Travel boom keeps $100b ME airport projects on track
$345b worth of new aircraft are on order by regional airlines
dubai — With the fast-growing air traffic across the Middle East far outstripping handling capacity at airports, the region’s $100 billion worth of airport projects are right on track despite the crippling effect of a substantial fall in oil income, according to aviation and construction industry experts.
The International Air Transport Association (Iata) is projecting that air passengers will grow by 4.9 per cent per year to 2034 in the Middle East. Such an exponential boom in air traffic in the region has also triggered massive fleet expansion by carriers, resulting in an order book close to 1,300 new aircraft with an estimated value of $345 billion — and the bulk of which is scheduled to join the fleets of UAE-based airlines, according to Meed’s industry report, ‘Aviation and Airports 2016’.
The airport projects, at various stages of implementation, are part of the $2 trillion construction activities in the pipeline in the GCC, where the market is still “attractive” despite a forecast 17 per cent decline in contract awards this year following a plunge in oil income.
According to Deloitte, construction activity is strongest in Saudi Arabia and the UAE. “Despite the uncertainty and likely contraction in 2016, the GCC region will continue to offer $2 trillion worth of opportunities and be an attractive market for businesses anywhere in the world,” a Deloitte report noted.
The on-going airport projects, including new developments and expansion of existing facilities, are intended to address a capacity gap as air passenger volumes across the Middle East outstripped capacity by 11 per cent last year. “With these, an additional capacity of 400 million passengers a year can be accommodated across the region’s airports over the next 10 to 20 years,” said the Meed report.
Most of these projects are on track to be completed between the end of 2016 and 2020. These include Muscat International, Midfield Terminal Complex (Abu Dhabi), King Abdulaziz International (Jeddah) and the new passenger terminal at Bahrain International.
AIRCRAFT ON ORDER
The largest opportunities for contracting and sub-contracting companies are expected to come from the construction of the next phase of Al Maktoum International in Dubai, the further expansion of Jeddah airport, Hamad International airport expansion and the upgrade of airports in Iran.
Al Maktoum International Airport, currently budgeted at $32 billion and anticipated to be the biggest airport in the world, is set to have one of the world’s largest capacities at 160 million annual passengers.
Abu Dhabi International Airport is set to reach 40 million passengers by 2017 with the new Midfield Terminal. The new Muscat International Airport will handle around 12 million passengers annually, more than double its current strength. Sharjah Airport is also preparing for a phased expansion that will help double its existing capacity.
Kuwait awarded a contract worth $4.8 billion to a local company for the expansion of the country’s only international airport. The project involves a new terminal and a runway in addition to around 30 gates to boost the facility’s capacity from the current seven million passengers to 13 million in 2016.
The airport’s capacity is slated to increase to 25 million passengers by 2025. Bahrain International Airport is also set for an overhaul as it moves to upgrade its facilities and expand passenger capacity through an airport modernisation programme.
The Meed report said travel demand and the overall economic expansion programmes prior to the oil price decline have fuelled the rapid expansion in aircraft fleet and airport capacity.
Going forward, the staging of global events such as the Dubai Expo 2020 and 2022 Fifa World Cup in Qatar are also expected to boost the region’s profile as a travel and tourism destination.
“While Dubai’s Emirates Airline, Abu Dhabi’s Etihad Airways and Qatar Airways lead the region in terms of the value of on-order planes, most of the smaller airlines have put in place restructuring programmes to enable them to contribute to the expansion of each state’s economy in view of lower oil income and increased urgency to diversify their economies away from oil,” the report added. 40m passengers target set by 2017 by Abu Dhabi International Airport