UAE airports surpass 100 million passengers for 2014 and Dubai dislodges Heathrow

UAE major hub airports passenger traffic: 2003 to 2013

Source: CAPA - Centre for Aviation

These two achievements aren't particularly significant on their own: both the 100 million passengers p/a mark and Dubai's assumption of the number one spot for international traffic had been looming on the horizon for some time. It was more a question of when, rather than if.

What they testify most effectively to is the rapid transformation of the air transport market in the UAE. Over the space of a decade the country's airports and airlines - led by the relentlessly successful combination of DXB and Emirates - have more than tripled their passenger traffic.

Sustained by forward-looking air transport policies and heavy investment aligned with broader national economic growth objectives, the UAE is now one of the key connecting points in international aviation.

Dubai is now number 1 in international travel, with sights set even higher

DXB handled 70.5 million passengers in 2014, making it the largest airport by international passengers worldwide, beating out LHR, which handled 68.1 million international passengers last year. DXB was the 11th largest airport for international passenger traffic just a decade ago.

DXB and LHR international passenger traffic 2014

Source: CAPA - Centre for Aviation

2014 traffic at DXB rose by 6.1%. This is stronger growth than the global average, but well below the airport's typical double-digit pace. During the year, DXB suffered an 80-day partial shutdown of its runways, needed to accommodate essential repair and improvement works for the next decade of growth.

Between 01-May-2014 and 21-Jul-2014 only one of the airport's two runways was in operation. DXB's home carriers Emirates and flydubai were heavily affected, cutting their flight movements by nearly 53%.

Other scheduled airlines, along with freighters and charter operators, accounted for the remainder of the reduction, with 18 carriers temporarily switching some flights to the new Al Maktoum International, resulting in a temporary boost to traffic for the new airport.

DXB monthly traffic 2013 and 2014 showing the steep dip in May/Jun/Jul-2014

Source: CAPA - Centre for Aviation

The restrictions in aircraft movements sent passenger traffic at DXB into decline for three consecutive months, the most significant slowing of growth the airport has seen for close to a decade. Without the slowdown, Dubai may have handled as many as 72 million passengers for 2014.

Dubai Airports CEO Richard Griffiths welcomed DXB's assumption of the number one spot, but has already announced that Dubai Airports has greater ambitions, not just for DXB, but for the two-airport system in the Emirate. According to Mr Griffiths, DXB is now the sixth largest airport by total traffic, but he believes the city could become the world's largest hub for passenger traffic by around 2020.

As an air travel hub, Dubai has already surpassed some traditional entrepot-style hubs like Amsterdam, Singapore or Hong Kong. It is now looking to rival some of the largest international markets such as Tokyo, London, New York and Paris, which handle more than 100 million passengers or more per year across multiple airports. Dubai Airport's projections are that its airports will handle 98.5-103.5 million passengers by 2020.

According to Mr Griffiths, DXB will start to approach its natural passenger capacity limits as traffic exceeds 90 million passengers p/a. Given that DXB is forecast to reach 79 million passengers in 2015, this means the airport only has two to three years of constraint-free growth left.

With only two runways and no more space available for passenger terminals, as well as Emirates expressing its wish to retain its passenger operations at DXB until beyond 2020 - by which time the airline will be handling something close to 75 million passengers p/a - the focus of aviation in Dubai will increasingly switch to the new Al Maktoum International Airport (DWC) and the related Dubai World Central aerotropolis project.

DWC is a city-sized development located just 15 km from DXB. It will be the key airport in the UAE beyond 2020, and the plans for the facility reflect its importance. Dubai has already approved the investment of USD32 billion in the second stage of Al Maktoum International Airport and the related Dubai World Central aerotropolis project.

The airport opened in 2011 and handled around 850,000 passengers in 2014, mostly thanks to the temporary reduction in operations at DXB.

The existing DWC facility has capacity for five million passengers p/a, but this is just the start. The expansion plans for the airport call for the addition of four runways, two passenger terminals with four concourses and a dedicated cargo facility. Capacity upon completion will be for 200-220 million passengers and 16 million tonnes of cargo p/a.

