By Courtney Trenwith
The first carriers to shift over to Al Maktoum International could set themselves up for generations, says Courtney Trenwith
Another month, another record for Dubai International Airport (DXB). With more than 7.3 million passengers in January, DXB is well on track to reach its forecast of 85 million in 2016. After that, the headlines may no longer be so positive.
Even with Concourse D opening last month, adding 15-18 million passengers to the capacity of the emirate’s main airport, DXB will be nudging so close to its 90 million capacity that there will be barely breathing room for next year’s undoubtedly just-as-ambitious growth target.
The space for 5 million extra passengers come the end of the year will be quickly filled by organic growth – industry body IATA estimates international traffic will increase an average of 3.8 percent annually over the next two decades and you can bet Dubai will grow even faster.
Dubai’s aviation growth is underlined by the fact that it keeps climbing despite some of its former biggest markets, such as Russia, shrinking. It just finds travellers from other parts of the world.
But add into the mix flag-carrier Emirates’ push for 50,000 additional seats to India, potentially its most untapped market (thanks to its neighbour’s protectionist policies that do little other than stifle choice for passengers and inflate ticket prices), plus multiple new destinations and expanded services in North America, its impending flights to Panama and New Zealand and we can safely say that capacity will be consumed before the peak summer season of 2017.
As in the majority of international cities, the flag-carrier has right of way. And Emirates is far, far, far from reaching its full potential. The airline alone increased passenger numbers by 9 percent last year and it has dozens of 500-plus-seat A380s due to be delivered by 2020. North American traffic to Dubai alone increased 20 percent in January.
So that brings us to the elephant in the room: how will foreign carriers continue to partake in Dubai’s phenomenal aviation growth? DXB is not only the busiest international airport in the world, it is still one of the fastest growing in terms of passengers. No right-minded airline chief will want to avoid participating in that growth.
But with little room to expand at DXB, that leaves one solution: Al Maktoum International Airport.
Foresight means the emirate’s second airport – planned to become the world’s largest by mid-next decade - is already operational. But despite the increasingly cramped atmosphere at DXB, so far only four airlines are using the new facility, which is currently operating at about one-seventh of its capacity.
Some have argued to Arabian Business that their passengers do not want to use Al Maktoum, claiming it is too far from the city or it does not have the same facilities and connections as DXB. That is despite the airport being closer to almost half of the city and, for the thousands of short distance, point-to-point travellers each week, the rapidity of immigration and security at Al Maktoum is surely an attractive selling point.
Some have called for greater incentives to migrate, and when the airport first opened in 2013 that could have been a fair point. But as DXB gets tighter and tighter, the argument for incentives at Al Maktoum gradually becomes a moot point; soon enough, airlines will be clambering over each other to get there first and claim the most competitive time slots.
Emirates is planning to move there within the decade – work is due to begin on preparations this year – but the smart competitors will precede the flag carrier and snare what could be lucrative positions. We saw in February how costly it can be to miss out when Oman Air paid a record $75m for one of Air France/KLM’s slots at London Heathrow Airport – one of the most congested in the world. Similarly, Qatar Airways paid $20m to Cyprus Airways for a Heathrow slot two years ago.
Dubai Airports so far seems unfazed about the transfer of foreign airlines to Al Maktoum. It is probably well aware that by 2020 – when it expects 126 million passengers to pass through Dubai annually - airlines will be banging down doors to get a foothold. It will likely be a case of ‘chicken and egg’; once one major airline moves, others will follow close behind. It will certainly require careful collaboration.
Either way, the emirate’s second airport is bound to draw far more attention very soon.transport news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.