GCC invests AED150bn in airport development

Dubai: The Gulf countries are investing more than Dh1150 billion in airport development to manage the growth in passenger traffic, driven by half a dozen airlines.

Of this, the UAE is spending more than Dh85 billion, including Dh58 billion in Dubai.

Emirates, Etihad Airways, Qatar Airways, flyDubai and Air Arabia are at the forefront of the drivers of passenger traffic demand growth, that is prompting the governments to invest heavily in the airport infrastructures.

Middle Eastern airline profits are expected to rise by more than half this year to $1.4 billion (Dh5.14 billion) as they extend their routes around the globe, said a recent report by the International Air Transport Association (IATA).
Airlines in the Middle East are expected to exceed the previous profit estimate of $1.1 billion, increasing more than 55 per cent on the $900 made last year, according to IATA.

“The region’s carriers rank third in terms of operating profitability with an earnings before interest and taxes margin of 3.4 per cent, after Asia Pacific [5.3 per cent] and North America [4.1 per cent],” said IATA.
Dubai is investing more than Dh58 billion in two airports, after having spent more than Dh20 billion in Dubai International over the last 15 years. Of this, its fourth-phase expansion of Dubai International is costing the government Dh28 billion that will include a fourth concourse and associated infrastructure and Dh30 billion at the Dubai World Central in Jebel Ali.

Abu Dhabi is investing Dh25 billion in the redevelopment of Abu Dhabi International Airport which is ongoing. Last year, it has awarded a Dh12 billion contract to Arabtec-led consortium to develop the Midfield Terminal Complex.

In the UAE, both Sharjah International Airport and Al Ain International Airport has undergone significant expansion to accommodate more passengers.

Qatar is investing Dh41 billion in developing its new hub airport – the first phase is being opened while work on a second phase would start.

Elsewhere, Saudi Arabia is investing heavily in expanding a number of its airports.

Other big airport developments in the region include King Abdulaziz International Airport (KAIA) Development Phase 1 in Jeddah with an investment equivalent to $1.5 billion; expansion of Muscat International Airport estimated at $1.2 billion; approximately $2.1 billion in Kuwait International Airport; and $335 million in Bahrain airport.

By Saifur Rahman Associate Editor, May 4, 2013