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IATA to Asharq Al-Awsat: We Will Open Regional Headquarters in Riyadh Soon

People attend the Future Aviation Forum in the Saudi capital Riyadh on May 20, 2024. (AFP)
People attend the Future Aviation Forum in the Saudi capital Riyadh on May 20, 2024. (AFP)
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IATA to Asharq Al-Awsat: We Will Open Regional Headquarters in Riyadh Soon

People attend the Future Aviation Forum in the Saudi capital Riyadh on May 20, 2024. (AFP)
People attend the Future Aviation Forum in the Saudi capital Riyadh on May 20, 2024. (AFP)

Kamil Al-Awadhi, Vice President of Africa and Middle East at International Air Transport Association (IATA), revealed that the association intends to open a regional headquarters in Riyadh to keep pace with the Kingdom’s “exceptional” transformation in the aviation sector.

The International Air Transport Association (IATA) was founded in 1945 and is headquartered in Canada. The association aims to represent the aviation industry, develop commercial standards, and assist airlines by simplifying operations and increasing passenger comfort, while reducing costs and improving efficiency.

Speaking to Asharq Al-Awsat on the sidelines of the Future Aviation Forum 2024, Al-Awadhi said IATA expects air traffic and the number of passengers in the Middle East region to increase this year by around 4 to 6 percent, compared to 2023.

Previous data issued by IATA revealed that airlines in the Middle East achieved the strongest performance in January 2024 by 29.5 percent - with an increase of 25.9 percent year-on-year in freight volumes, as a result of growth in the Middle East and Asian markets - and Middle East and Europe by 46 percent.

Al-Awadhi pointed to challenges facing the aviation sector in the Middle East, which include geopolitical developments, underlining the importance of cooperation among the civil aviation authorities in Gulf countries to guarantee the safety of passengers and aircraft and avoid the cancellation of flights.

The Future Aviation Forum is being held in Riyadh under the patronage of Custodian of the Two Holy Mosques King Salman bin Abdulaziz and concludes on Thursday.

Organized by the General Authority of Civil Aviation (GACA), the event is attended by more than 30 ministers, 77 presidents of civil aviation authorities and heads of airlines from around the world, as well as 5,000 aviation industry experts and stakeholders from more than 120 countries.

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US Borrowing Binge Risks Market Strains

The increase in the deficit has long alarmed fiscal hawks - (File/AFP)
The increase in the deficit has long alarmed fiscal hawks - (File/AFP)
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US Borrowing Binge Risks Market Strains

The increase in the deficit has long alarmed fiscal hawks - (File/AFP)
The increase in the deficit has long alarmed fiscal hawks - (File/AFP)

The US will be forced to fund a massive increase in its budget deficit with short-term debt, analysts have said, with consequences for money markets and the battle against inflation, according to The Financial Times.

The Congressional Budget Office, the independent fiscal watchdog, this week said aid packages for Ukraine and Israel would help push up the US deficit this fiscal year to $1.9tn — compared with its February prediction of $1.5tn. “We are spending money as a country like a drunken sailor on shore for the weekend,” said Ajay Rajadhyaksha, global chair of research at Barclays.

The increase in the deficit has long alarmed fiscal hawks, who warn the US’s lack of discipline will inevitably push up borrowing costs and that neither President Joe Biden nor his Republican challenger Donald Trump have substantive plans to shore up the country’s finances. The more recent shift to short-term financing may also disrupt money markets and complicate the anti-inflation drive of the US Federal Reserve.

Some of the expected increase in the deficit is because of student loan forgiveness, which is not expected to have an immediate effect on cash flows. But Jay Barry, co-head of interest rate strategy at JPMorgan, said the expanded deficit would require the US to issue an additional $150bn of debt in the three months before the fiscal year ends in September.

He added he expected most of the funds to be raised through Treasury bills, short-term debt instruments whose maturity ranges from one day to a year. Such a move would increase the total outstanding stock of Treasury bills — unredeemed short-term US debt — from $5.7tn at the end of 2023 to an all-time high of $6.2tn by the end of this year.

“It is likely that the share of Treasury bills as a share of total debt increases, which opens up the question of who is going to buy them,” said Torsten Slok, chief economist at Apollo. “This absolutely could strain funding markets.”

The size of the Treasury market has quintupled since the financial crisis, in an indication of how much the US has turned to debt financing over the past 15 years.

As the deficit has risen, the US Treasury has found it increasingly hard to finance via long-term debt without causing an uncomfortable rise in borrowing costs. It has boosted the share of short-term debt it issues — but analysts warned it risks hitting the limits of demand.