By Robeel Haq www.arabianbusiness.com
Dubai World Central gets ready to launch its airport cargo operations with a bang.
When Dubai announces that it is building the world’s largest airport at its new super-hub Dubai World Central (DWC), the world stands up and pays attention. However, even super-hubs are not completely invincible to delays caused by a global economic recession. Over a year later than expected, Al Maktoum International Airport is now back on track to fulfil its promise of becoming the world’s largest passenger and cargo hub with its first section, cargo operations, due to start from June 27.
The vision for the US$33 billion airport has always been hugely ambitious. Even without a global economic slowdown on the cards, the unprecedented super-hub project, Dubai World Central, in which the airport is based, was always going to be a monster to manage. The chairman of Dubai Aviation City Corporation, His Highness Sheikh Ahmed bin Saeed Al Maktoum himself boldly promised an “unparalleled global commercial, trade and transportation hub with a unique integrated multi-modal logistics platform which will change all known air, land and sea transportation parameters”.
As part of the team responsible for the development of the new airport in this revolutionary development, Andrew Walsh, vice president for cargo and logistics at Dubai World Central, defiantly asserts that the airport has in fact made remarkable progress considering the financial climate.
“The airport started construction in 2005/2006 and there was speculation of opening in 2008. But for such a large development that was always just unrealistic,” he argues. “Inevitably with a project of that size, it has had some issues with the construction which has led us to say that the middle of 2010 is the right date to open.”
Walsh himself has only been involved in the project for 18 months, but has had the satisfaction of seeing the airport become a reality.
“This is such an exciting opportunity for Dubai,” he enthuses. “I have been involved in making sure that the new airport is fit for purpose and that it suits our needs as the airport operator.”
With the new addition of the cargo and logistics remit under his belt, Walsh’s job has certainly not been an easy one. Meeting such huge expectations from the start, the airport has indeed done well to reduce its delays and start operations. Considering the long-term planning and future development of the project, this setback is unsurprisingly not one Walsh wishes to stagnate upon. Afterall, once fully completed, the new airport will have five runways, four passenger terminals with a potential capacity to accommodate a staggering 160 million arrivals a year and 18 cargo terminals with a capacity of a whopping 600,000 tonnes.
Whilst the airport will start with a moderate, at least by its own standards, cargo capacity of 250,000 tonnes a year, the facilities are geared up to handle much more.
“The cargo terminal building has been designed for a maximum of 600,000 tonnes per annum,” says Walsh. ” We haven’t yet fitted the entire building out with all the equipment we need to get up to this level but that is part of our phasing process – to increase capacity as demand increases.”
Walsh is confident that the demand for cargo will continue to increase and that Al Maktoum International’s ability to offer a cargo capacity unparalleled in the rest of the world will give it an advantage over other super-hubs. Dubai’s own impressive cargo traffic record supports this further. A new report by the Airports Council International (ACI) places Dubai International Airport as fifth in the world for cargo traffic. Even more impressively, Dubai saw an increase of 5.6% in cargo traffic last year – making it one of only three airports to record a growth. Globally, airports in general saw cargo volumes decline by 8.2%. These impressive statistics led the ACI report to positively conclude that the Middle East had had a “more stable overall performance curve” last year compared to other regions.
Dubai Airport’s own figures for this year also show a strong growth, with cargo handled in February totalling 171,707 tonnes, up an astonishing 26.7% from a year ago.
“If you look back over the first two months of the year, we have seen a growth of cargo in DIA,” agrees Walsh.” Last year we finished the year 5.6% up when the rest of the world was in decline. There is definitively good growth potential in the short, medium, and longer-term.”
Certainly on the cargo front, Al Maktoum International promises some very exciting facilities aimed at further driving up this demand. Walsh himself is enthused by the current changes in the way supply chains are delivered, including the increase in sea-air conversions. With the adjacency of Jebel Ali Port, loading freight arriving by sea onto planes at the new airport will be much faster, more efficient and therefore more desirable to its customers.
“Cargo and logistics is a hot reinvigorated subject in Dubai at the moment, and it is great to be part of that,” he stresses. “We have an opportunity to actually make Dubai an easier place to do business and to become a really competitive global hub.”
