a celebration of dubai aviation - meed-130809-sr...

www.meed.com

A celebration of Dubai aviation

Sponsored by

01 Dubai Airport Cover.indd 1 24/03/2013 11:31

Dubai Aviation 2013 | MEED | 3www.meed.com

co

vEr

: Lia

M o

’far

rEL

L/iL

Lus

trat

ion

wEb

. ph

oto

gr

aph

: gaL

Lo/g

Etty

iMag

Es

The 31 March 2013 is another important date in the history of Dubai’s aviation

industry. It marks the start of a 10-year code-sharing deal between Emirates and Qantas that will see the Australian flag carrier route its Euro-pean flights via Dubai, rather than Singapore.

The two airlines will operate nearly 100 serv-ices a week between Dubai and Australia out of Terminal 3 at Dubai International airport. This follows the opening in January 2013 of the landmark $3.3bn concourse 3, which can simultaneously handle 20 A380s and has boosted passenger capacity at Dubai Interna-tional to 75 million a year.

The two events cement Dubai’s position as a leading aviation hub. A hub that is home to a young, award-winning flag carrier with a $16bn turnover (Emirates airline), the world’s fastest-growing start-up airline, (low-cost carrier FlyDu-bai), and an aviation industry that supports more than 250,000 employees. Soon, it will also boast the world’s largest airport, Al-Maktoum International, which is already partly operational.

In celebratIon of dubaI avIatIon excellence

3 In celebration of Dubai aviation excellence6 Dubai International airport10 Al-Maktoum International 12 Dubai aviation data14 Interview with Dubai Airports’ Paul Griffiths

and Suzanne al-Anani of Dubai Aviation Engineering Projects

18 Emirates19 FlyDubai21 Dubai Duty Free22 The MEED List

contents

contacts

MEED HEAD OFFICEal-thuraya tower 1, 20th floor, office 2004, Dubai Media city, po box 25960, Dubai, uaEtel +971 (0)4 390 0045fax +971 (0)4 368 8025Email: [email protected]

EDITORIAL Editorial Director richard thompson +971 (0)4 433 1426richard.thompson@Managing Editoraaron greenwood +971 (0)4 390 0439aaron.greenwood@Editor (MEED magazine)Elizabeth bains +971 (0)4 433 1423elizabeth.bains@News Editorcolin foreman +971 (0)4 367 8190colin.foreman@Supplements Editoraustyn allison +971 (0)4 374 8191austyn.allison@Production Editor Ken campbell +971 (0)4 375 5012ken.campbell@Senior Sub Editor David george +971 (0)4 433 2807david.george@Sub Editor ananda shakespeare +971 (0)4 433 1422ananda.shakespeare@Art Editor Martin staniszewski +971 (0)4 375 7988martin.staniszewski@Contributors Marianne Makdisi, nancy el-Khoury, sarah cowell

ADvERTIsEMEnT sALEs Head of Supplements nicholas viegas +971 (0)4 390 0697/ +971 (0)50 550 3092nicholas.viegas@Saudi Arabia Enquiries ali Jaber +966 (0)1 479 7692/ +971 (0)50 455 9153ali.jaber@Europe Enquiries ryan stewart +44 (0)20 7728 [email protected] Support Monica D’souza +971 (0)4 390 0698Monica.dsouza@

CusTOMER sERvICEsRetention and Client Relations Managersarah Keefe +971 (0)4 375 7990 customerservice@

MEED InsIgHT Head of Insight Ed James +971 (0)4 367 1231 edward.james@

MEED subsCRIpTIOn sERvICEs tel +44 (0)1858 438 837 fax +44 (0)1858 461 [email protected]

TOp RIgHT gROup HEAD OFFICEthe prow, 1 wilder walk, London w1b 5ap, uKtel +44 (0)20 7715 6000 for a full list of reader services, editorial and advertising contacts visit www.meed.com

Member of the audit bureau of circulation

all rights reserved © 2013 MEED Media fZ LLc, a 4c service – part of top right group

printed by headley brothers Ltd, uKregistered as a newspaper with the post officeissn 0047-7238

It is a remarkable achievement for the small emirate, which only opened its first airstrip in 1960 and until 1985 did not have its own airline. The expansion of its aviation industry has also played a significant role in the growth of Dubai itself. Today, the industry contributes 28 per cent of the emirate’s gross domestic product (GDP), and it will continue to fuel economic growth. By 2020, the aviation sector is expected to account for 32 per cent of GDP and 22 per cent of all employment once the new airport in the south of the emirate is fully operational.

Transit point The success of Dubai’s aviation industry can be attributed to its ability to capitalise on its location between Asia and Europe, establishing itself as a transit point between the two huge markets. This has seen passenger traffic through Dubai International soar from 5 million in 1990 to 57.7 million in 2012. Freight volumes have also increased, reaching 2.3 million tonnes last year. Dubai Duty Free has grown to become one of the

dubaI avIatIon

03-04 DA Intro.indd 3 24/03/2013 14:26

4 | MEED | Dubai Aviation 2013 www.meed.com

is expected to reach 90 million passengers a year by 2018 and cargo volumes are forecast to hit 4.1 million tonnes by 2020. Construction of con-course 4, of which Dubai Duty Free is the chief fin-ancier, began in 2012.

The next phase Al-Maktoum International and its adjacent logis-tics zone, Dubai World Central, lie at the heart of the emirate’s aviation strategy and its ambition to increase the sector’s contribution to 32 per cent of GDP.

Once completed, the facility will be the largest airport in the world, with the capacity to handle 12 million tonnes of cargo and 160 million pas-sengers. Phase one of the project is complete and fully operational for cargo traffic, with the capacity to handle 600,000 tonnes a year.

The story of the growth of Dubai’s aviation sec-tor is far from over. The commencement of the Qantas code-sharing deal signals the start of yet another chapter.

continued to climb and sales at Dubai Duty Free have risen ever higher. The number of visitors to Dubai rose above 10 million in 2012, the highest ever recorded by the emirate. The spending power of tourists plays a major role in sustaining the wider economy, supporting hotels, shopping malls and other attractions.

Dubai Airports is working to a 2020 strategic plan that envisages international passenger and cargo traffic through its airports increasing at an annual growth rate of 7.2 per cent and 6.7 per cent respectively. Capacity at Dubai International

biggest airport retail operations in the world, employing more than 5,000 people. It began operations at Dubai International in 1983 with a turnover of $20m. Today, that figure has bal-looned to $1.6bn.

Infrastructure investment To support the growth in passenger numbers, the government has invested billions of dollars in expanding its airport infrastructure at Dubai International and, more recently, Al-Maktoum International. Since 2007, this has been the responsibility of Dubai Airports as operator and developer of the emirate’s airports, follow-ing the restructuring of the Department of Civil Aviation, which also saw the Dubai Civil Aviation Authority established as the local aviation regu-latory body.

Even during the global financial crisis, Dubai’s aviation sector has kept on growing, bucking the global trend. Emirates and FlyDubai have contin-ued to add new routes; passenger traffic has ph

oto

gr

aph

S: D

UB

aI a

Irpo

rtS

; Co

rB

IS

Progress: Since its humble beginnings in 1960, Dubai’s aviation industry has expanded to become a major global hub for passenger and cargo traffic

“To support passenger growth, the government has invested billions of dollars in expanding its airport infrastructure”

dubai aviaTion

03-04 DA Intro.indd 4 24/03/2013 11:37

Were you successful?

To ensure your business win contracts before your competition – contact MEED Projects and take advantage of your FREE demonstration (quote reference AD01)

Telephone: +971 (0) 4 367 1302 Email: [email protected] Online: www.meedprojects.com

Secure new businesswith MEED ProjectsCall: +971 4 367 1302

MEED Projects isrecommended by:

Delivering project opportunities directly to you, MEED Projects will ensure you are first to win that vital business contract.

MEED Projects will enable you to track all projects in your sector and will provide you with visibility on what projects have been announced, who’s doing what, how and when.