Emirates has already dispatched the majority of Emirates SkyCargo's freighter operations to DWC. flydubai may switch to the new hub airport in the next few years, although it enjoys some benefits from remaining close to Emirates at DXB for the time being. DWC is likely to become the primary airport for foreign carriers serving Dubai.

Dubai's long-term vision places the city in the heart of one of the largest, if not the largest, integrated aviation hub in the world. The emirate has the will, the money, the resources and the commitment to make this vision a reality. All it needs to do now is achieve what it has set out to do. And despite the hype, it is not merely money, but the vision and commitment that enable this expansion. Most major governments have the wherewithal to make this level of investment; it is the other ingredients that are absent.

Abu Dhabi marks its best ever year, driven by Etihad Airways' development strategy

Abu Dhabi International Airport has long been in the shadow of the DXB, but growth at the airport has consistently eclipsed its larger rival. Passenger traffic at AUH grew 20% in 2014 - the best ever for the airport - with just under 20 million travellers passing through the airport in 2014.

While still far behind Dubai in terms of outright traffic, Abu Dhabi is now well established as a major long-haul travel hub and its outlook rivals that of its larger neighbour. AUH traffic is projected to grow even more quickly than that of DXB. Traffic is forecast to expand 50% over the next three years, reaching 30 million p/a by 2017 and moving above 40 million by 2020.

Abu Dhabi and Dubai passenger traffic and growth rates: 2004-2014

Source: CAPA - Centre for Aviation

Like DXB, friendly government policies and an expansionist home carrier support Abu Dhabi's ambitions, although Etihad Airways' model differs markedly from Emirates. The latter feels it is large enough that it can rely on its organic expansion to ensure growth, augmented by a few key partnerships. In comparison, Etihad has built a virtual alliance, initially through codeshare partnerships but increasingly through strategic equity purchases with carriers in key markets.

The carrier is still expanding organically - it is due to take delivery of 16 aircraft this year - but fleet expansion represents only one of the pillars of its growth strategy.

Abu Dhabi International Airport is already looking at what new construction it will need once its massive Midfield Terminal Complex is complete. The new terminal will raise capacity at the airport to 40-50 million by 2017, meaning it will only be sufficient to accommodate around five to six years of forecast growth. Another terminal, with capacity for an additional 30-40 million passengers p/a, is already under consideration, with the aim of completing it by the middle of next decade.

Sharjah Airport rides high on Air Arabia's success

It is no coincidence that a strong airline is part of a strong airport. Sharjah International Airport (SHJ) is home to Air Arabia, the oldest and most successful low-cost carrier in the Gulf region. The airport handled 9.5 million passengers in 2014, an increase of better than 12%. The growth comes mainly on the back of new routes and additional frequencies by both new and existing carriers, especially by Air Arabia which handles better than 80% of traffic at the airport.

Passenger activity at the airport is expected to reach around 16 million by 2020 and 25 million p/a within 20 years. Sharjah is the third-largest UAE emirate and Air Arabia feeds traffic into Dubai, located immediately to its south, as well as to the smaller northern emirates, which are becoming increasingly important as tourism destinations.

Sharjah International Airport passenger traffic

Source: CAPA - Centre for Aviation

Unlike Dubai and Abu Dhabi, Sharjah has not embarked on a grandiose expansion programme and is taking a more incremental approach. Its 30-year long-term plan calls for a review of its expansion every five years to ensure a measured response to growth. The plan calls for facilities that will streamline passenger movements through the airport, in keeping with its position as the region's major dedicated low-cost airport.

Sharjah opened a new runway, taxiways and air traffic control facility in Oct-2014, enough to handle its needs for the next 15 years. With the new runways capable of handling aircraft up to A380 size, it also contributes to Sharjah's goal of developing itself as a secondary cargo airport for the UAE. The airport is also quietly pushing itself as a hub for private/business aviation, with its proximity to Dubai and relatively uncongested facilities.

Invisible infrastructure the chief concern

The UAE's hubs are engaged in massive building programmes in order to keep the scale of their facilities up to the level of their traffic growth. Most of the groundwork for these programmes has been laid, and it is a matter of ensuring that construction stays ahead of demand, to ensure that growth is not constrained.

