Reaching new heights in the service sector

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Soaring success: Etihad will add 12 new aircraft to its fleet this year.

Despite the success of the expansion projects at Abu Dhabi International Airport completed in 2002 at a cost of nearly US$230m, the passenger traffic was still more than the airport could handle.

The airport was used by over 3.4 million passengers in 1998, 5.2 million in 2004 and 5.4 million in 2005. Figures for 2006 show the passenger numbers exceeded 6.8 million and projections for 2010 expect 10 million passengers per year. Consequently, in 2004, work began on a more ambitious and multi-billion dollar expansion plan to transform Abu Dhabi International Airport into a major transport hub for the Middle East for both cargo and passengers. The first phase expansion project has so far included the construction of two new terminal buildings with a capacity of three million passengers a year. These were built as a quick fix to the capacity problems at the airport (completed within six months of being designed) and opened in September 2005. The terminals are designated terminal 1A (with capacity of one million passengers per year) and terminal 2 (with capacity of two million passengers per year). Phase two of the expansion, which will begin in late 2006 for completion in 2010, will include the construction of a new super-sized midfield terminal building, along with a second parallel 4100 metre runway, a new aircraft control tower and new cargo facilities. This massive development is expected to cost US$6.8bn and is essentially a new airport. When the new facilities are complete the existing airport will be phased out. The new mega-midfield terminal complex will be capable of handling 20 million passengers a year initially and then later, as Abu Dhabi develops as a major Middle East transport hub, up to 50 million passengers a year, which will no doubt provide major competition to Dubai International airport The project is expected to double the existing area of the airport to 34 sq km. The project will provide a top quality home base for the UAE's national carrier Etihad Airways.

Launched in July 2003, with Abu Dhabi as its hub, Etihad started commercial operations the following November and has grown its fleet and network rapidly; the airline currently operates 25 planes flying to 38 destinations across the globe and has set itself the target of reaching 70 worldwide destinations by 2010. Consequently, the company recently announced that it will spend US$50m this year building a new head office and training facility near Abu Dhabi International Airport which is expected to be finished by the end of this year. The training facility will house four simulators that have been approved by the Department for Civil Aviation and full-scale interiors of a Boeing 777-300ER and Airbus aircraft and will be completed in the third quarter this year.

Etihad is also increasing its staffing levels dramatically this year, most notably its current cabin crew staff level of 1200 will grow to 2000 by the end of 2007 as it takes delivery of a new plane each month this year. Such investment in expanding its facilities will help Etihad in its aim of hosting the majority of the business activities. Furthermore, Etihad is embarking on a new phase in which it will focus less on adding routes and instead develop existing routes, for example increasing frequency to double daily status on major routes, to consolidate its network.

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