The Middle East airports are expected to invest $86 billion (Dh315.62bn) in expansion plans, according to new study by market research company Frost and Sullivan.

This is estimated to double after 2025, with major airports in the region turning into global hubs.

The report comes as Dubai International Airport announced a double-digit increase for both passenger and freight traffic during November, compared to the same period last year.

The Frost and Sullivan report attributes this emerging dominance to the A380 order backlog of 50 per cent of global deliveries, which, it states, will drive the aviation industry as a whole in the Middle East.

"The emergence of the Middle East as a global hub in the future is attributed to the expansion of the 12 major airports across the region that constitute more than 90 per cent of the total investment of $86bn in the region," said Frost and Sullivan Research Analyst Gautam Ratan Kanal. "The economic slowdown will not impact the region's commercial aviation industry, and airport development activities will persist despite the slowdown as most expansion activities are funded by governments here."

Growth in traffic

According to a statement released by the International Civil Aviation Organisation (ICAO), total passenger traffic fell in all regions except the Middle East, which posted 10 per cent growth. All other regions recorded negative growth, with Africa hardest hit at minus 9.6 per cent overall, the ICAO said.

At Dubai International, passenger traffic rose 12.6 per cent in November, marking the sixth consecutive month of double-digit growth. The airport handled more than 3.5 million passengers in November 2009 compared to a little more than 3.1 million passengers during the same month last year.

Furthermore, the first 11 months of 2009 saw more than 37 million passengers travel through Dubai International, up 8.5 per cent from the same period last year.

Meanwhile, cargo recorded the second consecutive month of double-digit increases in freight traffic with volumes surging 19.6 per cent during November. Dubai Airports Cargo handled 191,897 tonnes of freight in November compared to 160,488 tonnes during the same month last year. Year-to-date cargo volumes reached 1.74 million tonnes, up 3.9 per cent from the same period last year.

Dubai's traffic upsurge contrasted with the global situation. The International Air Transport Association's most recent traffic data shows that 2009 global international passenger traffic year to date is down 4.7 per cent while cargo is off 14.9 per cent. The Frost and Sullivan report reveals that passenger traffic, cargo traffic and aircraft movement across major airports in the region is expected to grow at a compound annual growth rate of 8.7, 8.5 and 4.8 per cent respectively, from 2008 to 2015. The Middle East is projected to be the only region that will witness an increase in traffic as a result of the growing demand for air travel in the region.

Paul Griffiths, CEO of Dubai Airports, lent weight to this trend, saying: "We are bullish about our future prospects and expect to hit record levels of traffic this year with 40.6 million passengers and again next year with more than 46 million."

The Frost and Sullivan report also highlighted that despite handling a majority of the traffic, the region's airports did not have the capacity to cater to the growing numbers, calling for large-scale expansion.

Dubai International is already poised for an aggressive expansion, with Griffiths saying: "In the long term, we expect to crack the 100 million passenger mark before the end of the next decade so investment in the infrastructure to support this growth will continue. This includes plans for building Concourse 3 the world's first dedicated A380 facility and Dubai World Central-Al Maktoum International."

Industry welfare

With 57 per cent of investments being allocated for construction and terminal expansion, according to Frost and Sullivan, the region is anticipated to offer significant potential for private infrastructural investors.

"It is vital for governments to identify their limitations and act for the welfare of the industry and the region," said Frost and Sullivan's Kanal. "The lack of technically skilled labour, labour costs and scarcity of land can hamper market growth."

 

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