Dubai airport plan takes to the sky



Beyond Brics (Simeon Kerr): Don’t let Dubai’s debt pile fool you. The Gulf emirate still has the ambition to shock the world with its mammoth projects.

Al Maktoum International airport, a huge $32bn development – nearer the border with Abu Dhabi than Dubai city – opened its first runway and cargo terminal to 12 freight operators this week ahead of next March’s opening of a passenger terminal. The plan is to develop the world’s busiest airport.

Al Maktoum may be a legacy of Dubai’s boom years, which have now turned into a $110m debt mountain and gaping real-estate overhang. But the government shows no signs of slowing down aggressive expansion of both passenger and cargo flights, as the emirate seeks to exploit its strategic position and healthy track record in the industry.

The two terminals at Dubai’s existing airport, near the city’s original business district, last year handled just shy of 50m passengers, but with year-on-year growth of almost 18 per cent in January-May, Paul Griffiths, chief executive of Dubai Airports, says the “signs are looking good” and this year an extra 5m-6m people may pass through the city. Cargo over the same period has risen 27 per cent. And that growth is coming as the global industry faces serious challenges. “The Middle East is breaking the mould and Dubai is leading that charge,” says Mr Griffiths.

Since Dubai received its first passenger flight in 1937, aviation has proved a cornerstone of the city’s rapid growth, complementing the traditional entrepôt trade around the creek. A recent review forecasts more growth at the existing airport in downtown Dubai, where new construction is expected to double capacity. The review sees demand hitting 90m passengers a year by 2018, up from 75m in previous estimates. The first phase of Al Maktoum International, which has cost $820m, will also help meet this spike with its 7m passenger a year capacity.

By 2025, the plan is to bring Phase II of Al Maktoum online on an accelerated schedule with two additional runways and another passenger terminal with a capacity of 80m passengers a year to accommodate the entire operations of Emirates airline, the government-owned carrier that continues to expand rapidly.

The third phase, including another two runways, would bring Al Maktoum’s capacity up to 160m passengers a year (more than two Heathrows) and 12m tons a year of freight – the emirate’s forecast target for 2030 and beyond. At that stage, the current airport site would be turned over to another use.

Mr Griffiths shrugs off fears that the emirate, hit hard by the global financial crisis, may once again be overreaching itself but this time in the aviation sector, planting the seeds of a future crisis if supply outmatches demand. “I don’t think Dubai is perceived to have anything but a success story in terms of aviation strategy,” he says.