Dubai on Sunday approved designs for a new passenger terminal at Al Maktoum International Airport and began construction at a cost of Dh128 billion ($34.8 billion) as the emirate boosts airport capacity to meet growing travel demand.
Once complete, Al Maktoum International Airport will have "the world's largest capacity", reaching up to 260 million passengers, Sheikh Mohammed bin Rashid, Vice President and Ruler of Dubai, said on X.
It will be five times the size of the current Dubai International Airport, which is currently ranked the top globally for international passenger traffic.
It will "fully absorb Dubai International Airport’s operations in 10 years", Dubai Media Office said.
The airport, spread across 70 square kilometres, will feature 400 aircraft gates, five parallel runways, and new aviation technology. It will have the capacity to handle 12 million tonnes of cargo annually.
The first phase of the project is expected to be ready within 10 years, with a capacity to accommodate 150 million passengers annually.
The airport will offer public transport links including to the metro, bus and city air transport.
"As we build an entire city around the airport in Dubai South, demand for housing for a million people will follow. It will host the world's leading companies in the logistics and air transport sectors," Sheikh Mohammed said.
"We are building a new project for future generations ... Dubai will be the world's airport, its port, its urban hub, and its new global centre."
Dubai's aviation sector has made a strong rebound from the pandemic-induced slowdown and was among the first to reopen to international travellers, bolstered by a strong Covid vaccine programme and health guidelines.
Dubai International Airport (DXB), which handled 86.9 million passengers last year, a growth of 31.7 per cent annually, retained its spot as the world's busiest international hub for passengers for a 10th consecutive year, data by the Airports Council International this month showed.
The airport recorded a total of 416,405 flight movements in 2023, the highest on record at DXB, and is connected to more than 260 destinations through more than 100 international airlines.
This year, the airport expects to receive 88.8 million passengers, close to its previous record of 89.1 million in 2018.
DXB expects its annual passenger traffic to reach 93.8 million next year and “hopefully we'll get the magic 100 million number not long after”, Paul Griffiths, chief executive of Dubai Airports, told The National in February.
The boom in traffic comes amid rising travel demand despite inflationary pressures, concerns about economic headwinds and risks stemming from geopolitical tension.
The emirate is also recording strong growth in tourism.
Dubai reported its best annual tourism performance last year, when international arrivals to the emirate increased 19.4 per cent to 17.15 million. This exceeded the 16.73 million visitors in 2019, according to Dubai’s Department of Economy and Tourism.
As part of Dubai's economic agenda D33, the emirate aims to attract Dh100 billion in additional tourism investments and receive 40 million hotel guests in 2031.
"The new airport, which will ultimately be over five times the size of Dubai International, will prepare the ground for the next 40 years of anticipated growth in Dubai’s aviation sector," said Sheikh Ahmed bin Saeed, chairman of Dubai Aviation City Corporation and president of Dubai Civil Aviation Authority.
"It will respond to the hub airline ambitious plans in terms of fleet acquisition and passenger growth," said Sheikh Ahmed, who is also chairman and chief executive of Emirates Airline and Group.
The airport is also being designed to "strongly contribute to mitigate environmental emissions" and aims to achieve LEED gold certification, he said.
“Al Maktoum International is planned in such a way as to represent a leap into the future."
The new airport will generate an estimated workforce and residential requirement for more than 1 million people living and working in Dubai South, which has been under development since 2007.
"DXB will continue to serve as the primary hub, meeting the needs of 100 million-plus guests over the next few years as phase two of DWC [Dubai World Central] takes shape," Mr Griffiths said on Sunday.
"We will be actively collaborating with our airline customers, our strategic partners, the Dubai government and our stakeholders to bring this visionary project to fruition."
Skewed figures
In the village of Mevagissey in southwest England the housing stock has doubled in the last century while the number of residents is half the historic high. The village's Neighbourhood Development Plan states that 26% of homes are holiday retreats. Prices are high, averaging around £300,000, £50,000 more than the Cornish average of £250,000. The local average wage is £15,458.
How to register as a donor
1) Organ donors can register on the Hayat app, run by the Ministry of Health and Prevention
2) There are about 11,000 patients in the country in need of organ transplants
3) People must be over 21. Emiratis and residents can register.
4) The campaign uses the hashtag #donate_hope
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