3 reasons to subscribe to MEED Projects:1. Be the first to win new contracts through access to

trusted, reliable and in-depth project announcements before they go to tender

2. Identify the right people on every project and build relationships with key project contacts before your competition

3. First class analytical tools enable you to make strategic business decisions, recognise trends and gather key market intelligence

Subscribe now for access to:• Key contact details• Project values• Project timelines• Project stages• Project scope• Project alerts/updates• Online assistance• Linked projects• Award & completion dates• Project background information• Project owner data• Shareholder data• Analysis & reporting tools

MEEDmag MProjects2011 Adv1.indd 1 22/09/2011 11:22


Dubai international airport

The already successful regional airline hub still has plans for expansion

Dubai International airport has expanded steadily since the first 1,800-metre com-

pacted airstrip was opened in 1960. Construction of new terminals, gates, runways, taxiways and concourse buildings has punctuated the past four decades.

The most ambitious of these additions was the Emirates Terminal 3, which opened in 2008. The project trebled the capacity of the airport to 60 million passengers a year and despite this massive boost, Dubai prepared for more.

In January 2013, the landmark $3.3bn con-course 3 (now renamed concourse A) opened, bolstering capacity by a further 15 million passen-gers and with 20 new Airbus A380 gates to serve Emirates’ growing fleet. Currently, the existing Terminal 2, home to low-cost carrier FlyDubai, is undergoing expansion to double its capacity to 10 million passengers a year. This, combined with the new concourse 4, will enable the airport to serve 90 million passengers a year by 2018.

Airport legacySuch a figure may sound ambitious for an airport that served just 5 million passengers in 1990, but the emirate has been consistent in successfully predicting the airport’s future potential. By 2000, the airport was handling 12.3 million passengers and subsequently a huge expansion programme began. This has enabled Dubai’s aviation sector to stay ahead of demand, outperforming expectations by growing at 15.5 per cent a year – even through the global economic downturn.

In 2012, 57.7 million passengers used the air-port, 1.7 million more than forecast. Fortunately, the landmark Terminal 3 was ready. Bringing con-course 3 online in January 2013 allows Dubai to sustain its growth in the short term.

Dubai Airports, the owner and operator of Dubai International, predicts passenger numbers to rise at a more modest 7.2 per cent a year in future, with cargo growing at 6.7 per cent. This means the airport will reach capacity in 2018, despite $7.8bn being invested in expanding the facility between now and 2020.

For this reason, the 160-million-capacity super-size airport at Jebel Ali, Al-Maktoum International, is viewed as the long-term solution to Dubai’s future aviation needs. A timetable and a phasing schedule for the transition has yet to be defined. ph

oto

gr

aph

: co

rb

is

Terminal 3: The facility trebled the capacity of Dubai International to 60 million passengers a year

source: Dubai airports

Dubai international timeline

1959 sheikh rashid bin saeed al-Maktoum orders construction of Dubai international airport1960 airport opens with a 1,800-metre-long compacted runway and a small terminal1970s airport upgraded with new terminal building, taxiways, control tower and runway extension1974 airport receives 1 million passengers1984 second runway opens1990 airport receives 5 million passengers1998 terminal 2 opens2000 sheikh rashid terminal opens upgrading terminal 1. airport receives 12.3 million passengers2003 construction begins on new terminal 32008 Emirates terminal 3 opens taking capacity to 60 million passengers2008 cargo mega-terminal opens bringing cargo capacity to 2.5 million tonnes a year2009 construction of concourse 3 starts2009 FlyDubai launches its first flight2012 airport receives 57.7 million passengers2012 construction of concourse 4 starts2013 concourse 3 opens taking capacity to 75 million passengers

Dubai aviation

06-09 DA Dubai International.indd 6 24/03/2013 13:23


pho

tog

rap

hs:

gal

lo/g

Etty

iMag

Es; c

hit

o p

ach

ica

*=Four more nearing completion. source: Dubai airports

ConCourses renamed

For now, expansion at Dubai International is critical to meet the continuing passenger and cargo growth. By 2015, the airport will have increased its number of aircraft stands to 230 (from 144 in 2010), delivered the new concourse 4, and increased cargo capacity to 4.1 million tonnes from 2.5 million today.

Concourse 3The most recent development at Dubai Interna-tional was the delivery of the $3.2bn concourse 3, which extended the existing Emirates Termi-nal 3 by a further 528,000 square metres.

Opening in January 2013, the new concourse served 589,234 passengers in its first month, from 2,450 flights. Local contractor Al-Jaber LEGT Construction & Engineering (Alec) was awarded the contract in April 2009 after original contractor Al-Habtoor Leighton (local)/Murray Roberts (SouthAfrica)/Takenaka (Japan) withdrew. Despite having been awarded the deal in December 2008, the contractor group failed to agree contract terms with the aviation authorities, leading to the re-award four months later.

After the false start, construction of con-course 3 progressed well. “There are not many megaprojects delivered on time,” says Alec man-aging director Barry Lewis, who was also project manager at Dubai International. “This was a mas-sive, technically complex project that was deliv-ered on time and was able to be commissioned and integrated into airport operations without any major disruption.”

pho

tog

rap

h: c

or

bis

Expansion: By 2015, Dubai International will have increased its number of aircraft stands to 230

“Throughout the past decade, and more specif-ically the phase 2 expan-sion of Dubai Internation-al, DAEP [Dubai Aviation Engineering Projects] has witnessed and accom-plished a number of engi-neering achievements.

With every successful project delivery, DAEP not only adds another milestone to its achievements in the aviation sector, but augments its wide port-folio of knowledge in the aviation engineering sec-tor. Every project being delivered has its own char-acteristics, and thus its own lessons to be learned and taken forwards in the implementation of new ones.”■ The 1999 Airshow Expo is delivered following a crash programme of nine months■ The Royal Airwing and its megastructure expands to house A380-sized aircrafts

■ The CUC 6 district cooling system, which is the largest in the airport, delivers 60,000 tonnes of refrigeration■ The construction of the cargo mega-terminal, a fully automated cargo facility for Emirates SkyCargo ■ The extension and staggering of the runways■ Terminal 3, concourse 2 and concourse 3 cover a combined area of more than 1.7 mil-lion square metres

The associated construction works for those facilities were engineering achievements on their own:■ Huge excavation works at Terminal 3 under waterlogged soils■ Concreting works and retaining walls of Termi-nal 3, especially logistics■ Installation of huge circular girders at con-courses 2 and 3■ Managing larger resources of 50 contractors with more than 19,000 engineers and workers

DAEP CEO SuzAnnE Al-AnAni liStS thE biggESt EnginEEring AChiEvEmEntS At DubAi intErnAtiOnAl tO DAtE

Previous name New nameNumber of gates

Concourse 1 concourse c 49Concourse 2 concourse b 31Concourse 3 concourse a 26Gates at Terminal 2 concourse F 6*Concourse 4 (not yet built)

concourse D 21

In September 2012, Dubai Airports renamed the concourses at Dubai International. All sig-nage and computer support systems, includ-ing boarding cards, information screens, and reservation systems were switched during an eight-hour window.The new concourses are:

Dubai Aviation Engineering Projects (DAEP) department says that teamwork was critical in meeting project milestones. A dedicated design team – including members from DAEP, designer Dar al-Handasah, consultants ADPI and Alec – was based permanently on site so design changes could be dealt with immediately and daily meetings could be held to discuss progress.

This was particularly important given the com-plexity of the concourse 3 structure – an elliptical shell over a concrete superstructure – requiring bespoke design and construction solutions. In addi-

tion, late design changes based on meeting pas-senger needs better, could be swiftly managed.

Perhaps the biggest challenge in delivering the project was the management of the logistics and coordination of 19,000 workers from more than 50 sub-contractors, engaged on multiple work fronts over long periods of time. Ensuring designs were ready and approved and the materials and skilled employees were at the required work front at the right time was challenging.

“It required a massive effort from a committed management team with a very clear plan; a strong

“[Concourse 3] was a massive, technically complex project that was delivered on time”Barry Lewis, Alec



dubai aviation

pho

tog

rap

h: g

allo

/gEt

ty ia

Mg

Es

“You need a clear plan [for airport expansion] … [the actions of all parties] must reflect the common objective”Barry Lewis, Alec

belief that the plan could be achieved; and an abil-ity to adapt to change, yet still keep the tempo and volumes of works in the various areas going,” says Lewis.

Creating a fully A380-compatible concourse was another major challenge. “Unlike other commercial planes predominantly in operation, the A380s have an additional upper deck,” says DEAP chief executive officer, Suzanne al-Anani. “Hence, separate levels were created within the concourse allocating the lower level for the economy holding lounges, the second level for first class, and third level for the busi-ness class lounges.