Of course, Dubai remains beautifully placed geographically as a hub for the region – providing a go-between for South East Europe, CIS, the Indian sub-continent, Africa and the rest of the Middle East. Being based at the Dubai World Central super-hub with its benefit of years of forward planning, also gives the airport a distinct edge as a part of the integrated multi-modal supply chain. As well as the excellent and renowned facilities at Jebel Ali port, the airport’s other neighbour Dubai Logistics City (DLC) is a massive one-stop shop for warehouses and logistics offices. With everything in one neat location, it’s no wonder that the airport’s developer is feeling confident about the future.
Unlike many other airports that are geared up specifically for passenger flights, where cargo is almost an afterthought, Al Maktoum International has been developed with at least an equal importance being given to cargo operations. It is almost predictable that the airport would launch with cargo as opposed to passenger operations.
“The airport as a whole was developed on that site as part of the vision to have a multi-modal hub predominantly built around the cargo and logistics operations,” Walsh concurs. “A primary reason for the airport to be there is that co-location with the port, the development of the hub and the access to the road infrastructure at that point. It made sense for cargo to start as that was one of the primary drivers for the airport being there.”
The other key driver was to reduce the pressure on its existing sister airport, Dubai International. Nearly a victim of its own success in terms of both cargo and passenger throughput, Dubai Airport has a limit in its capacity to handle the growth expected in the future. “We are certainly moving up in ranks as the largest cargo airport in the world and we know that in the foreseeable future there is going to be pressure on that in terms of our overall capacity,” admits Walsh. “It made sense to make cargo the first move at the new airport to help start relieving some pressure on Dubai International.”
With the new airport being viewed as a solution to Dubai’s potential future aviation constraint, it is envisaged that together both the airports will be able to handle the region’s growing cargo and passenger numbers.
“We are predominantly looking at moving airlines from Dubai International rather than taking new airlines in at this point as we do recognise that there needs to be some relief of some of the pressure there, ” says Walsh. This may even lead to a modification of the cargo facilities, with Dubai Airport cargo operations predominantly being around the belly-hold cargo within the passenger aircraft.”
Unfortunately due to confidentiality, Walsh has to remain quiet about which airlines have already signed up to join the airport in the near future. There has been talk that the region’s flagship carrier, Emirates Airlines, will be delaying its relocation to the new airport by up to 10 years. Walsh however, remains optimistic.
“Our first phase is to show the potential to the airlines and encourage those airlines to move across. We would like to be able to get to 250,000 tonnes of cargo within the first year through a phasing of airline moves,” he says.
Walsh remains similarly hesitant to give a date for the commencement of the passenger side of operations. “We haven’t set a date at this time,” he says noncommittally. “The passenger facility is at its final stages of construction and is substantially complete now. If you went out to the site, you’d see that we are fitting out the terminal, building the car park and forecourt area and doing finishing touches in effect.” The passenger terminal aims to have a capacity of 7 million passengers, with the space to cater to 160 million annually in around 10 year’s time.
Last year, Dubai International itself received over 40 million passengers and is now being expanded to receive 75 million by 2012. With the numbers of arrivals into the region expected to nearly double that in the next 15 years, it is clear that the existing airport will not be able to cope with this expected growth. So once cargo operations at Al Maktoum airport are successfully underway, passenger operations look set to follow. “What we didn’t want to do was to put too much pressure on the airport by opening both passenger and cargo at the same time,” Walsh states.
For now, the future for the airport is looking very bright and Walsh expects this growth to continue.
“What I see for DWC is that cargo is going to incrementally grow over the next few years and we will keep adding capacity as the demand is there,” he predicts confidently. “Tenants are taking up facilities in DLC and as that part of the community grows, there will be a demand for the airlines to continue to operate out of the airport. We have a phased master plan which increases its capacity over the next 15 years.”
With so many advantages, the airport promises to go from strength to strength.
“We’ve been asked before how do we compare to our competitors in Sharjah and Abu Dhabi, but our competitors are airports like Hong Kong and Singapore,” says Walsh. “Although we do obviously look at our regional competitors, we are in the global business here. We want to take our rightful place in the world.”