Middle East witnessing massive airport developments to meet future demands
Keen on building a strong and sustainable future for their airports, the Middle East countries in general and Arabian Gulf states in particular are pumping in billions of dollars in the race to building new airports or expanding the existing facilities to meet the demands of future air travelers and expanding fleets of airlines, especially their national carriers
The airport infrastructure investments and associated challenges will come up under spotlight at the 14th edition of Airport Show, the world’s leading B2B airport industry event, from May 11 to 13th, which will also see the staging of the second edition of Global Airport Leaders’ Forum (GALF) and Travel Catering Expo (TCE) on its sidelines.
Angela Gittens, Director General of Airports Council International (ACI), the global body for airports, said: “Simply put, airports are capital intensive businesses highly dependent on economies of scale. Even in a downturn airports have to invest to provide capacity for the future. The future is going to be challenging of course for airports. The aviation sector is definitely going to grow. There will be winners and losers but growth is inevitable.”
Daniyal Qureshi, Director of Airport Show and GALF, said: “Airports expansion is a major area of focus for the aviation industry in almost every part of the world, especially the Middle East. Everyone now realizes the importance of investment in airports keeping in mind the massive surge expected in air travelers in the coming decade.”
A study by the Centre for Asia Pacific Aviation (CAPA) has revealed that the spending on airport construction projects globally is worth over US$385 billion. It said the Middle East is also undertaking major investment, notably in the Arabian Gulf airports, as the world-changing operations of its main airlines continue to expand rapidly.
International Air Transport Association (IATA) said the Middle East continues to be a great success story in the aviation industry. It noted that “about $40 billion are being invested in airport infrastructure in the Arabian Gulf alone by far-sighted” governments. It forecasts that by the year 2017 the total passenger numbers are expected to rise to 3.91 billion. The Middle East region will see the strongest international passenger growth with CAGR of 6.3 per cent.
Due to overtake London Heathrow as the world’s top airport for international passengers in 2015, Dubai is executing $34 billion Dubai World Central (DWC) project which involves construction of five runways and capacity to handle 160 million passengers a year. In November last year, Dubai opened the passenger terminal of its second international airport, Al Maktoum International. Dubai is expected to invest over US$8.1 billion in new infrastructure to host Expo 2020. Dubai Airports has been “preparing” itself to double the emirate’s passenger handling capacity to 200 million passengers a year by 2045, up from the current target of 100 million a year by 2020. A fourth concourse is under construction, after the opening of the Airbus A380-dedicated Concourse A brought the capacity of the world’s second busiest international airport to up to 75 million. Dubai Airports is undergoing an AED28.8 billion expansion programme.
Abu Dhabi will have a new airport terminal complex commissioned by 2017. The 700,000 square metre terminal building is one of the key strategic infrastructure projects to be undertaken in the UAE capital, and will initially handle 27 million passengers per year. It will be the future home of Abu Dhabi's Etihad Airways.
Sharjah Airport is waiting to complete its 2030 master plan. Much of Sharjah’s growth over the past decade has been fuelled by the Gulf’s first low-cost carrier, Air Arabia. Sharjah International reportedly handled 7.5 million passengers in 2012, a 13.6 per cent year-on-year jump from the previous year. Sharjah International will review its expansion every five years until 2030 and measure its response to growth.
The Sultanate of Oman has earmarked $6.1 billion over five years for aviation projects, which includes major terminal developments at Muscat and Salalah international airports, and completion of four new regional airports at Sohar, Ras al Hadd, Duqm and Adam. While eight per cent of the $6.1 billion is earmarked for the completion of the four regional airports, 92 per cent is allocated for the two primary airports in Muscat and Salalah.
The new Muscat International Airport is expected to see the full operations by the end of 2014. Currently the airport handles eight million passengers per year with an average growth of 16 per cent. The new Muscat airport is designed to handle 12 million passengers and it can be easily extended to up to 48 million passengers when the need arises. Similarly, Salalah Airport has seen significant increases in annual traffic over the past decade, reaching 700,000 passengers mark in 2013. The completion of four new regional airports in Sohar, Al Duqm, Ras al Hadd, and Adam will add the capacity to handle almost two million passengers each year.
Tony Tyler, IATA’s Director General and CEO, said: “The Middle East will deliver the strongest growth over the forecast period is not surprising. Governments here recognizes the value of the connectivity provided by aviation to drive global trade and development.”
In a report, PwC, the world’s leading consultancy company, said the propensity to fly is affected by a lot of different, interrelated forces – economic health of a country, demographic changes, market maturity, geographical features and competition. It observed: Airports are a unique class of asset. They offer greater potential for growth than more traditional infrastructure assets. Unlike more traditional infrastructure assets, airports serve airlines as their primary clients and therefore share in the fortunes and woes of a highly cyclical industry.
Over 250 leading global companies will be showcasing an impressive portfolio of products, solutions and services to the regional airport industry players at the Airport Show and GALF which will have an anticipated combined attendance of 7,000 attendees, 100 hosted buyers and over 100 regional aviation authorities.
The 14th edition of the Airport Show will be held Dubai International Convention and Exhibition Centre under the patronage of His Highness Sheikh Ahmed bin Saeed Al Maktoum, President of Dubai Civil Aviation Authority (DCAA), Chairman of Dubai Airports and Chairman and Chief Executive of Emirates Airline and Group, and with the support of DCAA, Dubai Airports and Dubai Aviation Engineering Projects (DAEP) among others.