“Secondly, the size of the holding lounges is governed by the capacity of the planes, hence these need to be enlarged for the A380s.”

Supporting infrastructure such as fuelling facili-ties, pre-cooled air supply, potable water, catering

loaders and passenger boarding bridges had to be tailored specifically to A380 requirements.

Concourse 4Fresh from success on concourse 3, in February 2012, Alec was awarded the $816m contract to build concourse 4. The new building will sit west of the existing Terminal 1, adjacent to the site of a cargo mega-terminal, currently undergoing expan-

sion. DAEP tells MEED the concourse building will be architecturally simple and elegant, using prefab-ricated structural elements assembled on site. It will also be the airport’s first Leadership in Energy and Environmental Design (LEED) certified building. Canada’s Bombardier has been selected to supply rolling stock for the concourse people-mover, which will be built by the local Dutco Balfour Beatty.

Careful planning will be the key to successful delivery of concourse 4.“You need a very clear plan, it needs to be well communicated to all par-ties, and all people representing the various par-ties must be aligned and their actions must reflect the common objective at all times,” says Lewis.

Cargo GrowthFreight volumes at Dubai International have contin-ued to grow steadily – even during the downturn – accelerating in the second half of 2012 and early 2013. In January 2013, the airport handled 188,520 tonnes, up from 173,531 tonnes recorded in January 2012. Overall growth for 2012 was 3.9 per cent with 2.28 million tonnes of cargo passing through the airport, which has a total cargo capacity of 2.5 million tonnes a year (t/y).

In line with Dubai Airport’s 2020 masterplan, the cargo capacity will increase to 4.1 million t/y once the cargo mega-terminal expansion is com-pleted. The original $200m mega-terminal was opened in 2008 and increased capacity to the existing 2.5 million t/y from 150,000 t/y. Transfer time from port to air is about six hours.

Al-Maktoum International, with its 12 million tonnes of cargo capacity, will achieve this in four.

Terminal 2Expansion of the original Terminal 2 is ongoing and remains a major component of the 2020 masterplan. The existing terminal opened in May 1998 to relieve the congested Terminal 1. It was expanded to cater for 5 million passengers from 3 million and more space is now needed.

Contractor Arabtec was awarded a $163m 25-month contract in January 2012 to double the size of the terminal to 60,000 sq m, as well as upgrading the existing facilities. This will bring capacity to 10 million passengers. A new terminal building, check-in hall, departure area and immi-gration hall will all be constructed as part of the scheme, scheduled for completion in early 2014.

Subcontracts have been awarded to Canada’s RMC Ready Mix for cement, the local Al-Abbar Alu-minium for the cladding and glass, and local Smart World for information technology. Terminal 2 is currently the home of low-cost airline FlyDu-bai, which started operations in June 2009. It also hosts 50 other airlines, catering for charter flights and specialist carriers.Bernadette Ballantyne

Compatible: Terminal 3 was built to cater to the variety of aircraft in Emirates’ growing fleet

f=Forecast. source: Dubai airports

100

80

60

40

20

0

1961

1970

1980

1990

2000201

02020f

(Million passengers)

0

20

40

60

80

100

dubai international passenger traffic

source: Dubai airports

dubai international in nuMbers

57.7 million Number of passengers carried in 2012

60 millionAnnual passenger capacity before concourse 3 opened

75 millionAnnual passenger capacity after concourse 3 opened

0.04 0.5

dubai aviation



na=Not available. Source: MEED Projects

DWC=Dubai World Central. Source: MEED

ContraCts won at al-MaktouM InternatIonal

tIMelIne for al-MaktouM InternatIonal

al-MaktouM InternatIonal Dubai’s new airport is focusing on

cargo and business aviation for now

ing the challenges at Al-Maktoum International will be mainly focused on other aspects.”

These include the size of the facilities to be constructed in a short timeframe; coordination with authorities to allow for future infrastructure, such as the metro and high-speed rail link; the number of contractors to be managed on site along with their logistics and staff; the size of the site to be managed; and the structural work to create the new terminal buildings.

Moving basesAn exact timetable for future phases has yet to be revealed. In 2012, Dubai Airports CEO Paul Griffiths told MEED that the challenge for Dubai Airports was that Dubai’s flag carrier Emirates airline cannot be moved until it has at least an 80 million passenger capacity, and this will not happen until 2025-27. This, in turn, deters other commercial airlines from moving, as connecting flights will remain at Dubai International.Bernadette Ballantyne

Construction of the rest of the airport, which includes three more passenger terminals, four more 4.5-km runways and facilities for a further 11.75 million tonnes of cargo, is expected over the next 15 years.

The size of the facility will present Dubai with a range of engineering and management issues. “Al-Maktoum is a green field; challenges usually faced in airport operating environments are not expected over there,” says Suzanne al-Anani, chief executive officer (CEO) of Dubai Aviation Engineering Projects. “Our expectations regard-

Al-Maktoum International is more than just a new airport for Dubai. It represents the

future of the emirate as a global, multi-modal transport centre and builds on the success of the shipping industry at Jebel Ali, the connection point for global trade between East and West. Linking this shipping hub with the aviation sector keeps the entire operation within a single customs zone and provides dedicated logistics facilities, ena-bling Dubai to transfer cargo from sea to air in four hours. The combination of the airport, logis-tics zone and associated facilities will be known as Dubai World Central (DWC).

The long-term vision is to create a 160-million-passenger airport with five runways, four passen-ger terminals and 12 million tonnes of cargo capacity. It will be supported by aviation-related businesses in the Aviation District and logistics firms operating out of Dubai Logistics City.

Phase one of DWC is already up and running. Cargo services began in June 2010 and general aviation operations followed in April 2011 after gaining regulatory approval from the Civil Aviation Authority in February of the same year. Since then, the first phase of the $32bn megaproject has seen 36 freight operators launch services from the airport, which handled 219,092 tonnes of cargo during 2012.

Construction dealsThe first contracts for phase one were awarded in 2006 and included a 92-metre-high air traffic con-trol tower, a new 4.5-kilometre runway capable of handling Airbus A380s, a 250,000-tonne cargo terminal facility and a 5-million-passenger termi-nal. Local firm Arabtec Construction, in joint ven-ture with Germany’s Max Boegl, was the main contractor, securing a raft of deals including the cargo and passenger terminals and the air traffic control buildings.

Other major contracts went to the local Al-Naboodah, which constructed the new runway, and Kuwait’s Kharafi National, which built the $165m shared utilities complex.

By June 2010, 17 airlines had signed up, meaning five to seven flights a day were operat-ing from the new airport. In 2012, it recorded 16,317 aircraft movements, 99 per cent more than the 8,198 in 2011. Today, 36 airlines use the airport.

“the long-term vision is to create a 160-million-passenger airport … with 12 million tonnes of cargo capacity”

Company Contract Value ($m)Thermo/Amana Contracting & Steel Buildings Fuel farm 52Arabtech/Max Boegl Passenger terminal structure 27Kuomo Construction & Engineering Passenger terminal fit-out 180Kharafi National Utilities complex 165Arabtech/Max Boegl Control tower 39Arabtech/Max Boegl Cargo terminal 76.2Arabtech Drainage and sewage system 133ETA Mechanical, electrical and plumbing naAl-Naboodah Runway 272.5Dar al-Handasah (Shair & Partners) Consultancy naAeroports de Paris Consultancy na

Jan 2005 Sheikh Mohammed bin Rasheed al-Maktoum announces plans for Jebel Ali Airport CityNov 2005 Jebel Ali Airport City model unveiled at Dubai AirshowDec 2007 Arabtec/Max Boegl joint venture completes cargo terminalFeb 2008 4.5km runway and taxiways completed by Al-NaboodahMay 2008 Arabtec/Max Boegl joint venture completes passenger terminalMar 2009 Emirates confirms its move to Al-Maktoum International will be delayed beyond 2018Apr 2009 DWC confirms that the airport opening will be delayed to 2010Jun 2010 First flight by Emirates. Airport opens to cargo operatorsFeb 2011 Airport gains regulatory approval for general aviationApr 2011 Airport opens to general aviation with 17 cargo airlinesNov 2011 DWC announced as new home for the Dubai AirshowJan 2012 Airport records 8,198 plane movements in 2011 and 89,729 tonnes of cargo movedJan 2013 Airport records 16,317 plane movements and 219,092 tonnes of cargo from 36 airlines moved

dubaI avIatIon

10-11 DA Maktoum.indd 10 24/03/2013 13:25


Al-Maktoum International has already persuaded world-leading logistics providers to set up facilities, offices and, in some cases, regional headquarters at Dubai Logistics City (DLC). Operating as a free zone, the city forms a single customs zone with the airport and Jebel Ali Port and Free Zone to ensure multi-modal transfer of cargo can be done as quickly as possible.

