Dubai Airports IPO would be 'successful' if shares were listed, CEO says

The government-owned asset has a P/E ratio 'in the 20s' and would be attractive to institutional investors

If Dubai were to sell a stake in its airport, the world's busiest international hub for 10 years in a row, it would be a success and would likely attract international institutional investors, Dubai Airports' boss said.

“Airports are an attractive proposition, we have price-to-earnings ratios in the twenties, which are very, very attractive,” Paul Griffiths, chief executive of Dubai Airports, told The National.

“If we were ever the subject of an IPO, I'm sure it would be successful,” he said, emphasising that such a decision is ultimately in the hands of the government shareholder.

Asked if listing the government-owned asset would attract demand from international investors, Mr Griffiths cited the example of major global centres such as London Heathrow, Europe's busiest airport, that has attracted foreign institutional investors including Qatar Investment Authority and Saudi Arabia's sovereign wealth fund Public Investment Fund (PIF).

“There's been a lot of institutional investment in airports because they are seen as blue chip utilities and fairly dependable in terms of their delivery of constant turnover and profitability,” Mr Griffiths said.

Dubai Airports and its home carriers Emirates and flydubai are the crown jewels of the emirate's aviation-fuelled economy.

Dubai's aviation sector is forecast to account for 32 per cent of the emirate's economy and account for one in four jobs by 2030, according to a 2024 study by Oxford Economics, commissioned by Emirates Airline and Dubai Airports.

The aviation sector will contribute Dh196 billion ($53.36 billion) to Dubai’s projected GDP and support 816,000 jobs in 2030, based on industry financial and passenger projections, according to the report.

This forecast is up from an estimated Dh137 billion, or 27 per cent, contribution to GDP in 2023, when the sector supported 631,000 jobs.

Construction of the passenger terminal at Al Maktoum International Airport (DWC) is expected to contribute Dh6.1 billion to Dubai's economy in 2030, equivalent to one per cent of its forecast GDP, and to create 132,000 jobs, the report said.

The Dubai government has approved designs for a new passenger terminal at Al Maktoum International Airport and has started construction at a cost of Dh128 billion. Photo: Dubai government via AP

Spread across 70 square kilometres, the new airport will be five times the size of the current Dubai International Airport. Photo: Dubai government via AP

Once complete, Al Maktoum International Airport will have "the world's largest capacity", reaching up to 260 million passengers. Photo: Dubai government via AP

The Al Maktoum International Airport will fully absorb Dubai International Airport’s operations within 10 years. Photo: Dubai government via AP

A satellite image shows the site of Al Maktoum International Airport. The airport will feature 400 gates, five parallel runways and new aviation technology. Photo: Planet Labs PBC via AP

Dubai slots cheaper than London Heathrow

The new airport will be capable of handling 260 million a year by 2050, according to Mr Griffiths.

State-owned Dubai Airports insists that aviation services must remain affordable at Al Maktoum International's new terminal once opened in 2032.

Dubai's current aeronautical charges are “incredibly reasonable” and its fees are one-eighth of the cost of landing a Boeing 777 wide-body aircraft at London Heathrow, Mr Griffiths said.

“Our aim is always to make aviation affordable in Dubai because we want the 104 airlines we've got to actually come here and get great service at a reasonable price,” he said. “We've got to be the engine of growth and you can't be that if you've overpriced your aviation infrastructure.”

Dubai authorities have the Herculean task of shifting operations from DXB to DWC in one move, rather than in phases.

Dubai Airports is working on a detailed operations plan for the move in 2032.

“We will have to very, very slick and allow nothing to go wrong,” he said. “We'll probably have to clear the roads on both sides to move all the equipment over and do it in the fastest possible time,” Mr Griffiths said.

Moving to the new airfield is the top priority as the land-constrained DXB approaches the limits of its maximum capacity.

By 2031, DXB will handle at least 114 million passengers and the existing infrastructure will be maxed out. “You'll see the bulges start appearing at the windows.”

DXB is forecast to handle 95.3 million passengers this year and hit the 100 million passenger mark in 18 months, he said.

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