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Dubai eyes 90m air passengers by 2018 Funding in place for future growth

Wednesday, Jul 06, 2011

Dubai Dubai will invest $7.8 billion (Dh28.62 billion) to expand Dubai International airport under a 10-year plan, permitting capacity to be increased from the current 60 million to 90 million passengers per year by 2018, Dubai Airports said yesterday.

It added that the plan which responds to a decade-long traffic forecast for Dubai International (DXB) and Dubai World Central (DWC)-Al Maktoum International , has been approved by His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of UAE and Ruler of Dubai.

The plan is primarily aimed at facilitating Dubai’s economic expansion by generating 22 per cent of the emirate’s employment and contributing 32 per cent to Dubai’s gross domestic product (GDP) by 2020.

“The combination of rallying tourism, Dubai’s proximity to the emerging economies of India and China, and the emirates’ established role as a trading hub, is together expected to drive traffic growth and further elevate Dubai’s status as a global centre for aviation,” Shaikh Ahmad Bin Saeed Al Maktoum, Chairman of Dubai Airports and President of Dubai Civil Aviation and Chairman of Emirates airline and Group, said in a statement.

International passenger and cargo traffic are projected to increase by an average 7.2 per cent and 6.7 per cent respectively by 2020.

“By 2020, 98.5 million passengers and over four million tonnes of air freight will pass through our airports,” said Shaikh Ahmad, adding that the fleet and networks of Emirates and flydubai will grow considerably to accommodate traffic and capture market share.

“We are investing $7.8 billion to capture, augment and deliver benefits to consumers, airlines and the broader economy,” said Paul Griffiths, chief executive of Dubai Airports.

He added that the strategy includes aggressive expansion plans for “airspace, airfield, aircraft stands and terminal areas” at Dubai International over the remainder of the decade in order to optimise investment, deliver timely capacity — further inching closer to attaining the world’s busiest airport title for international passenger traffic by 2015.

Robust revenue stream

“It would also create a robust revenue stream, fuelled by increased commercial and retail income, which will fund the development of Dubai World Central in the long term,” Griffiths said.

Clearly, a lot of this growth is being fuelled by Emirates’ [airline] aggressive expansion.

Currently operating with a fleet of 153 wide-bodied aircraft, and with additional 200 aircraft on order (majority being Airbus A380s), Emirates would require a huge area to accommodate and manage its growth and additional aircraft operations.

Flydubai, meanwhile, has 16 aircraft in its fleet, with 34 more on order.

“Of the 90 million passenger goal, these two airlines could account for 76 per cent of that number. The A380s alone could account for about a third. Note, we are looking at 100 per cent load factors, which is unrealistic, but then again Emirates needs to keep them as full as possible.

“Indeed, the airline is already buying load factors by cutting fares now,” Addison Schonland, a partner of AirInsight, an aviation and aerospace consultancy focused on industry competitive intelligence, told Gulf News.

By Shweta Jain?Senior Reporter

© Gulf News 2011. All rights reserved.