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Monday, June 6, 2011

Massive airport projects underscore growth in Middle East aviation sector

With aviation being a key driver of economic growth in the Middle East, countries throughout the region are spending billions of dollars to expand their airports in an effort to ensure these facilities have the capacity to meet the future needs of the rapidly expanding sector.

  • Dubai International Airport is set to become the world's busiest for passenger traffic by 2015
    Dubai International Airport is set to become the world's busiest for passenger traffic by 2015

One of the keys to the growth of the Middle East over the past decade has been the rapid expansion of its aviation sector. Geography has played a key role, as Dubai, Abu Dhabi and Doha have aimed to position themselves as global aviation hubs.

Emirates Airline and Etihad Airways, the flag carriers of Dubai and Abu Dhabi respectively, have led the way with whopping orders for aircraft. Emirates, the world's largest airline by international capacity, plans to take delivery of two jets a month for the next six years as per an order book worth $66bn.

Abu Dhabi-based Etihad has also grown significantly since its launch eight years ago, now operating close to 1,000 flights per week, serving an international network of 67 destinations in 45 countries. Meanwhile, Qatar Airways, which recently announced its 100th destination, already has a fleet of 95 aircraft and 182 additional on order.

With these airlines leading the way, Middle East carriers have grown from 5% of global traffic to 11% over the past decade, and are expected to achieve the fastest growth rate this year at 9.4%.

Middle East airport investment to hit $90bn

This growth has stimulated a continued flow of investments for the development and expansion of airport projects in the region, which is estimated to be around $90bn over the next few years, according to Khaled Almazroui, general manager of Fujairah International Airport.

"Despite a worldwide slump, the aviation industry in the Middle East region continues to gain momentum and emerge as the new global centre for aviation industry," he said.

One of the largest projects in the region is the $10bn Dubai World Central-Al Maktoum International, which will be able to handle 160 million passengers a year once completed. Having begun operations last year with cargo flights, the airport is planning to launch commercial passenger services next year.

The new airport is the centrepiece of the $33 billion Dubai World Central master development, which is aimed at establishing Dubai as one of the world's key centres for trade, logistics and commerce.

Meanwhile, Dubai International Airport's $1.17bn Concourse 3, designed specifically to accommodate the superjumbo A380, is scheduled to open in 2012. Dubai International is forecast to become the world's busiest airport for international passenger traffic by 2015, and by 2020, passenger numbers at the airport are expected to reach 98.5 million.

In neighbouring Qatar, New Doha International Airport is due to be officially opened in February 2012, two years behind the original schedule. The carrier said rapid growth in traffic to and from Doha prompted it to decide that rather than open the first phase of the terminal in 2009, it would jump ahead to the second phase of the project and provide capacity for 24 million passengers a year. The cost of the airport is forecast to be $11bn.

Another major project in the region is the expansion of King Abdulaziz International Airport in Jeddah. Already the largest airport in the kingdom, King Abdulaziz is undergoing an overhaul that will more than treble capacity from 20 million to up to 80 million passengers by the final stage in 2035, according to Mohamed A Abed, director general of the airport. He said the first phase, which will be completed in three years, will cost $2.5bn, while the total budget will top out at about $7bn.

Success of national carrier is key

As these expansions continue to boost capacity in the region, Middle East airports are forecast to handle over 400 million passengers by 2020, according to the International Air Transport Association. However, despite all the efforts that Gulf airports are making to upgrade their capacity and efficiency, their success or failure depends largely on the performance of their country's national carrier.

"Airports in the region cannot be a success unless their national carrier is a success," said Mohamed Thamir, vice president airport operations, Bahrain Airport Company. "And that is what we are trying to do with Gulf Air in Bahrain. We are working hand in hand with them in a partnership, because their success is basically our success.

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