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23 April 2024

Dh28.8bn airport expansion helps UAE aviation sector soar

By Parag Deulgaonkar

On January 2, Dubai became the first city in the world to have an exclusive A380 facility with the Dubai Airports announcing opening of four of the 20 contact gates at Concourse A at Dubai International's Terminal 3.

In a month’s time, the 16 remaining gates also became operational thus giving Emirates, which has a current fleet of 31 A380s and a further 59 on order, a world-class facility.

The significant milestone achieved was part of the vision of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, which aims to build and invest in a state-of-the art aviation infrastructure.

Sheikh Ahmed Bin Saeed Al Maktoum, President of the Dubai Civil Aviation Authority, Chairman of Dubai Airports, and Chairman and Chief Executive of Emirates airline & Group, had stated earlier that aviation has established itself as a vital contributor to the UAE’s economy, contributing more than Dh145 billion ($39.47b) or 14.7 per cent to the national gross domestic product.

“This contribution is projected to grow further in the coming years and as such justifies the country’s huge investment in airports and airline networks. Aviation and logistics have had a major impact on other economic sectors such as tourism, hospitality, trade and finance, and activity in one spurs growth in the others.”

For its bid to host the 2020 World Expo in Dubai, the UAE has selected the theme “Connecting Minds, Creating the Future"

The investment in building the aviation infrastructure is part of the UAE’s effort to host the World Expo 2020 that will draw 25 million visitors to the country.

A delegation representing the Bureau International des Expositions, the inter-governmental organisation based in Paris that is responsible for World Expo, is in the country on a four-day enquiry mission to assess the UAE’s ability to host the expo.

Commenting on why should Dubai be chosen to host World Expo 2020, Paul Griffiths, CEO, Dubai Airports, says: “If one of the key attributes of a successful Expo is measured in the diversity and volume of international visitors, then the UAE already has the world-class infrastructure to support that, and to make it successful.

“It would be a first for the Middle East, Africa and South Asia, and would mean an opportunity for some of the world’s fastest-growing emerging markets to participate.”

In 2010, Sultan Al Mansouri, the Minster of Economy, had said companies and state agencies would invest Dh500 billion in the UAE aviation industry over the next decade to make the country a global transport hub,

Dubai Airports has already announced a Dh28.8bn ($7.8bn) airport and airspace expansion programme, which will boost capacity at Dubai International from 60 million to 90 million passengers per year by 2018.

Designed to deliver aviation infrastructure, which will support the continuation of the sector’s impressive growth, facilitate Dubai’s economic expansion and generate an estimated 22 per cent of total employment and 32 per cent of the emirate’s GDP by 2020.

The Strategic Plan 2020 responds to a ten-year traffic forecast for Dubai International and Dubai World Central that projects international passenger and cargo traffic will increase at an average annual growth rate of 7.2 per cent and 6.7 per cent respectively.

Asked what role will Dubai World Central play in Dubai Expo 2020 plans, Griffith adds: “Dubai World Central will provide additional capacity to help accommodate the anticipated boost in traffic that would result from a successful bid. Once fully developed, it will be an airport with five runways and the ability to handle 160 million passengers per annum and 12 million tonnes of freight.

“This capacity will be needed to support the UAE’s rapidly growing role as the region’s trade and logistics hub. The UAE is the world’s third largest re-export market, exerting a strong influence on global trade flows and acting as a gateway to an international business community.”

Dubai a global hub

The City of London Corporation has said that Dubai is challenging London’s dominant position as a global hub to emerging and high growth markets.

The report, published by the corporation in December 012, said though London has the best aviation links to 22 key countries whose economies are predicted to boom in coming years, but it’s status as a global hub is being challenged by rapidly expanding Middle East hubs such as Dubai and especially towards non-European destinations.

According to Dubai Airports, the number of stands will be increased by 60 per cent from 144 to 230, while cargo growth will almost double from 2.2 million tonnes in 2010 to 4.1 million tonnes by 2020.

The Strategic Plan involves the construction of additional terminal space and concourse areas comprising an extra 675,000sqm of floor space – twice the footprint of London Heathrow Terminal 5.

Passenger traffic surged 13.2 per cent to 57,684,550 in 2012, up from 50,977,960 passengers recorded during 2011. The 2012 passenger traffic also exceeded Dubai Airports’ forecast at the start of the year of 56.5-million by more than one million passengers.

The annual passenger traffic in 2011 reached 50.98 million, a year-on-year increase of 8 per cent compared to 47.2 million recorded in 2010. Passenger numbers are projected to reach 56.5 million in 2012 and 98 million by 2020.

Following the opening of Concourse A in January 2013, the collective capacity of terminal 1, 2, and 3 has increased from 60 million to 75 million passengers per annum.

Abu Dhabi upgrading its airport

Over 14.7 million passengers passed through the Abu Dhabi International Airport last year recording a significant growth of 18.9 per cent in passenger traffic compared to 2011.

During 2012, the airport greeted 14,700,420 passengers, marking a record number for the Capital. Gateway cargo traffic also increased, recording 567,965 tonnes, and representing an increase of 17.9 per cent, in comparison to 2011, Abu Dhabi Airports Company (Adac), the operator of the Airport, said.

Adac has announced investments of Dh24.8 billion to improve the Abu Dhabi airport and the capacity to 40 million passengers a year from the current seven million.

Cargo handling capacity will also increase to 2.5 million tonnes a year. The most expensive element of the project is the Dh25 billion Midfield Terminal, to be ready in 2015-2016.