Tuesday, Aug 07, 2007

(Updating a story published at 0955 GMT with an analyst comment.)

DUBAI (Zawya Dow Jones)--Dubai World Central, a Dubai government owned company that's building the world's biggest airport, has ruled out selling shares to the public to help fund the $33 billion aviation venture, an official said.

"Financing will be raised through a full range of options such as bank borrowings and bonds but with the exception of an initial public offering," Michael Proffitt, Chief Executive of Dubai World Central's logistics unit, told Zawya Dow Jones in an interview.

The company, known as DWC, has already raised 10 billion U.A.E. dirhams ($2.73 billion) for the project that will create an airport covering a vast area of empty desert on the fringes of Dubai.

When complete the airport and its facilities will have a greater capacity than both Chicago's O'Hare International Airport and the U.K.'s Heathrow combined.

Dubai, which is currently investing $4 billion to build a third terminal at its existing international airport, could threaten European airports through its strategy to global hub for air transport between east and west.

The vast project is intended to eventually handle 120 million passengers and 12 million tons of cargo landing in the Persian Gulf sheikhdom on six parallel runways.

The scale of investment and capacity are staggering, and the government is building the project in a "smart way", said Kareem Murad, transportation analyst at Dubai-based investment bank Shuaa Capital.

The DWC idea is not farfetched considering current industry trends, Murad said. "It's in close proximity to Jabel Ali port which makes it an ideal location for setting up logistics operations," he said.

DWC is currently in discussions with passenger and cargo airlines to shift or launch operations from its facilities, Proffitt said. "We are in this process right now and can't really say how many or which airlines will be operating from here," he said.

According to Murad it is likely that low-cost carriers will use DWC as a secondary hub. "It's in the middle of Sharjah and Abu Dhabi, and such carriers can benefit a lot from this central location," he said.

-By Sarmad Khan, Dow Jones Newswires, +9714 364 4965; sarmad.khan@dowjones.com

Copyright (c) 2007 Dow Jones & Company, Inc.

(END) Dow Jones Newswires

07-08-07 1437GMT