x Abu Dhabi, UAESunday 21 January 2018

Big airport expansion for Dubai

Dubai Airports plans a $7.8 billion expansion of Dubai International Airport as it aims to increase capacity to 90 million by 2018.

Dubai International's Airport's capacity is expected to increase from 60 million passengers to 90 million by 2018. WAM
Dubai International's Airport's capacity is expected to increase from 60 million passengers to 90 million by 2018. WAM

Dubai yesterday earmarked close to US$8 billion (Dh29.38bn) for a major expansion of the emirate's main airport as it aims to overtake Hong Kong, London and Paris to become the world's busiest international hub by 2015.

The new facilities to be built in the expansion will include a fourth concourse by Terminal 1 and the expansion of Terminal 2, said Dubai Airports, the company that operates the hub, as it outlined a strategic plan for the next decade.

Dubai International Airport's capacity is expected to increase from 60 million passengers to 90 million by 2018, according to the plans.

"We are going to be spending a lot of time, money, effort maximising the use of Dubai International," said Paul Griffiths, the chief executive of Dubai Airports.

Mr Griffiths said he hoped increased profits generated at the expanded facilities, to cost $7.8bn, would be used to fund the development of the Dubai World Central airport in Jebel Ali. "We simply cannot build Dubai World Central fast enough to keep up with the growth of our airlines, particularly Emirates and flydubai," he said.

Dubai Airports said 83 per cent of its income was expected to come from commercial sources, including retail, duty free, food and beverages, by 2020, rather than aeronautical fees. "We see most of the growth coming from those commercial sources in the future," said Mr Griffiths. "What we plan to do is keep our aeronautical fees within the current rate of inflation, so you won't see airport fees going up in real terms."

Dubai Airports said it would focus on the second phase of Dubai World Central airport in 2020, when construction had been completed on Dubai International. The new airport is intended to eventually become home to Emirates Airline's operations and is planned to be able to handle 160 million passengers. "We will be opening elements of the passenger terminal at some stage next year," said Mr Griffiths. "Hopefully" it would be open to general aviation by next year, he said. Mr Griffiths said he did not see a need for a fast metro link between the two airports.

The aviation sector in Dubai is expected to help generate 373,000 jobs and a contribution to the economy of $45.4bn by 2020, equivalent to 22 per cent of Dubai's employment and 32 per cent of its GDP, according to a study by Oxford Economics. The same study found that the aviation sector currently supports more that 250,000 jobs, about 19 per cent of employment in Dubai, accounting for about $22bn, or 28 per cent, of Dubai's GDP.

"We are currently out to tender to extend Terminal 2," said Mr Griffiths, speaking about the expansion of Dubai International. "That will be operational by 2013." This would help the low-cost carrier flydubai to expand its operations, he said.

The fourth concourse is planned to be located in front of the Cargo Village and will be connected to Terminal 1 by an "automated people mover". "The idea is [it] will give access to other airlines to give them a quality product, and will allow Emirates to expand to fill all of concourses, 1, 2, and 3," said Mr Griffiths.

The Airport Expo venue will no longer be operational by the end of the year, as it makes way for aircraft stands and cargo facilities.

With the addition of Concourse 3 near Terminal 3 expected to open next year, capacity will increase to 75 million passengers. This will be "the largest … A380 specific terminal infrastructure in the world", said Mr Griffiths. Many of the gates will have double flight boarding, allowing business-class and first-class passengers direct access to the upper level of the aircraft.

"We're currently the fourth-busiest international airport for international passenger traffic, but we're very hot on the heels of Hong Kong, so we may end up at number three by the end of this year," said Mr Griffiths. "If our growth continues and the rest of the world growth continues at its current levels, we fully expect by the middle of this decade to be eying the number one spot in terms of international passenger traffic."

The growing economies of India and China are expected to help bring more passengers into Dubai.

Airport charges in the emirate were low by global and regional standards, Mr Griffiths said. "If you compare us to Amsterdam, our airport charges are less than 50 per cent of the total fees you pay, because of course a large part of the airport fees, particularly in Europe, are government taxes and of course we don't have any of that."

Dubai International Airport serves as a hub for many big airlines that have a global presence and bring traffic to Dubai, said analysts at the consultancy Frost & Sullivan. They warned that rising oil prices could force airlines to increase air fares and cut routes.