Complex Made Simple

Dubai International Airport targets 90m passengers by 2018

Dubai's advanced infrastructure and high-level of connectivity should help the emirate edge the competition as it steps up its bid to become the world's largest international air hub by 2018, according to the president of Emirates airline Tim Clark.

“Dubai Airport’s ‘SP2020’ plan will enable capacity at Dubai International to rise from 60m to 90m passengers by 2018,” Clark told the Oxford Business Group. “The paramount advantage that Dubai must continue to leverage is its superior infrastructure.”

He said that the government’s efforts to ensure transport networks were well coordinated would give the emirate an advantage over its rivals, even though the number of countries looking for a share of the global markets was rising. “Not only have leaders successfully developed a highly efficient road network, a state-of-the-art port operation and a hugely successful airport, but they have also ensured a level of connectivity between each of these entities that is unrivalled anywhere in the world,” he said.

Service levels must keep up with expansion plans

Dubai Airports CEO Paul Griffiths agreed that Dubai’s ambitious expansion programme should pave the way for the emirate to increase its market share of passenger and cargo transhipment. But he also stressed the criticality of safeguarding service in the face of growing competition. “Other airports are being developed in the region with an eye on the same worldwide market,” he said. “Keeping those two factors – size and service – in sync will be crucial for success.”

Griffiths added that on the key challenge surrounding the expansion planned for Dubai International was how the site would accommodate the anticipated rise in passenger numbers. “The increase is actually something that we can fairly well predict based on our track record and experience,” he said. “What concerns me is balancing the scale of our build programme such that we will not only be able to accommodate the type of volume required, but at the same time ensure that we maintain and improve the quality of service. Given the confined space we have to work with it will be a challenge, but a challenge that we feel we have adequately addressed within our SP2020.”

Griffiths was bullish on the high level of investment earmarked for Dubai International, saying it was proportionate to the emirate’s ambitious plans to extend its reach worldwide.

“While the scale of investment against the local market may seem very aggressive, actually, and within the context of the global market, it is relatively modest,” he said. “What we are doing is using Dubai as an attractive destination for tourism and commerce, as well as a global long-haul aviation hub.”

Griffiths also highlighted the move by both Emirates and Flydubai to embark on significant fleet expansions, saying it was a sign of their commitment to the emirate’s development programme.

Oil prices, Emissions Trading Scheme represent major hurdles for global carriers

Despite the home-base carriers’ plans to boost aircraft numbers, Clark pointed out that globally, the airline industry still faced a number of major challenges, led by rising oil prices and the European Union’s carbon emissions trading system.

With fuel now representing about 42% of an airline’s costs, he voiced concerns about the impact on the industry if oil prices continued to escalate. Clark also questioned how effective the emissions trading scheme (ETS) would be in achieving its objective of reducing carbon emissions.

“The recently imposed ETS is a result of rising environmental concerns combined with a global misperception that the aviation industry is the primary culprit for the state of the world’s pollution levels,” he said. “In Emirates’ particular case, the EU has promised not to charge us so long as the UAE can demonstrate that it has implemented equivalent measures. Despite the fact that we have real concerns regarding the European approach, at the end of the day we have the same goals, and the economic crisis has only provided further impetus for the airline industry to improve fuel efficiency and reduce emissions.”

The full interviews with Clark and Griffiths will appear in the Oxford Business Group’s forthcoming guide The Report: Dubai 2013.