This week’s Dubai Air Show is another striking reminder of the rapid growth that is taking place in the Middle East, led by Dubai International Airport and its base carrier Emirates. A record order for new aircraft (70 A350s, 11 more A380s and 12 777-300s), in addition to its existing orders, means that the need for a new Dubai airport becomes increasingly obvious.
|The Dubai World Central project includes a US$10 billion airport, which was recently renamed Al-Maktoum International Airport. The first of the six runways was recently completed and freighter operations are scheduled to begin in 2008.|
In 2006, Dubai Airport (DXB) was the second fastest growing (after Beijing) among the world’s top 50 airports. Growth of 16.2% took the airport to 28.8 million passengers and a global ranking of 37th, up five places on 2005. In the first six months of 2007 passenger numbers increased by 17.9%, suggesting that a place in the top 30 this year is almost assured.
|Source: Dubai Airport|
Since 1994, traffic has achieved double-digit growth every year except 1998 (6.8%) and 2001 (9.6%). In the last 10 years, traffic has grown by 260%, or 13.6% per annum.
Emirates the key driver to growth
Government-owned Emirates is the dominant airline at DXB with over 50% of all capacity and 20 times more seats offered each week than any other airline. The Top 10 airlines for this winter based on seat capacity are shown below.
|Airline||Frequency Share||Capacity Share|
|Source: OAG Max Online for w/c 12 Nov 07|
If the services of Air India Express are added to the Indian Airlines figure then between them they have a 5% frequency share and 3.3% capacity share. The only western airline to make the top 10 is Lufthansa thanks to its services to Frankfurt and Munich.
In its last financial year (April 06 to March 07), Emirates reported carrying 17.54 million passengers at an average load factor of 76%. The airline has maintained load factors in the low-to-mid 70s despite doubling in size in four years. Having commenced services on nine new routes in 2006 (Abidjan, Addis Ababa, Bangalore, Beijing, Hamburg, Kolkata, Nagoya, Thiruvananthapuram and Tunis), this year the airline has added new services to Venice, Newcastle, Sao Paulo, Ahmedabad and Toronto, and begins Houston services on 3 December. This has resulted in Emirates reporting traffic growth of 23% to 10.3 million in the first half of its latest financial year.
Its fleet of 100 passenger aircraft is currently split slightly in favour of Boeing, with 53 aircraft compared to 47 Airbus. Net profits virtually doubled to US$643 million.
UK and India are biggest country markets
An analysis of the top country markets to/from DXB reveals the importance of the UK and India. These two markets alone account for just over one-fifth of all capacity this winter.
|Source: OAG Max Online for w/c 12 Nov 2007|
Of the top 15 countries around half are in the Middle East, with only the UK and Germany representing Western Europe. India and Pakistan lead the Asian countries followed by Thailand, China and Singapore.
No figures are publicly available about what the share of transfer traffic is at the airport or which are the leading country-flows that connect over Dubai. There are likely to be considerable passenger numbers travelling via Dubai between the UK and India though the recent liberalisation of the UK-India market will have encouraged more passengers to travel directly.
Twin peaks during the year
A closer look at traffic to the UK over the last three years highlights an interesting seasonality profile with peaks in August and December. The latter may well be due to Brits heading off ‘down under’ during the northern winter to soak up some winter sun.
|Source: UK CAA Airport data|
The peak-to-off-peak ratio in 2006 (August versus May) of just 1.39 is low, which helps the airport in terms of year-round efficiency.
Comings and goings
Next week sees the launch of a new service by UK all-business-class airline Silverjet from London Luton airport. This is only the airline’s second route after New York and becomes the second new UK airport this year to get a Dubai service (after Newcastle) and brings the total to seven in the UK. Another new service launched this winter is a thrice-weekly service to Copenhagen with SAS. However, not all Dubai routes are a guaranteed success. Aer Lingus recently announced that it would be dropping its Dublin service to focus on its transatlantic operations but did not rule out the possibility of returning on a seasonal basis.
New airport gets a new name
Plans to replace Dubai are already well under way with a new airport around 40 kilometres from the existing facility that is designed to handle up to 120 million passengers annually on six 4,500m long runways. Until recently this was known as Jebel Ali International Airport or Dubai World Central International Airport, but was re-named last week as Al-Maktoum International Airport. It has provisionally been given the three-letter-code JXB.
Three terminals are planned – one for Emirates, one dedicated to LCCs, and one for all other carriers. The first runway has recently been completed and the low-cost terminal is 40% complete and will be able to handle up to seven million passengers.
|The first runway at Al-Maktoum International Airport, which has provisionally been given the three-letter-code JXB, was recently completed. Once complete, the airport will have six runways, as many concourses, and be capable of handling 120-150 million passengers per year.|