FREEDOM TO FLY

UAE, Dubai 2012 | TRANSPORT | VIP INTERVIEW

TBY talks to Paul Griffiths, CEO of Dubai Airports, on developing Dubai as a global aviation hub.

Dubai International is the fourth largest airport in the world. What have been the key factors that have let to Dubai's tremendous success and growth as an aviation hub?

Dubai's geo-centric location, high-caliber infrastructure, quality home airlines, and an aviation model that features a liberal regulatory and tax-free business environment and close coordination and collaboration within the sector are the key factors in our growth story. Thanks to Dubai's open skies policy, the airport is connected to more than 220 destinations across six continents through 150 airlines, and continues to attract more airlines. It is a model that is paying big dividends. According to Oxford Economics, direct and indirect aviation, in total, supports over 250,000 jobs and contributes over $22 billion to the economy, which represents around 19% of total employment in Dubai, and 28% of Dubai's $80 billion. On the basis of these strengths and the forecasts for passenger growth from Boeing and Airbus, Oxford Economics expects the economic contribution of Dubai's aviation sector to rise to 32% of Dubai's GDP and about 22% of its employment by 2020.

The aviation industry as a whole has been through some tough years. In what ways do you believe airports and airlines should be pulling together to support greater commercial growth in the industry?

Greater collaboration is needed across the entire aviation value chain. Although there have been some improvements over the years, globally there remains fundamental mistrust between the various members of the sector, namely airlines, airports, control authorities, and retailers. Each closely guards customer data. And each creates processes and applies technology without considering the entire travel experience for our mutual customers. All these activities take place in separate, vertical silos, whilst our mutual customers bump roughly across the joins between them. And those joins involve something we all hate; queues. The time wasted not only frustrates our passengers, it drives up costs, reduces dwell time, and limits revenue generated in airport shops and food and beverage outlets. And let's not forget the role of government. Policy makers in most of the mature aviation markets worldwide fail to recognize the vital economic role and contributions of aviation and logistics, especially in the face of worldwide financial turmoil. A healthy aviation sector facilitates trade, commerce, and tourism. Governments need to wake up to the fact that unnecessary taxation regimes and protectionist policies place a drag on growth and in turn stifle economic expansion. Dubai's aviation model is a shining example of the success of an approach that flies in the face of this legacy, thinking both in terms of aviation policy and collaboration across the value chain.

“Dubai International continues to be a major attraction for other international airlines."

How do you aim to achieve the goal of attracting 90 million passengers through the airport?

The combination of a successful tourism industry, Dubai's proximity to the emerging economies of the East, and the Emirate's established role as a trading hub linking economies in the Far East, Europe, Africa, and North America, will drive growth and further consolidate Dubai's status as a global center for trade, tourism, and commerce. The success of Dubai's flagship carrier Emirates, which is among the world's fastest growing airlines, and the meteoric rise of our low-cost carrier flydubai—the two biggest contributors to passenger and cargo traffic at Dubai International—will also remain a major factor in our future growth story. Dubai International continues to be a major attraction for other international airlines, and is already home to 150 of them.

How are the plans for Dubai World Central (DWC) progressing, and how will operations there change the market in Dubai as a whole?

We opened our second airport, DWC, in June 2010 for cargo operations followed by general aviation in 2011. Since its opening the number of cargo airlines has grown to 36. Cargo volumes during the first calendar year of operations totaled 90,000 tons, and monthly traffic continues to grow at a rapid pace. The first phase of the project also includes a passenger terminal that will be undergoing operational readiness testing in the coming months. Passenger operations are not yet planned and will depend entirely on the commercial needs of our client airlines. Providing capacity where it is needed is our immediate priority, and that happens to be at Dubai International. So over the next 10 years we will be investing $7.8 billion in the expansion of Dubai International to boost capacity from the current 60 million passengers per year to 90 million to accommodate anticipated traffic growth. The additional aeronautical and non-aeronautical revenue generated by this increased traffic will fuel the funding of the next phases of DWC, which will ultimately become the world's largest airport with an annual capacity of 160 million passengers and 12 million tons of cargo. In the interim, DWC will play an important role in accommodating cargo, general aviation, and passenger airlines that will find the airport an increasingly attractive option due to emerging slot constraints at Dubai International. DWC is a long-term project and work on it will continue through this decade.

When is the specialist A380 terminal opening up and what will this add to the airport?

Concourse 3, which is part of the Terminal 3 complex, is a state of the art facility dedicated for use by Emirates for their A380 fleet. The completion of the project later this year will be followed by a series of operational readiness trials that will test every system and process as well as their backups across the facility. Just as we did with the opening of Terminal 3, acknowledged by the industry as a grand success, Concourse 3 will be opened to our customers only after it is 100% ready. We expect the opening to be sometime in the first quarter of 2013. The new facility will increase the capacity of Dubai International from 60 million passengers per annum to 75 million, and with the wide array of service offerings—including retail, duty free, lounges, hotels, and food and beverage—contribute in a major way to the overall customer experience at Dubai International.

How have regional unrest and economic woes in Europe affected the demographics of people coming through the airport?

Middle East and North Africa were the only two regions to show a contraction in passenger numbers during 2011. The strongest markets served in terms of total passenger numbers included India, the UK, Saudi Arabia, Pakistan, Qatar, Germany, and the US. The most significant percentage traffic growth during 2011 was seen on routes linking Dubai to Eastern Europe (81%), Russia and the CIS (30.5%), GGC (26.5%), and North America (16.1%).

© The Business Year - April 2012