Work is expected to begin next year on the Midfield Terminal Building (MTB) at Dubai South, the new name for the commercial arm of Dubai’s second airport, Khalifa Al-Zaffin, executive chairman of Dubai Aviation City Corporation, told reporters October 7.
The expansion of the existing passenger terminal building from 7 million to 26.5 million in 2018 is expected to buy enough time for development of the new MTB, which needs to have a capacity of around 120 million by the time of Emirates Airline’s arrival at DWC.
“We know we need to do a lot of preparation,” Al-Zaffin said. “We are ready for that. We have not finalized all the design, all the detailed design. It is approved. We are talking the nitty-gritty design of a terminal building.
“What has been approved is the conceptual design. This is one of the biggest airports in the world. The back-up housework, planning, engineering works, that takes a lot of time to do. We are quite comfortable with that. Work will start sometime next year.”
“Of course, it would be ideal for the MTB to be ready for Expo 2020, but that is not realistic,” said John D. Kasarda, director of the Center for Air Commerce, Kenan-Flagler Business School, University of North Carolina at Chapel Hill.
Additional one-time traffic of around 25 million is expected when Dubai hosts the World Expo 2020 at DWC five years from now. “Dubai International Airport (DXB) upgrades should allow it to handle the surge of air traffic in 2020 with improved surface connectivity from the airport to Dubai South facilitating visitor transfers to the site.”
Planners rebranded the site Dubai South for “commercial reasons,” removing the “Dubai World Central” name, although it is understood that the IATA designation DWC remains in place.
With passenger throughput inexorably growing at DXB, aviation planners are aware of the finite boundaries of that location, which could be breached as early as 2018. According to the latest available information, the numbers rose 9.5 percent year-on-year in August, up from 6.65 million to 7.28 million, according to Dubai Airports.
“Combined passenger traffic at DXB and Al Maktoum International at Dubai South [DWC] exceeded 71.3 million in 2014 and is expected to surpass 126 million by 2020 and 200 million by 2030,” said Dubai Airports.
As a result of the growth, all dedicated freight carriers were moved from DXB to DWC last year, and several regional airlines, including Flydubai, Qatar Airways and Kuwait’s Al Jazeera Airways, have added flights to DWC despite often retaining similar services at DXB. Due to a lack of slots at DXB, general aviation is now said to reside at DWC, although some limited DXB windows exist.
“Freight volumes surged 42 percent in the first half of 2015 to 443,012 metric tons, up from the 311,365 metric tons achieved in the same period last year. The growth was driven by Dubai Airports’ strategic decision to relocate all dedicated freighters from Dubai International to DWC in May last year,” said Dubai Airports in September.
Oil Price Drop
Given the halving in oil prices over the past 15 months, financing for Dubai South expansion plans is understood to be proving difficult to obtain. Officials are guarded about immediate plans. These are thought to include an expansion of the existing passenger terminal building from 7 million passengers a year to 26.5 million by 2018.
In September 2014, Dubai ruler Sheikh Mohammed bin Rashid Al Maktoum announced that $32 billion would be spent to expand DWC by creating a “midfield terminal” that would house Emirates’ operation when the airline moves to Dubai South around 2025.
“The development is anticipated to be the biggest airport project in the world and will be built in two phases. The first phase (MTB) includes two satellite buildings with a collective capacity of 120 million passengers, accommodating 100 A380 aircraft at any one time and will take between six and eight years to complete. The entire development will cover an area of 56 square kilometers,” said a Dubai Airports press release at the time. Completion of Phase Two will bring capacity to 220 million.
Emirates CEO Sir Tim Clark ruled out any general move by the airline to DWC in the near future, an indication that existing estimates of around 2025 for Emirates’ final transfer to DWC are still likely to be in place.
“Obviously the pressure is to try and activate and get more value out of DWC, with more foreign carriers going down there. We are already pushing a lot of freight operations down there. General aviation has been moved down there, the executive jets. And more is coming. All this is on the table at the moment,” Clark said.
“My understanding is that the complete move of Emirates to Dubai South around 2025 is still anticipated. This target date could be altered depending on evolving conditions at the two Dubai airports, at Emirates Airline, and the broader aviation market,” said Kasarda.
Speaking to AIN on October 7, Al Zaffin ruled out the idea of a public-private partnership [PPP] to finance the expansion of DWC. He said the Government of Dubai would feel unhappy about the loss of control over speed of decision making to an international consortium. “We have our own ways [of obtaining funding]. I think we are almost there. It is difficult. We would rather have the total control. When you have a PPP, things are very slow to move. [We rely on] government finance.”
Bizav FBO Stalemate
On business aviation, Al Zaffin said FBOs being developed at DWC would likely be completed at the end of this year or early next year. He said if they were not ready for the Airshow, they would ready soon after. “Hopefully by the beginning of the year we will have an operation. There is a lot of potential for growth. We would like to make Jebel Ali the center. Now, that is Saudi Arabia, in a way, because the money is there.
“We will go for big operators, who will bring in a lot of business to this part of the world. We are not just talking about FBOs, but [also] MROs and a lot of other services.”
Al-Zaffin said a second runway would take a matter of years but would happen before 2020. “I think one is more than enough for now. We don’t want to put money where it’s not needed. Once we ramp up the capacity of the [MTB], probably we will need a second one for a lot of good reasons. I think it would come probably a few years from now, but yes, [before the end of the decade].”
Dubai LCC Flydubai will progressively grow its operations at DWC in future years. In addition, Flydubai Cargo will offer a range of transport solutions.
The carrier announced the commencement of its winter schedule in August. The airline said it would operate 70 flights per week from DWC during the winter schedule. Flights to Amman, Beirut, Chittagong, Doha, Kathmandu, Kuwait and Muscat, for both business and economy passengers, will become available. Flights to these destinations will continue to be available from DXB, it said.
“The start of our new operations at DWC provides further opportunities for growth for Flydubai as we take delivery of more than 100 new Boeing aircraft by 2023. We will continue to play an important role in the future of aviation in the UAE,” said Ghaith Al Ghaith, CEO, adding that Flydubai expected to take delivery of eight B737s per year for the next few years until the arrival of the B737MAX.
DWC continues to be an airport in waiting. The rebranded Dubai South designation is an indication that there is official frustration with the slow progress the airport is making. And yet, while progress is slow, it is inexorable. The problem goes back to the launch of DWC in 2006 and the fact that the global financial crisis intervened.
Officials at Dubai South are caught between the long and short games they are being forced to play, with the World Expo 2020 the most obvious medium-range target. Khalifa Al Zaffin has frequently complained about the “psychological barrier” he faces in selling the idea of Dubai South to future clients. With the arrival of Emirates a decade away, this is not something he can sell as an immediate payoff.
“I do sympathize with Khalifa Al Zaffin’s concern about a ‘psychological barrier’ to people moving down to Dubai South. The most effective way to overcome this potential psychological barrier relatively quickly is to have a well-functioning and expanding Al Maktoum International Airport and Dubai South Aerotropolis with speedy surface connectivity to them from throughout the Emirate. Experience shows that Dubai leadership [airport as well as government] should be up to these tasks,” Kasarda said.
He concluded, “Dubai and its aviation network would best be served by a consolidated international hub airport and a single aerotropolis at Dubai South. DXB and Dubai South have a large, unconstrained canvas on which to develop a world-class 21st century hub airport and surrounding modern aerotropolis. This is the outcome I expect.”