The new logistics city also provides its tenants with shared warehouses and dedicated plots for freight forwarders, offices and light manufacturing facilities. To date, a number of local and international firms have established operations at the city, including the UAE’s Aramex, INL and RSA Logistics, German firms Ehrhardt & Partner Solutions, Kuehne & Nagel, Hellmann Caplier, and Schaefer Systems International, and Switzerland’s Panalpina.

Ehrhardt & Partner Solutions specialises in warehouse logistics and was the first company to register for DLC back in 2006. In April 2010, it opened its logistics solutions centre to demonstrate its warehousing management software. “Clients can see how goods are brought inside and entered into the system, and how the system then maps the facilities and decides the optimum place to put the item received, keeping in mind that some are fast-moving items and some are slow-moving,” says Muthanna Muckatira, general manager at Ehrhardt & Partner Solutions Middle East.

He says enquiries have increased rapidly. “We are seeing the difference now, with economic conditions improving. People who have come to see us over the past two years had to arrange their capital expenditures. Now that the market is on an upswing, they are keen to invest.”

The company’s next step is to establish a team of 20-25 software engineers to undertake research and development at the Dubai centre.

Logistics provider Kuehne & Nagel, which began operations in 2009 with 17,000 square metres of warehouse space, has also been expanding. In early 2012, approximately 14,000 sq m of space was added to the warehouse and mezzanine, bringing the total area to 31,000 sq m. The firm also operates a logistics terminal in the Jebel Ali Free Zone and has offices in Abu Dhabi and Sharjah.

Another important tenant for Dubai World Central (DWC) is food giant Nestle, which announced the launch of a 175,000-sq-m plot in June 2012. The new facility will be used to manufacture nutrition, culinary and coffee products and is expected to create 800 jobs.

Local production“The construction of a new facility at DWC strengthens our local manufacturing capabilities, giving us more flexibility in adapting our products to local consumer preferences and using local and regional raw materials,” says Hans Juergen Jung, technical director at Nestle. “This second production facility in Dubai will also open opportunities to gain synergies in our warehousing and logistics to serve the whole Middle East region.”

The most recent logistics company to join DLC is UAE-based Mohebi Logistics, which in February 2012 announced it would construct a new $95m state-of-the-art corporate headquarters and logistics facility over a 138,000-sq-m plot.

Building on the already thriving logistics industry at Jebel Ali is another part of the proposition for DWC and is one of the reasons that Al-Maktoum International has made cargo an early priority. The 36 airlines operating from the airport are mainly cargo carriers with some business aviation. For now, this is where attention will be focused.

pho

tog

rap

h: D

ub

ai W

or

lD C

Entr

al

Convenient: Logistics city operates as a free zone

The $1.4bn Aviation District is an important part of Dubai World Central’s (DWC’s) plans to become an ‘aerotropolis’. It is intended the 6,700-sq-m-site will eventually become a regional headquarters for leading aviation firms. Utilising its airside and landside facilities, the area is being planned as an industrial and manufacturing centre with a strong fixed-base operator (FBO) network providing support services to airlines, as well as being fully set up for maintenance, repair and overhaul (MRO) operations.

Financing of $272m for the first phase of construction was secured for the site in November 2011. In late 2012, the local Al-Naboodah won the main infrastructure contract, beating bids from Khansaheb Civil Engineering and Joannou & Paraskevaides of Cyprus.

In order to ensure that the site provides companies with the best possible infrastructure

for repair and maintenance of their planes, DWC has joined forces with Australia’s Aircraft Support Industries (ASI). ASI has designed and built more than 80 hangar facilities around the world, recently delivering Hangar 6 for Abu Dhabi Aircraft Technologies.

Under the memorandum of understanding signed in February 2013, DWC will provide plots for aircraft maintenance facilities and ASI will provide design and construction services. A joint-venture agreement will set out the details and define the respective roles and responsibilities of DWC and ASI. The announcement followed news in December 2012 that a joint venture between local Al-Habtoor Trading and Altran Group, named The Wings Valley of Dubai, would be opening an MRO facility for business jets and helicopters at the airport.

Progress has also been made in attracting FBOs to the airport, with the first launching its services in December 2012. Switzerland’s Jet Aviation now provides 24-hour handling services, such as immigration and customs support, crew transportation, hotel reservations and catering coordination. Aircraft services include taxiing, luggage handling, lavatory drainage, aircraft refuelling and two new customer lounges.

“Aircraft are not subject to any parking or slot restrictions and business aviation traffic is increasingly being diverted there,” says Michael Rucker, vice-president and general manager at Jet Aviation Dubai. “With the opening of this FBO facility, we can now better meet the needs of our customers in the region, whether at DWC or Dubai International airport.”

The Aviation District is also set to become the new home of the Dubai Airshow from 2013.

AviAtion District

Logistics city

10-11 DA Maktoum.indd 11 24/03/2013 14:35


(AEDm)

0 1000 2000 3000 4000 5000 6000

EMIRATES PROFIT

Source: Emirates

DWC=Dubai World Central. Source: Dubai Airports



2011/12

2010/11

2009/10

2008/09

2007/08

2012

2011

2012

2011

0

0

0

10,000

50,000

5,000

20,000

100,000

10,000

30,000

150,000

15,000

40,000

200,000

20,000

50,000

250,000

60,000

70,000

80,000

(AEDm)

(TONNES)

0 1000020000300004000050000600007000080000

0 50000 100000 150000 200000 250000

0 5000 10000 15000 20000

EMIRATES REVENUE

DWC CARGO CARRIED

DWC AIRCRAFT MOVEMENT

IN NUMBERS

Source: Emirates

2011/12

2010/11

2009/10

2008/09

2007/08

01,0

002,000

3,0004,000

5,0006,000

Source: EmiratesSource: Emirates

81

80

79

78

77

76

75

74

73

14

12

10

8

6

4

2

0

2007/08

2007/08

2008/09

2008/09

2009/10

2009/10

2010/11

2010/11

2011/12

2011/12

(PERCENTAGE)(PERCENTAGE)

73

74

75

76

77

78

79

80

81

0

2

4

6

8

10

12

14

EMIRATES PASSENGER SEAT FACTOREMIRATES PROFIT MARGIN

$32bnEstimated cost for DWC development

DUBAI AVIATION

12-13 DA Infographic v2.indd 12 24/03/2013 14:24


(MILLION) (MILLION TONNES)

0 5 10 15 20 25 30 35 0.0 0.5 1.0 1.5 2.0

EMIRATES PASSENGERS CARRIED EMIRATES CARGO CARRIED EMIRATES REVENUE BY REGION*

Source: Dubai Airports*=Dubai International. Source: Dubai Airports

CONCOURSE 3 IN NUMBERSAIRPORT TERMINAL USAGE*

Source: Emirates Source: Emirates *=2011/12. Source: Emirates

2011/12

2010/11

2009/10

2008/09

2007/08

2011/12

2010/11

2009/10

2008/09

2007/08

0 05 0.510 1.015 1.520 2.025 30 35

Source: Emirates

Source: Emirates

Source: Dubai Airports

*=2011/12. Source: Dubai Airports

100

90

80

70

60

50

6

5

4

3

2007/08

2007/08

2012

Jan

2008/09

2008/09

2013

Feb

2009/10

2009/10

2014

Mar

2010/11

2010/11

2015

Apr

2011/12

2011/12

2016

May

2017

Jun

2018

Jul

2019

Aug

2020

Sep Oct Nov Dec

50

60

70

80

90

100

3000000

4000000

5000000

6000000

EMIRATES FLEET

EMIRATES DESTINATIONS SERVED

DUBAI INTERNATIONAL CAPACITY

DUBAI INTERNATIONAL TRAFFIC*

East Asia and Australasia

EuropeWest Asia and Indian Ocean

Americas

Gulf and Middle East

Africa

29.6

27.711.5

10.910.3

10

%

(MILLION PASSENGERS)

(MILLION PASSENGERS)

2011 2012

Cost to construct $3.3bnArea (sq m) 528,000A380 gates 20Other gates 2Remote stands 13Airline counters 50Retail space (sq m) 11,000Hotel rooms 202

Terminal 1 Serves all airlines

Terminal 2 Serves scheduled, chartered and

pilgrimage fl ights

Terminal 3 Dedicated for use by Emirates and Qantas

DWC=Dubai World Central Source: Dubai Airports

IN NUMBERS

2.5million tonnes a year Dubai International cargo capacity

12million tonnes a year DWC (when completed) cargo capacity

3.7million tonnes a year Memphis International (the airport with the current largest capacity)

99 99 102 111 122

169

148142127

109

109127142148169

12-13 DA Infographic v2.indd 13 24/03/2013 14:37


dubai aviation

Partners delivering the vision

Dubai Airports and Dubai Aviation Engineering Projects speak to MEED

pace of development. Despite being only two and a half years into its Strategic Plan 2020, which outlined a $7.8bn programme to deliver 90 mil-lion passengers a year through Dubai by 2020, Dubai Airports’ passenger volumes are ahead of expectations. In 2012, 57.6 million passengers passed through Dubai and 66 million are forecast this year.

