90b gcc airport projects take off
Last Updated : GMT 18:26:54
Arab Today, arab today
Arab Today, arab today

$90b GCC airport projects take off

Arab Today, arab today

Arab Today, arab today $90b GCC airport projects take off

DUBAI - Arabstoday

Aiming to become a major global aviation hub, the Gulf Cooperation Council (GCC) countries have allocated an estimated $90 billion (Dh330.5 billion) for airport development over the next few years. Gulf airports account for a huge chunk of the amounts earmarked for the development of 1,200 airports and military air bases worldwide in addition to the new ones coming up. The allocated investment for the development of Dubai World Central-Al Maktoum International (DWC) alone, for instance, is about $10 billion, and the total investment for Abu Dhabi International Airport midfield is expected to touch $6.8 billion. Dubai International's Concourse 3, meanwhile, is expected to attract nearly $1.17 billion in investments. Other big airport developments in the region include Qatar's new Doha International Airport drawing a massive investment of around $11 billion; King Abdulaziz International Airport (KAIA) Development Phase 1 in Jeddah with an investment equivalent to $1.5 billion; expansion of Muscat International Airport estimated at $1.2 billion; approximately $2.1 billion in Kuwait International Airport; and $335 million in Bahrain airport. Statistics from the Airports Council International (ACI) and the International Air Transportation Association (IATA) support the numbers as the global aviation bodies predict airports in the Middle East will handle over 400 million passengers by 2020. Not justifiable Global passenger numbers are expected to touch around 10 billion by 2025, according to industry estimates. Industry experts, on the contrary, do not think the large scale of investment in airport projects in the GCC is justifiable. According to the Aerospace and Defence Practice at Frost & Sullivan, the huge investment in airport development projects over the next 30 years is "not justified" as the leading airport hubs will provide a combined capacity of 460 million passengers per annum. "This is against the long term growth forecast which says the Middle East region as a whole will need capacity for 600-700 million passengers per annum within the next 20 years. Thus, this will make demand override supply," an aerospace and defence analyst at Frost & Sullivan, told Gulf News. He added that aeronautical revenues constitute 70 per cent of the Middle East airport revenues. "The governments in the region are looking forward to adopting the build, operate and transfer (BOT) model to ensure the international standards of airports," the analyst pointed out. "Construction holds a significant potential in the airport infrastructure development with 57 per cent of the investment going towards construction activities." Commenting on future growth opportunities, the Frost & Sullivan analyst said that these infrastructure projects will "provide opportunities for specialised companies" looking forward to investing in a business with new opportunities and growth prospects. Once completed, DWC-Al Maktoum International will be able to handle 160 million passengers a year, making it one of the world's largest airports. Having begun operations last year with cargo flights, the airport located in Jebel Ali is now gearing up to launch commercial passenger services next year. Meanwhile, Dubai International Airport's $1.17 billion Concourse 3, designed specifically to accommodate the superjumbo A380, is scheduled to open in 2012. According to Dubai Airports, Dubai International will grow to become the world's busiest airport for international passenger traffic by 2015. Also, by 2020 passenger numbers at Dubai International are slated to reach 98.5 million and cargo volumes will top 4.1 million tonnes. Slated to be the region's future aviation hub, the New Doha International Airport is getting impetus from Qatar Airways. The 2,200-hectare airport site is forecast for maximum development from 2015 onwards, with the airport project to be implemented in phases. Replacing the current airport in Doha, the first phase of the new airport is scheduled to come online next year. The airport will be built to handle an initial capacity of 24 million passengers a year, which is expected to increase by the time it goes fully operational beyond 2015. The new airport will incorporate a total of 41 wide body aircraft contact gates, together with over 40,000 square metres of space devoted to retail facilities, passenger lounges, and parking. Saudi Arabia is investing heavily in modernising two of its airports — King Abdulaziz International Airport (KAIA) Development Phase 1 in Jeddah with an investment equivalent to $1.5 billion; and $1.5 billion Medina Airport project. Traffic at Saudi airports has reached 30 million passengers annually. Aircraft orders to drive growth The growth in airport infrastructure is being backed by the large number of aircraft orders the region's carriers have at present. According to the latest forecasts by the International Air Transport Association (IATA) for 2011, Middle East airlines are expected to achieve the fastest growth rate of 9.4 per cent. The region's international freight demand is also expected to grow 8.1 per cent during the year as freight links to and via the region continue to develop, with the UAE leading the region. Paris Air Show Leading this growth is the Middle East's largest carrier, Emirates, which reportedly plans to have a total of 235 aircraft by 2017, adding 87 aircraft to its current fleet. The carrier has a total of 193 aircraft due for delivery at present. Qatar Airways, meanwhile, expects to have 120 aircraft in its fleet flying to 120 destinations by 2013. The Doha-based carrier is the largest customer for the Airbus A350XWB (extra-wide body) with 80 on order besides the 60 Dreamliners — Boeing 787s and five Airbus A380s — with more orders expected to be announced next month at the Paris Air Show. Etihad Airways currently has 100 aircraft on order, including 10 Airbus A380s. With its hub at Abu Dhabi International Airport, the carrier serves 67 cities in the Middle East, Africa, Europe, Asia, Australia and North America, with a fleet of 57 Airbus and Boeing aircraft. Equity participation "Airlines [can benefit] from the airport development project with their participation in airport management or direct equity participation in exchange of reciprocatory benefits through concessions in landing and parking charges," said a aerospace and defence analyst at Frost & Sullivan. Saj Ahmad, a UK-based aerospace and aviation analyst with FBE Aerospace, said: "Overall, airport development gives airlines more choice and by extension, customers more choice. That in and of itself leans towards added incentives to fly into less congested regions and exploit the growth potential — the precise reason why these airports have been designed and built."

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