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Dubai makes the best of it.

DESPITE GLOOMY predictions of a prolonged slowdown in airport traffic made only two years ago, business has never been better for Dubai Airport and the national airline, Emirates. Ironically, the windfall rate of growth itself is now causing problems.

Throughout the 1980s, Dubai Airport enjoyed a privileged position in the region based on its excellent duty-free facilities and its central position along the main commercial routes. There was a steady if unspectacular rise both in passenger traffic and aircraft movement.

The Gulf war in 1991 caused an understandable drop in all airline activity throughout the region and Dubai suffered a 12% decline in passenger traffic, down from 4.67m passengers to 4.39m. A large segment of this dip was the result of the decision of several carriers not to fly to the Gulf region during the war. The consequent drop in the number of transit passengers was also reflected in poor duty-free sales leading to a general reduction of airport revenues.

The war, however, brought an unexpected boon to the national carrier, Emirates. While other carriers suspended flights, Emirates maintained about 82% of its schedule. For over a year, from the late 1990s to 1991, it was the only airline flying into Dubai.

Passenger traffic shot up by 25%, nudging the magic million mark for the first time in the airline's history. Cargo increased by a massive 40% and, most pleasing for the airline's management, revenue soared by 45%.

Almost at a stroke, Emirates' status changed from "marginally significant" to "respectable medium-sized". The airline's fleet has leap-frogged to 15 aircraft, including two Boeing 747s. Passenger traffic for 1992-1993 was 1.6m and the forecast for 1993-1994 is for over two million. Emirates now flies to 30 destinations, serving several new routes in Europe and the Far East.

This is a far cry from the airline's early days in 1985 when it operated two aircraft leased from Pakistan International Airlines and serving routes only to Bombay, Delhi and Karachi.

However, the very rapid growth of Emirates, coupled with a sharp increase in passenger traffic and aircraft movement since the end of the Gulf War, is placing a heavy strain on Dubai airport's handling capacity.

The number of "choke points" at the airport, which were already considerable before the war, seem to have multiplied. There are still no direct loading bridges and passengers have to be ferried to the aircraft in motorised transport. There are only ten secure lounges when at least the same number again are needed and the present 44 check-in counters can hardly cope with the traffic flow.

Although the meteoric growth of Emirates could not have been foreseen, a masterplan devised by the giant American construction firm, Bechtel in 1988, had correctly identified the present bottlenecks and had urged a wholesale expansion of the facilities to cope with the increased activity.

The masterplan had also fitted in neatly with the government's desire to become the region's transport and commercial centre in anticipation of the expected drying up of oil reserves early in the next century.

Because of its geographical position, Dubai is the region's busiest sea port and operates the world's largest dry-dock. Plans to expand the air transport facilities were therefore a logical extension of Dubai's determination to retain its position at the centre of the Gulf's transport network.

Yet despite the comprehensive airport development masterplan, nothing has so far been done. The success of Emirates airlines has now made it imperative that development should commence as soon as possible.

The masterplan, composed of an Immediate Development Plan (IDP) and a Long Term Phase, is an ambitious project worth around two billion dollars at current prices. If and when the project is completed, Dubai Airport will have a brand new terminal, the existing departure terminal will be refurbished, and a new 52 gate concourse with tunnels running under the present parking bays. Each gate will have a secure lounge. The plan also envisages 120 check-in counters and a new runway.

The Immediate Development Plan, which will take five years to complete, would provide a new 24-gate concourse to handle the expected increase in traffic. The additional 28 gates would be constructed during the Long Term Phase.

However, at the rate at which activity is increasing at Dubai Airport, even if the nod were given tomorrow, the IDP schedule seems at least three years too late. Even low-growth projections indicate that passenger traffic in the year 2000 is expected to be 6.5m, while the high-growth projections cast the figure at around 8m. Although there is a great deal of high-level discussion, there is still no clear indication when the government will give the airport development plan the go-ahead. Meanwhile, Dubai's rival airports are capitalising on its indecision. An estimated three million passengers will use the new terminal complex at Bahrain and the new King Fahd International airport complex in Saudi Arabia is nearing completion. It will handle five million passengers with the capacity to increase to 11.6m.
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Title Annotation:Special Report; airlines
Publication:The Middle East
Date:Nov 1, 1993
Previous Article:Facing the combines.
Next Article:Emirates matches it ambitions.

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