Long-term strategy “We have lifted aspiration to 100 million passen-gers by 2020,” says Dubai Airports’ chief execu-tive officer (CEO) Paul Griffiths. And plans are already well advanced to take Dubai’s aviation sector much further.

“We are currently planning for 200 million passengers by 2045,” says DAEP CEO Suzanne al-Anani. “The 2020 plan is almost outdated. We are currently finalising a major sensitive study on Strategic Plan 2045. We are preparing for a major presentation to the aviation sector

So successful has been the development of Dubai’s aviation sector over the past two decades that today it contributes about 28 per cent of the emirate’s economic output. That figure is expected to top 32 per cent and account for 22 per cent of total employment by 2020. This does not include the significant contribution the aviation sector makes to Dubai’s hotel and tour-ism industry.

Despite 20 years of success for the emirate’s aviation programme, there will be no let-up in the

Looking down from the motorway flyover that sweeps over Dubai’s busy Airport

Road towards the headquarters of Dubai Aviation Engineering Projects (DAEP), one is presented with a physical metaphor of the organisation behind the development of Dubai’s spectacular aviation infrastructure.

Sitting at the southern boundary of Dubai’s enormous international airport complex, the com-pact, modern office building that mirrors the archi-tectural curves of the nearby airport terminals is integrated into the airport’s activities, but does not disturb them.

The building is surrounded by construction work to develop new, expanded aircraft parking stands, just as DAEP sits at the heart of one of the world’s biggest airport development programmes.

Working hand-in-glove with its sister organisa-tion, Dubai Airports, DAEP has helped Dubai Inter-national become the world’s third-busiest airport, with more than 56 million passengers passing through its halls in 2012.

Over the past two years, the partnership between Dubai Airports and DAEP has executed a $7.8bn capital investment programme to deliver two concourse buildings at the airport and a raft of major associated facilities. It has built two terminals at the new Al-Maktoum Inter-national. January saw the opening of the world’s first purpose-built terminal for handling the huge A380 superjumbo aircraft manufactured by Europe’s Airbus consortium.

Significant steps The next landmark will be achieved on 31 March, when Australian airline Qantas officially begins operations from Dubai after announcing in Sep-tember that it was relocating its hub from Singa-pore to better serve long-haul traffic between Europe, Asia and Australia.

Each breakthrough represents an important strategic success for Dubai’s ruler, Sheikh Mohammed bin Rashid al-Maktoum, and for Dubai’s aviation sector, led by Sheikh Ahmed bin Saeed al-Maktoum, president of Dubai Civil Avia-tion Authority, chairman of Dubai Airports, and chairman and chief executive of Emirates airline. They are significant steps on the road to delivering the vision of Dubai becoming the world’s biggest hub for transportation. ph

oto

gr

aph

: ch

ito

pac

hic

a

Al-Anani: Dubai Aviation Engineering Projects CEO is planning for future passenger capacity of 200 million

“We examine statistics, conduct sensitivity studies and have forums that capture the issues likely to affect growth”Suzanne al-Anani, DAEP

14-16 DA INTERVIEW.indd 14 24/03/2013 16:02


pho

tog

rap

h: c

hit

o p

ach

ica

pho

tog

rap

h: c

hit

o p

ach

ica

Griffiths: Dubai Airports CEO wants Dubai International to be the global leader in terms of passenger numbers

board in May for Strategic Plan 2045, where we will get direction on the way forwards.”

The 200 million goal is a huge target, and achiev-ing it will require significant levels of investment in airport infrastructure, services and capacity. But Griffiths and Al-Anani say it is the only way they can deliver on the mission statement handed to them by Sheikh Ahmed, a goal that is simple, yet daunting.

“Suzanne and I work under just one very clear directive from His Highness Sheikh Ahmed, and that is not to constrain the growth of the aviation sector in Dubai,” says Griffiths. “That is our very simple, significant, single objective.”

Airport infrastructure It is a daunting challenge that Dubai Airports and DAEP tackle as lead partners in a wide-ranging group of aviation sector stakeholders that range from the airlines through to Dubai Police.

“It is a lot of pressure,” says Al-Anani. “But it has been like that for a long time. I think we are becoming addicted to it.”

Understanding the impact of airport infrastruc-ture on passenger growth requires constant track-ing of passenger trends and data on passenger forecasts and passenger growth.

“We are always examining statistics and con-ducting sensitivity studies, and we have regular forums that capture all the issues likely to affect growth, such as any changes in legislation, Emir-ates’ plans and so on,” says Al-Anani.

The findings of these studies are then reviewed every quarter at high-level aviation sector board

In conjunction with Dubai’s focus on the develop-ment of its aviation industry as central to its eco-nomic strategy, global changes in aviation patterns have been a key factor in the emirate’s emergence as a world-scale aviation hub. These changes are driven by the growth in long-haul travel between Asia, Europe and Africa for business and tourism.

“The global aviation market has changed signifi-cantly the past few years, enabled by changes in aircraft technology,” says Paul Griffiths, chief execu-tive officer of Dubai Airports. “It is interesting to look at the different approaches being taken by the two main manufacturers, Airbus and Boeing.”

Airbus is a proponent of increasing aircraft capacity and has developed the A380 to take more passengers per movement. The manufac-turer is now considering developing an even larger A380-900, a plane that can carry 600 to 700 peo-ple. “It is quite amazing,” says Griffiths. “Airbus has designed the A380 to be stretched.”

The alternative approach, from US manufac-turer Boeing, is to stretch the range and capability

of existing aircraft. Its 777 series is one of the most successful long-haul planes to date, capa-ble of up to 18-hour flights. “The only place you can’t get to in a non-stop flight from Dubai is Hawaii,” says Griffiths.

But in developing a smaller 787 aircraft, Boeing has gambled that hub airports will not be the way the market will develop, and that growth will come from smaller aircraft flying longer distances with smaller passenger numbers, direct-to-destination. This market is growing, but Dubai is focused on the hub model.

“Because of its geocentric location, Dubai is not espousing [the Boeing] model,” says Griffiths. “One third of the world’s population is within four hours’ flying time, and two thirds within eight hours. So from its geocentric location, with high-capacity aircraft flying longer distances, Dubai is now a real force in global aviation. There is a real logic to connecting through Dubai.”

The emirate’s strategy is, therefore, centred on growing its share of global long-haul traffic. “It is

about increasing the popularity of Dubai as a desti-nation for commerce and tourism,” says Griffiths. “But it is also about making Dubai’s infrastructure and services so good and so capable that it is the hub of choice. Probably by 2015, Dubai will be the world’s number one airport in terms of interna-tional passenger traffic. With the infrastructure and services and people, we also want to be number one for service as well as volume.”

Another key factor that will enable Dubai to respond more quickly to market trends than its rivals around the world is the speed at which stra-tegic decisions can be taken.

“Look at what Heathrow had to deal with,” says Griffiths. Its Terminal 5 was 10 years awaiting planning permission and six years to build. We can make decisions even bigger than a new termi-nal and they are usually approved within the meet-ing. In fact, the 2020 plan, which is a $7.8bn pro-gramme, was approved in one meeting, where we made a joint proposal to raise passenger num-bers from 42 million a year to 90 million a year.”

