.7% during the same period. Middle Eastern exports are projected to grow 1.2% and 2.1% in 2024 and 2025, the report also said.

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Also on Our Radar

Tristar KSA commissions fleet and warehouse for ChampionX dangerous goods

Tristar KSA + ChampionX partner on dangerous goods (DG) warehousing and transport: Dubai-based energy logistics firm Tristar subsidiary, Tristar KSA, has commissioned a warehouse and fleet for the transport and storage of ChampionX DG products in Dammam, KSA, according to a press release. The fleet includes stainless steel tankers equipped with a new pumping system that boosts safety and sustainability, while the DG warehouse holds some 10k pallets, the statement said. 

OTHER STORIES WORTH KNOWING THIS MORNING-

  • Middle East Marine accused of serial seafarer abandonment: The International Transport Workers’ Federation (ITF) has accused Dubai’s Middle East Marine of what it calls the worst case of serial seafarer abandonment ever, involving over 100 seafarers across 18 Palau-flagged vessels in Bangladesh, India, the Maldives, and Sri Lanka since November 2022. (Splash247)
  • ASRY to do maintenance on six giant oil tankers: Bahrain’s Arab Shipbuilding and Repair Yard Company (ASRY) has won a regional tender launched by the Kuwait Oil Tanker Company (KOTC) to carry out berthing and maintenance for six oil tankers. (Statement)
  • GAFI + Credit Agricole ink agreement to bring more FDI to Egypt: Egypt’s General Authority for Freezones and Investments has inked an agreement with Credit Agricole to promote and attract foreign direct investments into Egypt through leveraging the bank’s extensive network of investors across 46 countries. The bank will also facilitate communication between the clients and GAFI. (Statement)
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Around the World

Updates from DHL, Hapag-Lloyd, Ocean Network Express, and Amazon

DHL reported a 18.4% decrease in net income to EUR 743 mn in 1Q 2024, while revenues generated for the same period were EUR 20.3 bn, according to a statement (pdf). Although a broad and dynamic economic upturn did not materialize in 1Q 2024, DHL anticipates more positive global economic momentum in 2Q 2024, with an anticipated forecast of EUR 6 bn to 6.6 bn in EBIT, according to a press release. “The demand for omnishoring and e-commerce solutions remains high and our customers are becoming increasingly aware of sustainable logistics,” CEO DHL Group Tobias Meyer said in the statement. “With our portfolio, we are ideally positioned to benefit from an upturn in global trade. Despite all the challenges, 2024 is a year of opportunities.”

Hapag-Lloyd + Ikea partner on clean shipping: Shipping giant Hapag-Lloyd and mutli-national furniture conglomerate Ikea’s Supply Chain Operations are partnering to decarbonize container shipments from Asia, according to a statement. The partnership will utilize Hapag-Lloyd’s highest waste-and residue-based biofuels product option, dubbed Ship Green 100, instead of conventional fuel oil. The pair seek to reduce carbon dioxide emissions for Ikea shipments by around 100k tonnes. The move aligns with Ikea’s target to cut GHG emissions from their product transportation by 70% by 2030.

Ocean Network Express (ONE) aims to slash CO2 per ton-mile by 70% by 2030 compared to 2008 levels, Global CEO Jeremy Nixon told CNBC (watch, runtime 3:51). ONE is transitioning to green fuels starting 2027 to reduce its carbon footprint and is looking to reach net zero by 2050. This shift involves investing in new ship systems, designs, and engines. New vessels will use green methanol or biogas and are poised to use green ammonia in the long term, Nixon added.

Amazon Web Services (AWS) is set to invest some USD 9 bn in Singapore over the next five years to boost its cloud computing capabilities, CNBC reports. The investment is set to bolster cloud infrastructure and services in the Asia-Pacific region, the outlet says, citing senior minister of state at Singapore’s Communications and Information Ministry Tan Kiat How. “Starting with our investment in Singapore in 2010, AWS has continued to strengthen their commitment to the ASEAN region, sharing the uplift [in] digital skills across the nations, providing secure and resilient infrastructure consistently across the region,” Country Manager of AWS Singapore Priscilla Chong said.


