Dubai to hold talks in December on airports' expansion strategy, top official says

Exclusive: Paul Griffiths, CEO of Dubai Airports, says the emirate is looking to boost capacity at Dubai International, the world's busiest hub

epa08002933 Planes sit on the tarmac during the first day of the Dubai Airshow 2019 at Al Maktoum International Airport in Jebel Ali, Dubai, United Arab Emirates, 17 November 2019. The airshow will run from 17 November to 21 November 2019. EPA/ALI HAIDERShow less

Operator Dubai Airports is planning to hold a meeting in December to discuss the way forward on the expansion of the Dubai International Airport (DXB) and the emirate's second hub Al Maktoum International Airport (Dubai World Central), its chief executive said.

The emirate is looking to boost capacity at Dubai International, the world's busiest hub, to 120 million passengers annually in 2023, up from 90 million currently, by "investing in technology to improve traffic flow, which will provide enough growth for the sector through to early-to-mid 2030s", Paul Griffiths, Dubai Airports chief executive, told The National. This will give "breathing space" to consider the ultimate design and development of Dubai World Central's phase two expansion to 120 million annual passengers.

"We've got a meeting next month to consider all the options and hopefully before the end of the year we may have some announcements to confirm the strategy. Its an integrated programme between the two," he said. "With DWC phase two we can take a pause for a while because the DXB strategy will fill in all the short-term capacity needs and the timescale for DWC phase two needs to be determined in the context of those decisions."

Dubai is the hub for Emirates, the world's biggest long-haul airline, which has used its position at a crossroads between Europe and Asia to develop an unparalleled network of intercontinental connections. Emirates, the biggest customer of the airport operator, carried 29.6 million passengers during the first half of the fiscal year and its passenger seat factor, which measures how many seats an airline can fill, rose to 81.1 per cent, from 78.8 per cent last year.

The integrated programme for the two airports "will give us breathing space to think about the ultimate design and development of DWC phase two and takes pressure off  having to invest for growth at DWC phase two because obviously investing in DXB is a far more effective strategy," he said.

The decision to end the A380 programme by Airbus, of which Emirates was a primary customer, does not have a direct infrastructure impact on DWC because the master plan is "aircraft-agnostic" to accommodate new trends in technology, Mr Griffiths said.

Dubai International expects its passenger tally this year to be approximately on par with last year’s traffic, clipped by weaker global air travel demand and operational challenges, but will remain the world’s busiest international hub.

A 45-day runway refurbishment in April that reduced capacity, the global grounding of Boeing's 737 Max since March and collapse of India's Jet Airways during the summer have impacted growth at the hub, Mr Griffiths said.

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Dubai Airshow 2019

epa08002933 Planes sit on the tarmac during the first day of the Dubai Airshow 2019 at Al Maktoum International Airport in Jebel Ali, Dubai, United Arab Emirates, 17 November 2019. The airshow will run from 17 November to 21 November 2019. EPA/ALI HAIDER

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"Those three events have had a depressive impact… it's clear the global air transport demand has softened significantly in last 12 to 18 months and we've seen the impact of that," he said.

Mr Griffithsexpects Dubai International to serve as many customers by the end of this year as it did in 2018.

“We had quite a positive October. Once November and December are through, we’re going to keep our fingers crossed that we will end up at least at parity to where we were in 2018,” he said. “It won’t be a blockbuster year for us because of those factors.”

While the rate of growth is slower than the double-digit expansion the company saw over the past decade, Dubai International will hold on to its title of the world’s largest hub for international travel, according to its operator.

“We’re still unassailably the largest international hub in world, and intend to be and will continue to be,” he said. There is no chance of any airport surpassing our position.”

Over the next few years the industry outlook forecasts growth of around 1.5 per cent to 1.7 per cent and expansion at Dubai International is likely be in line with that trend, Mr Griffiths said.

The Dubai Airports chief is bullish on prospects of future growth fuelled by Chinese passengers, despite a slowdown in the world’s second biggest economy, with a burgeoning middle-class eager to travel.

"If look at future trends in china, we believe 1.3 billion additional annual passenger journeys will be undertaken by customers starting and finishing in South-East Asia in the next decade or so, that will be very significant and we plan to increase our market share of that," Mr Griffiths said.

China’s economy is projected to slow down to 5.8 per cent this year from 6.2 per cent in 2018 in the wake of a trade war with the US, according to the International Monetary Fund, but Dubai International is seeing a surge in traffic from the country.

“We’re getting a lot more Chinese traffic than before and growth on those routes is still very positive and we expect that to continue,” he said. “The fact is that middle class in china, as they start to increase in wealth, will mean more travel and we’re well-placed to take advantage [of that].”