Becoming the world’s numBer one airport By 2015



pho

tog

rap

h: c

hit

o p

ach

ica

“Time and money are against us so we have to come up with efficient designs, fast delivery and value engineering”Suzanne al-Anani, DAEP

Dubai aviaTion

Partners: Griffiths and Al-Anani aim to fast-track projects at Dubai and Al-Maktoum airports

meetings. “We have been providing infrastructure to this airport for more than 20 years, and it is never going to stop,” says Al-Anani. “But the bench-mark is becoming higher. With the delivery of con-course A [formerly concourse 3], it is now the end of this phase of expansion. But with the latest growth expected for Dubai International airport, Emirates airline and the other foreign airlines, we have a very big task very quickly to provide enough infrastructure, so that we do not hinder growth in the aviation sector.”

Such is the rapidly accelerating pace of growth in Dubai’s aviation sector, that Griffiths and Al-Anani find themselves looking further and fur-ther ahead to develop their plans.

“You start with a forecast and work back,” says Griffiths. “We are looking 32 years ahead. It starts with projecting likely traffic numbers, and by assessing what market share Dubai could cap-ture. So we sit down mostly with Emirates and [local low-cost carrier] FlyDubai, but also with input from some of the other airlines that operate here.”

High target While Emirates and FlyDubai represent more than 60 per cent of Dubai International’s traffic, they have been the catalyst for other carriers to fly through Dubai, and today more than 150 airlines operate in the emirate. Emirates has about 90 A380s on order, and this number may rise further.

Al-Anani says there are two primary areas to work on in meeting the required passenger levels. The first is maximising airfield capacity through major infrastructure development. The second is building terminal capacity and developing the pas-

senger processing systems inside the terminals. To meet its target of 200 million passengers a year by 2045, Dubai Airports will accelerate the development of its new complex – Al-Maktoum International airport – at Jebel Ali, close to the bor-der with neighbouring Abu Dhabi.

“We can accommodate more than 100 million passengers at Dubai International airport,” says Al-Anani. “And until we have substantial capacity at Al-Maktoum International airport, we have to do capacity enhancement at Dubai International air-port. Strategic Plan 2020 contains airfield improve-ments, modifications of stands to suit A380s, con-course A, concourse D [formerly the planned con-course 4], Terminal 1 modifications, and upgrading and enhancing capacity at Terminal 2 for FlyDubai and others, as well as a lot of other facilities. So we have to work on very fast-track provisions here.

“Of course, time and money are against us so we have to come up with efficient designs, fast delivery and value engineering. In addition, we have a passenger terminal at Al-Maktoum International airport currently undergoing operational readiness [trials],” she adds. Central to the plan is the migra-tion of Emirates to Al-Maktoum International.

“Emirates will outgrow [Dubai International] air-port and will have to move,” says Griffiths. “So 2025-27 is the current target date for the new airport to have capacity.”

One of the key challenges in sustaining the enormous capital investment programme is ensuring funding is available. Since the 2008 global financial crisis, it has become far more expensive to raise capital on the debt markets, especially since Dubai is already carrying signifi-cant obligations.

“There is no doubt about it,” says Al-Anani. “There is a big challenge that will govern the pace of development, but it will not limit. DAEP is working on options for financing, together with the concerned government departments. We usu-ally work with government agencies to ensure financing is raised. Cash flow is worked on jointly, along with master planning. Phasing is also worked on jointly.”

Funding development According to the 2020 plan, rising passenger numbers will boost commercial revenues that will be used to fund the development.

The Department of Finance is the engine of the financial train in the aviation sector, and the avia-tion sector’s contribution is fundamental to Dubai’s economy,” says Griffiths. “So there is a cycle where the aim is to provide capacity for the sector to grow, and the more it grows the more can be reinvested. It is a good financial model.”

Last year, the government raised finance through several vehicles to help fund the airport’s development. In April 2012, it raised $1.25bn in a sovereign sukuk (Islamic bond) that Sheikh Ahmed said would be used to fund expansion at the airport.

In June 2012, Dubai Duty Free (DDF), which is owned by Dubai sovereign wealth fund Investment Corporation of Dubai, raised $1.75bn from a group of 15 mostly local banks. The funds will be put towards the expansion of the airport. The deal was backed by cash flows from the retail out-lets operated by DDF, which announced annual sales of $1.6bn in 2012, a 10 per cent increase on the previous year.

Al-Anani says Dubai is unlikely to seek private developers to deliver its plans.

“For sure, there will be multiple models of financ-ing employed by the government, but we will never go into finance-and-operate models,” she says. “The government will always want total ownership of its assets; I don’t think the government is look-ing at anything like [public-private partnerships].”

Rather, DAEP and Dubai Airports will continue to work hard, but seamlessly, together to deliver Dubai’s aviation vision.Richard Thompson



dubai aviation

EmiratEs Dubai’s flagship airline is set to continue its aggressive growth

ciples. Since its third year of operation the carrier has reported an annual profit and regularly paid substantial dividends. Revenue crossed the $16bn mark for the first time in 2011/12, grow-ing 16.2 per cent on the previous year.

The company’s business model has to with-stand pressures beyond its control, particularly jet fuel costs. Its fuel bill more than doubled over the past two financial years, drastically slashing net profits, from $1.6bn in 2010/11 to $629m in 2011/12. But this remains a strong result in today’s market, with many carriers struggling to stay in the black.

This performance is all the more impressive in light of the continued growth in Emirates’ traffic volumes and heavy fleet and route investment. The airline’s load factor – the proportion of availa-ble seats that are occupied – has remained at a healthy 80 per cent. Cargo volumes have also held steady over the past two years, at 1.8 mil-lion tonnes a year, despite troubled international economic conditions.

Ambitious plansInvestment continues apace. Emirates’ fleet is one of the youngest in the industry, with an aver-age age of only 79 months. The airline has 200 aircraft on order, worth almost $73bn (59 A380s and 70 A350s from Airbus and 71 Boeing 777s). This total does not even take options for further purchases into account, reflecting the airline’s ambition to continue to grow rapidly.

Emirates has made a name for itself by being one of the leading purchasers of the most mod-ern aircraft, such as the A380 ‘super jumbo’ and the Boeing 777, giving the airline a reputation for passenger comfort and operational efficiency, notably in the use of fuel and airport take-off and landing slot capacity.

The company has made the quality of cabin service a priority, for both economy passengers and higher-fare-paying first and business class customers, and its high-profile commercial part-nership deals have given the Emirates brand glo-bal reach. Striking this successful balance of service quality and value for money under a name that is well recognised reinforces the airline as an international brand that can only be described as a global success.Paul Melly

centred its operations on Dubai, transforming the city into a major travel hub and leveraging its loca-tion between Europe and Asia. Today, Emirates serves 122 destinations in more than 70 coun-tries, attracting transit passengers keen to take advantage of its global route network to Australa-sia, Africa and the Americas. In 2011/12, Emir-ates carried 34 million passengers, up from 31.4 million in the previous 12 months as it continued to add new destinations and increased frequen-cies on other routes. In 2011/12, the most popu-lar region served by Emirates was East Asia and Australasia; the Middle East is the source of only about a tenth of its revenues.

Fuel efficiency has also supported the growth of the network, enabling Emirates to launch serv-ices to smaller destinations that might not be via-ble for a rival carrier. Algiers and Warsaw are the latest additions to the network, with services started this year. Flights to Tokyo Haneda and Clark in the Philippines will be launched later in 2013. Recent months have also brought increases in capacity on routes to Paris, New York, Perth, Adelaide, Sydney and Moscow.

Emirates’ strategy is steered by chief executive officer (CEO) Tim Clark, executive vice-chairman Maurice Flanagan – who was the founding CEO – and chairman Sheikh Ahmed bin Saeed al-Mak-toum, who is also chairman of low-cost carrier Fly-Dubai and Dubai Airports. The Emirates Group includes both Emirates airline and the air service and travel management company Dnata, which had its most profitable year in 2012.

Self-sustaining financial discipline has always been one of Emirates’ fundamental business prin-

In less than 30 years, Emirates airline has established itself within a competitive glo-

bal market to become a multi-award winning, 169-strong-fleet carrier with annual revenues exceeding $16bn. From humble beginnings, it has grown to be a brand ambassador for Dubai and the sponsor of major international sporting teams and events. Much of the expansion work at Dubai International airport has been to keep pace with the break-neck growth of Emirates.