MAY

6-9 May (Monday-Thursday): Saudi Smart Logistics, Riyadh, Saudi Arabia.

7-9 May (Tuesday-Thursday): Annual Investment Meeting (AIM) Congress, Abu Dhabi, UAE.

7-10 May (Tuesday-Friday): MiPharma Global Conference, Abu Dhabi, UAE.

14-15 May (Tuesday-Wednesday): Seamless Middle East, Dubai, UAE.

14-16 May (Tuesday-Thursday): The Airport Show, Dubai, UAE.

18-21 May (Saturday-Tuesday): Exhibition of Rail Transportation and Related Industries, Tehran, Iran.

20-22 May (Monday-Wednesday): The Electric Vehicle Innovation Summit, Abu Dhabi, UAE.

21-23 May (Tuesday-Thursday): WAGA 2024, Riyadh, Saudi Arabia.

21-24 May (Tuesday-Friday): Global Supply Chain Forum, Bridgetown, Barbados.

26-28 May (Sunday-Tuesday): ProPak Mena 2024, Cairo, Egypt.

27-30 May (Monday-Saturday): Comex Technology Show, Muscat, Oman.

JUNE

2-4 June (Sunday-Tuesday): IATA Annual General Meeting (AGM) and World Air Transport Summit, Dubai, UAE.

19-21 June (Wednesday-Friday): World Freezones Organization’s Annual International Conference and Exhibition, Bari, Italy.

27 June (Thursday): East Med Maritime Conference, Beirut, Lebanon.

29 June (Saturday): The Investment Conference in cooperation with the European Union, Brussels.

OCTOBER

6-8 October (Sunday-Tuesday): Routes World 2024, Bahrain.

8-10 October (Tuesday-Thursday): The Global Rail Transport Infrastructure Exhibition and Conference(Global Rail), Abu Dhabi.

7-9 October (Monday-Wednesday): AFSIC – Investing in Africa, London, UK.

8-10 October (Tuesday-Thursday): AntwerpXL Expo, Antwerp.

22-24 October (Tuesday-Thursday): Asean Ports and Logistics, Johor, Malaysia.

NOVEMBER

11-14 November (Sunday-Thursday): ADIPEC Maritime and Logistics Exhibition and Conference, Abu Dhabi.

13-15 November (Wednesday-Friday): The Bahrain International Airshow, Sakhir Airbase, Bahrain.

18-20 November (Monday-Wednesday): The Heavy Equipment and Truck (HEAT) Show, Dhahran Expo, Damman, Saudi Arabia.

DECEMBER

10-12 December (Tuesday-Thursday): Middle East Business Aviation, Dubai, UAE.

20 December (Wednesday): The Iran-Senegal Joint Economic Cooperation Commission, Dakar, Senegal.

EVENTS WITH NO SET DATE

1Q 2024: Construction of phase 3 of Agility’s logistic park in Abidjan, Côte d'Ivoire to be completed.

1Q 2024: Egypt’s Transport Ministry to launch pre-qualification tender for Cairo-Alex freight railway.

1H 2024: Civil Construction subcontracts for construction firms in Oman for implementation of the Abu Dhabi - Suhar rail link to be announced.

2H 2024: Bahri’s barges for Saline Water Conversion Corporation (SWCC) to begin initial and commercial operation.

King Salman Energy Park is set to become operational.

The Cross-Border Digital Trade Forum, Dubai.

2025

Mid-2025: Iraq will complete phase one of the construction of the Grand Faw Port.

DHL and Aramco’s logistics and procurement hub in Saudi Arabia will commence operations.

AD Ports-operated Safaga Port’s multi-purpose terminal will become operational.

Phase 3 of APM Terminals Tangier MedPort to be complete and operational.

1Q 2025: Sadr Park’s Logistics Center in Riyadh to be completed.

1Q 2025: Phase twoof Jafza Logistics Park to be completed.

2027

4Q 2027: Oman’s Musandam Airport construction to be completed.

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