A less well addressed, but just as vital infrastructure concern for the UAE's hubs continues to be the airspace above them. Aircraft movements through the UAE are projected to increase by nearly two thirds out to 2020, to around 1.2 million per year. The GCC states collectively are expected to serve over 400 million passengers p/a by 2020, with total aircraft movement in the Gulf airspace expected to hit over 2.3 million.

The GCC's airspace is poorly organised, delineated by national boundaries and military no-fly zones, rather than structured in a way to efficiently control traffic flows. Not only does the UAE play host to three major airports in close proximity to each other, but the country's airspace includes major east-west flight corridors for en route traffic.

UAE GCAA aircraft movement projections to 2030

Airport	2013		2015		2020		2030
	Total	Avg/Day	Total	Avg/Day	Total	Avg/Day	Total	Avg/Day
Abu Dhabi	135,213	370	187,573	514	280,542	769	475,652	1,303
Al Bateen	31,571	86	32,803	90	30,198	83	25,609	70
Al Ain	93,404	256	106,018	290	107,015	293	108,417	297
Sir Baniyas/Delma	2,300	6	2,440	7	2,828	8	3,800	10
Dubai & DWC	381,153	1,044	441,493	1,210	634,208	1,738	996,240	2,729
Sharjah	69,610	191	84,228	231	117,980	323	192,177	527
Fujairah	14,222	39	15,088	41	17,491	48	23,506	64
Ras Al Khaimah	13,747	38	15,156	42	19,343	53	31,508	86

Source: UAE General Civil Aviation Authority

Aviation stakeholders, including airlines, airports, regulators and air traffic management organisations, have issued repeated warnings that without improvements to this situation, congestion will reduce the attractiveness of Gulf airlines, the efficiency of the region's airports and will cost hundreds of millions of dollars in delays, longer flight times, extra fuel burns and passengers lost to other alternatives.

Better air traffic flow coordination is needed between the GCC states. The UAE has been leading efforts to reform airspace, particularly air corridors with its neighbours. In the long term, the region would benefit from a major overhaul of its airspace design and control.

It has been repeatedly suggested that a EUROCONTROL-style pan regional ATM body would provide the best solution to the current piecemeal approach. Any such body would need significant political will behind it, and any attempt to introduce it prematurely and without the necessary support could force abandonment of the whole concept.

The introduction of new air traffic management is also key to ensuring that airspace does not become an impediment to growth for the region. The UAE continues to press its neighbours to upgrade their own ATM systems, due to the flow-on benefits it experiences.

The objective for the UAE and the GCC airports more broadly is to keep passengers flowing through their hubs, visiting the tourist attractions, attending conventions and going to sporting events, all to feed money into their growing economy. The recent dip in oil prices has only highlighted the importance of diversifying economies away from reliance on petrochemical exports for greater stability and sustainability. This intelligent investment for the future is rare with democratic energy producers.

UAE airport growth outlook is positive - look out Atlanta and Beijing!

Unlike many other major international travel hubs, the growth outlook for the UAE's airports is rosy. DXB, along with the smaller airports at AUH and SHJ are mostly free of infrastructure constraints, and benefit from aviation friendly government regimes and rapidly expanding domestic carriers. Their overriding objective is to keep passengers flowing through their hubs to feed money into the UAE's economy.

The fortunes of UAE's major airports stand in stark contrast to developed hubs such as London, New York and even Beijing and Shanghai. To a greater or lesser degree, these airport systems all suffer from congestion, either on the ground or in the air, and are approaching capacity limits of their existing infrastructure - yet with no plans for expansion.

In comparison, while airspace problems are beginning to emerge, Dubai has a virtually clean slate design in DWC, and SHJ and AUH still have plenty of room for growth.

World's largest airport systems by passenger traffic 2013

Major city system	Passengers
London	139,737,969
New York	112,162,184
Tokyo	104,610,661
Atlanta	94,431,224
Paris	94,380,929
Beijing	88,167,618
Chicago	87,139,762
Los Angeles	86,656,900
Shanghai	82,789,492
Dubai	74,946,034

Source: ACI World

Dubai Airports expects that its two airport system will overtake Atlanta and Beijing by 2020, making it the biggest aviation hub in the world.

With DWC, AUH and SHJ being pulled along in the wake of DXB, the UAE's key airports may be handling a combined 160 to 170 million passengers p/a, making the UAE the world's busiest airport system.