The airline was established in 1985 by the government of Dubai with a start-up capital of $10m and just two airplanes. Its inaugural flight departed from a small runway bound for Kara-chi, Pakistan.

National carrierPreviously, Gulf Air had been the shared national airline of Bahrain, Oman, Qatar and the UAE. The UAE’s withdrawal from the travel treaty was a severe blow to Gulf Air and its decline since then stands in stark contrast to the rise of Emir-ates. It also paved the way for Qatar and Oman to exit the share agreement, as governments opted to follow Dubai’s example and create their own carriers.

Dubai benefited from first mover advantage and focused its business strategy on developing an untapped route network. The airline, in con-trast to the 1970s’ Gulf Air share agreement, Ph

oto

gr

aPh

: sh

utt

Ers

toc

k

Emirates: Fleet investment continues apace

Date established October 1985Website www.emirates.comTel (+971) 4 708 1111Chairman Sheikh Ahmed bin Saeed al-MaktoumChief executive officer Tim ClarkFleet Airbus: 23 A330-200s, 7 A340-300s, 10 A340-500s, 31 A380-800sBoeing: 9 777-200s, 10 777-200 LRs,12 777-300s, 86 777-300 ERs, 7 777-Fs,2 747-400Fs, 1 747-400 ER FPlanes on order Airbus: 50 A350-900s,20 A350-1000s, 59 A380-800sBoeing: 65 777-300 ERs, 6 777-FsPassengers 2012: 34 millionCargo 2012: 1.8 million tonnes

18 DA Emirates.indd 18 24/03/2013 11:41


pho

tog

rap

h: g

allo

/gEt

ty iM

agEs

Some 24 years after the launch of Emirates airline, the Dubai government established

the low-cost carrier FlyDubai, following a global trend to offer budget options on popular routes. The airline began operations in June 2009. It is headed by chief executive officer Ghaith al-Ghaith, and the chairman is Sheikh Ahmed bin Saeed al-Maktoum, who holds the same role at Emirates and Dubai Airports.

Previously, Sharjah-based Air Arabia was the only low-cost carrier in the UAE. FlyDubai has quickly won market share from its rival, building on the advantage of being based in Dubai.

Today, FlyDubai serves 53 destinations and employs more than 1,500 staff. It added nine routes last year, and in 2013 has already launched services to Sri Lanka, the Maldives, Hail in Saudi Arabia, and Multan and Sialkot in Pakistan. In April, it will begin flying to Juba in South Sudan. At least 30 of FlyDubai’s routes did not have direct links to Dubai before, or were not served by Emirates.

Aircraft usageFlyDubai operates more than 1,000 flights a week, adhering to the low-cost carrier principle of keeping as many planes as possible in the air at any one time. According to the US’ Honeywell, the airline has one of the highest aircraft utilisa-tion rates in the industry, at 13-16 hours a day.

Between its launch and February 2013, FlyDu-bai carried 10.4 million passengers. Last year was its strongest performance by far with 5.1 million passengers carried as the airline expanded its services in the GCC and the Commonwealth of Independent States (CIS). Passenger numbers within the GCC network grew by 63 per cent in 2012, compared with 21 per cent for all airlines, establishing the carrier as the second-largest airline by passenger numbers to operate out of

Flydubai The low-cost carrier has quickly taken market share from its rival

Date established March 2008Website www.flydubai.comTel (+971) 4 231 1000Chairman Sheikh Ahmed bin Saeed al-MaktoumChief executive officer Ghaith al-GhaithFleet 28 Boeing 737-800 NGsPlanes on order 22 Boeing 737-800 NGsPassengers 2012: 5.1 million

Dubai International. In the CIS, one of FlyDubai’s strongest markets, its passenger numbers rose by 72 per cent in 2012; the total market in that region grew by 28 per cent.

FlyDubai operates from Terminal 2 at Dubai International airport, which is being expanded to accommodate the airline’s growth. In the long term, the carrier is expected to move to the new Al-Mak-toum airport. In 2008, FlyDubai ordered 50 Boeing 737-800 NG aircraft; to date it has taken delivery of 28. A further six will arrive in 2013 and the rest are due by 2016. In February, Sheikh Ahmed said

the airline was considering the purchase of an addi-tional 50 new aircraft, including A322 planes from French supplier Airbus. The airline has raised $1.2bn in financing to buy its current fleet.

FlyDubai’s services are unbundled, with extras such as check-in baggage, in-flight entertainment and food charged separately. In 2012, this income accounted for 16.5 per cent of revenues. Total revenue for the year was $756m and net profit was $41.4m. It was the first year since launch that FlyDubai returned a profit.Austyn Allison

source: FlyDubai

gECas=gE Capital aviation services (Us); BBaM=Babcock and Brown aircraft Management (australia); MCap=Mitsubishi Corporation aviation partners (Japan). source: FlyDubai

60

50

40

30

20

10

0

Jun 2009

sep 2009

Dec 2009

Mar 201

0

Jun 201

0

sep 201

0

Dec 201

0

Mar 201

1

Jun 201

1

sep 201

1

Dec 201

2

Mar 201

3

(number oF routes)

0

10

20

30

40

50

60

destinations served aircraFt Financing deals

Air traffic: FlyDubai has carried 10.4 million passengers since operations were started in June 2009

DateValue ($m) Description

Jul 2009

320 Deal to finance four aircraft with gECas

Nov2009

160 Financing deal signed at Dubai airshow

Sep 2010

720 Deal with gECas and BBaM to finance nine aircraft

Nov 2010

320 Deal with avalon to finance four aircraft

May 2011

80 Deal to finance remaining 2011 aircraft with MCap

Nov 2011

170 Deal to finance first two aircraft of 2012

May 2012

172 Deal with standard Chartered’s pembroke to finance two aircraft

Oct 2012

117.5 loan guarantee from Ex-im Bank of the United states to purchase two aircraft

19 DA Flydubai.indd 19 24/03/2013 11:40


dubai aviation

for future revenue growth. With the further expan-sion of the airport, the firm is targeting sales of nearly $3bn a year by 2020 and expects to employ about 8,000 staff.

DDF operates 18,000 square metres of retail space over three terminals. Concourse 3, which opened in January 2013, added 11,000 sq m, as will concourse 4, due for completion in 2016. Following the opening of concourse 3, the capacity of Dubai International has grown to 75 million pas-sengers a year. Concourse 4 will boost capacity to 95 million.

DDF will also operate the retail outlets at Al-Maktoum International, which is planned to be the world’s largest airport with a capacity of 160 million passengers, five runways and 64,000 sq m of retail space upon completion. Cargo flights have already begun at the airport in Jebel Ali, but commercial flights are unlikely for several years due to the ongoing expansion of the existing airport.

Resilient modelDDF’s success hints at an underlying resilience in Dubai’s economic model and its ability to bounce back from adversity. The company saw sales con-tinue to grow during the 1990-91 Gulf war, after the 11 September 2001 terrorist attacks on the US and during the global financial crisis.

“We did feel it, but our spend per head didn’t go down,” says McLoughlin. “We do two things here fairly well in comparison with other airports. One is our spend per head continues to increase every year – our average spend is $47. The other is our penetration. If you [look at] Heathrow or Gatwick they sell to 17-18 per cent of departing passengers, we sell to 49 per cent.”

Although a recruitment freeze was imposed, DDF was not forced to lay off staff and sales growth quickly accelerated to 11 per cent in 2010 having fallen to 3.6 per cent in 2009.

Strong sales growth is forecast for 2013 follow-ing the opening of concourse 3. The first quarter of this year saw DDF recruit 1,053 new staff to operate the new retail spaces. Elizabeth Bains

uct and sustains more than 240,000 jobs. DDF alone accounts for 2 per cent of GDP. The retailer (which is now part of Investment Corporation of Dubai) is the lead financier of the construction of concourse 4.

“Rather than just hand the money over to the government, our revenues have always been ploughed back into expanding the airport, but this time with concourse 4, things are being done more formally,” says McLoughlin. In the wake of Dubai’s debt restructuring, questions had been raised over the emirate’s ability to raise further funding. With the commercially suc-cessful DDF approaching lenders, few problems are expected, particularly as it has a clear map

Few companies reflect the meteoric rise of Dubai as a tourism destination as well as

Dubai Duty Free (DDF). Established in 1983, the state-owned airport retailer has grown from being a $20m business with 100 staff, to a world leader with sales of $1.6bn last year and more than 5,600 employees. In 29 years, the company has doubled its sales figures six times and expects to double them again by 2018/19.

