By Muzaffar Rizvi www.khaleejtimes.com
DUBAI – Dubai looks set to become world aviation hub following massive investment in the aviation infrastructure that supports the Middle East airlines undergoing fleet expansion plans, analysts said.
“Aviation infrastructure will support the continuation of the sector’s impressive growth and facilitate Dubai’s economic expansion by generating 22 per cent of total employment and 32 per cent of the emirate’s GDP in 2020, Addison Schonland, US-based aviation analyst and President of Innovation Analysis Group, said.
“Dubai really is focusing on becoming the world’s hub,” he added.
Dubai Airports on Wednesday announced that His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and the Ruler of Dubai, has endorsed its $7.8 billion airport and airspace expansion programme, which will boost capacity at Dubai International from 60 million to 90 million passengers per year by 2018.
“The decree to assign yet more funds towards Dubai’s airports shows that demand is strong and that future growth can only be exploited and accommodated by making the necessary infrastructure investments as soon as is reasonably possible,” Saj Ahmad, Chief Analyst at FBE Aerospace London, told Khaleej Times.
According to Frost & Sullivan, expansion of Dubai Airport is extremely good news for the Middle East Airlines that are undergoing fleet expansion plans. This increase in fleet size will create a need for more parking space and infrastructure in the long run which in turn will bring more passenger traffic to the airport.
“Dubai Airport serves as a hub for many big airlines that have a global presence and bring traffic to Dubai. With this massive airport expansion programme, Dubai aviation industry will witness growth and in turn add to the growth in the global aviation industry. However, the rising oil prices can prove to be a challenge as this may force airlines to increase airfares and cut routes, which may have a negative impact on the passenger traffic and airlines’ profitability,” the aerospace and defence analysis firm said.
Saj Ahmad said with Dubai International Airport already on track to top the 75 million passenger mark, reaching 100 million by the end of the decade can only really be achieved through greater expansion of existing resources. “While it will be a number of years before Al Maktoum International Airport comes online to alleviate demand pressures, the decision to inject more money into Dubai’s airports is in tune with long-term traffic trends which favour the city and its ability to draw in and capture vast swathes of traffic,” Ahmad added.
Schonland said Dubai has to attract a lot of other traffic from airlines outside the UAE to support the massive aviation infrastructure. “We think 90 million passenger goal is ambitious, but it will be a huge reach amid considering the Emirates track record.”
“We realise Emirates will likely have more 777s, but let’s see where we are. Of the 90 million goal, the two airlines — Emirates and flydubai — could account for 76 per cent of that number. The A380s alone could account for about a third,” he concluded.