When the duty-free operation opened, just 3 million passengers a year were using Dubai airport and Emirates airline had still to be founded. Today, Dubai International airport ranks among the busiest in the world, handling 57.6 million passengers in 2012 – a figure expected to rise to 98 million by 2020.

About 161 airlines now use the airport, serv-ing about 260 destinations.

DDF has done more than expand with Dubai, it has had a direct influence in steering the growth of the emirate and its hospitality sector.

Marketing Dubai“We were expected right from the beginning to help promote and market Dubai, which we have done in various ways over the years,” says Colm McLoughlin, executive vice-chairman of DDF. “We started a tennis tournament 21 years ago and it has become one of the premier tennis tournaments in the world.” DDF built the Dubai Tennis Stadium and the surrounding entertain-ment complex in Garhoud.

The retailer has played a leading role in devel-oping the notion of Brand Dubai, as the sponsor of the Dubai World Cup, the Dubai Desert Classic golf tournament, the film and shopping festivals, and of horse races overseas. It spends about 3 per cent of its turnover on promotion, marketing and sponsoring events.

McLoughlin was one of the original group sec-onded to Dubai by the Irish Civil Aviation Authority, which was contracted by the Dubai government to set up the duty free operation. He also sat on the steering committee that established the Depart-ment of Tourism and Commerce Marketing, the body tasked with promoting the emirate.

DDF has also helped finance the expansion of Dubai International airport and the growth of the aviation sector, which today accounts for 29 per cent of the emirate’s gross domestic (GDP) prod-

dubai duty Free The company continues its rise as a world-class airport retailer

1984

1987

1990

1993

1996

1999

20052002

2008201

2

Sources: Dubai Duty Free; MEED

Perfumes

Liquor

Gold

Electronics

ConfectioneryWatches

Cosmetics

Other

15

14

11877

6

32

%

dubai duty Free SaleS

dubai duty Free SaleS by type, 2012

Source: Dubai Duty Free

1,600

1,400

1,200

1,000

800

600

400

200

0

($m)

(percentage oF $1.6bn)

0

200

400

600

800

1000

1200

1400

1600

■ This article first appeared in MEED Vol 56 No 16, 20-26 April 2012. All relevant figures have been updated.

21 DA Dubai Duty Free v2.indd 21 24/03/2013 11:40


dubai aviation

Sheikh Ahmed bin Saeed al-MaktoumPoSition Chairman, Dubai AirportsBiogrAPhy Sheikh Ahmed bin Saeed al-Maktoum

is the chairman of Dubai Airports, chairman and chief executive officer (CEO) of Emirates Group, and president of Dubai Civil Aviation Authority. He has spearheaded Dubai’s rapid growth into a glo-bal travel hub with one of the world’s busiest air-ports for international passenger and cargo traf-fic. Sheikh Ahmed began his career in the aviation industry in 1985, when he was appointed presi-dent of the Dubai Department of Civil Aviation, the governing body that oversaw the activities of Dubai International airport. Under his leadership, the aviation authority went through a restructuring in April 2007, which resulted in the creation of the Dubai Civil Aviation Authority as the local regula-tory body and Dubai Airports as the owner and operator of the emirate’s airports. Sheikh Ahmed has a bachelor’s degree in political science from the University of Denver in the US.

ContACt Tel: (+971) 4 216 6916

Paul griffithsPoSition CEO, Dubai AirportsBiogrAPhy Paul Griffiths was appointed CEO of

Dubai Airports in October 2007. He is responsible for the operation and development of Dubai Inter-national airport. He also oversees Dubai World Central’s Al-Maktoum International airport, which partially opened in 2010 and is expected to cater to 160 million passengers and 12 million tonnes of freight a year once fully operational. The Al-Maktoum airport is part of Dubai Airports’ $7.8bn strategic plan for 2020 that aims to see Dubai become a global aviation hub for passen-gers and cargo. Griffiths oversaw the launch of Dubai International’s Terminal 3 in 2008, a year after joining the firm. Before moving to Dubai in 2007, he was the managing director of London’s Gatwick Airport from 2004. Griffiths also worked with the UK’s Virgin Group for 14 years. In the 1980s, he worked for several years in Hong Kong developing the marketing and commercial plan-ning for then start-up airline Dragonair.

ContACt Tel: (+971) 4 216 6916

tim ClarkPoSition President, EmiratesBiogrAPhy Tim Clark has been president of

Emirates airline since 2003. Prior to this, Clark had been head of route planning at the carrier since 1985. Before joining Emirates, Clark worked at Gulf Air in Bahrain for four years, and previously at the now defunct British Caledonian, which he joined in 1972. In April 1998, Clark was appointed managing director of SriLankan Airlines following Emirates’ acquisition of a major stake in the carrier. But when Emirates sold its stake in the airline to the Sri Lankan government, the Dubai carrier did not renew its management contract. As well as his duties as president of Emirates airline, Clark was instrumental in creating the Emirates Airline Foundation, a non-profit charity organisation of which he is chairman. Clark is an economics graduate from London University and a fellow of the Royal Aeronautical Society.

ContACt Tel: (+971) 4 295 1111

Maurice FlanaganPoSition Executive vice-chairman, Emirates

GroupBiogrAPhy Maurice Flanagan was appointed

executive vice-chairman of Emirates Group in 2006. Prior to this, he was vice-chairman and group president from 2003 after his appoint-ment as group managing director of the Emir-ates Group in 1990. Flanagan began his aviation career in the Royal Air Force as a navigation officer. In 1953, he joined British Overseas Air-ways Corporation, the forerunner of British Air-ways, as a graduate trainee. He rose through a variety of overseas posts, returning to the UK in 1965 as a route planning manager for the airline. He joined British Airways’ senior manage-ment team in 1974. In 1978, Flanagan left the UK again to become director and general man-ager of air service and travel management com-pany Dnata, now a sister company of Emirates. He was then employed by the Dubai government to launch Emirates as its managing director in 1985.

ContACt Tel: (+971) 4 295 1111

ghaith al-ghaithPoSition CEO, FlyDubaiBiogrAPhy Ghaith al-Ghaith has been CEO of

Dubai’s budget carrier, FlyDubai, since its launch on 1 June 2009. Before this, Al-Ghaith was executive vice-president for commercial operations worldwide for Emirates for 14 years. He was previously senior general manager of commercial operations in the Middle East, Africa & Commonwealth of Independent States from 1994. Al-Ghaith joined Emirates as a man-agement trainee in 1986. He became deputy passenger sales manager for the UAE in 1988, then deputy manager for overseas develop-ment and marketing in 1989. Al-Ghaith was appointed area manager for the UK and Ireland in 1991, then general manager for commercial operations for Europe and North America in 1993. In his current role, Al-Ghaith works closely with chairman Sheikh Ahmed bin Saeed al-Maktoum. He has a bachelor’s degree in business administration from the University of Arizona in the US.

ContACt Tel: (+971) 4 341 5555

Colm McLoughlinPoSition Executive vice-chairman, Dubai Duty FreeBiogrAPhy Colm McLoughlin was appointed Dubai

Duty Free’s executive vice-chairman in July 2011. He was a member of the consultancy team from Aer Rianta, the Irish Airport Authority, contracted by the Dubai government to launch the duty free operation in the emirate in 1983. McLoughlin remained in Dubai, along with George Horan, as general manager of the new operation, later becoming managing director. At the same time, Horan was named president, with responsibility for the day-to-day running of the operation. Under his leadership, Dubai Duty Free has grown dra-matically over the past 30 years and recorded sales of $1.6bn in 2012. Dubai Duty Free will also run the duty free operation at Al-Maktoum International once it commences passenger operations. McLoughlin also has responsibility for Dubai Duty Free’s subsidiary businesses, which include The Irish Village, The Century Vil-lage, the Dubai Tennis Stadium, and the Jumei-rah Creekside Hotel, which opened in 2012.

ContACt Tel: (+971) 4 601 9225

dubai aviation Six key individuals responsible for developing

the emirate into a global aviation hub

22 DA MEED List v2.indd 22 24/03/2013 11:39

a celebration of dubai aviation - meed-130809-sr...

Documents