Build, supply, operate
With a record number of suppliers attending this year's Dubai Airport Show, focus was placed firmly on the massive build developments taking place across the region and the role of future airports.
The ongoing aviation boom in the Middle East, South Asia and Africa, and the opportunities and challenges that the region's future airports present were highlighted when the aviation industry's regional showcase event opened in Dubai at the start of June.
Attracting 600 suppliers from 40 countries, and over 100 civil aviation authorities and airports, the eighth Airport Show was opened by HH Sheikh Ahmed bin Saeed Al Maktoum, president of the Dubai Civil Aviation Authority and chairman of Dubai Airports.
The rapid rate of airport development in the region and the projected increase in passenger and cargo traffic were among the issues to be addressed on day one of the Future Airports conference, running alongside the show.
Featuring senior representatives from civil aviation authorities, airports and build and supply companies, the Future Airports conference provided a forum for aviation leaders from the Middle East, South Asia and Africa to share their vision of future airports and discuss pertinent issues surrounding rapid aviation growth in the region.
The Future Airports conference was opened by Paul Griffiths, chief executive officer (CEO) of Dubai Airports: "The highest growth rate in aviation is being recorded, and that is 40% higher than the current global average, and it is not going to stop there. Within the next few years the collective annual capacity of airports in the region will reach 400 million passengers with Dubai responsible for about 50% of that total capacity. Traffic at Dubai International Airport is growing at a rate of about 20% per annum making it the fastest growing airport in the world's top 30, with 34 million passengers last year and an expected 40 million plus in 2008."
Griffiths addressed the challenges that Dubai International Airport will face due to the fast rate of growth and the effects on capacity, not just in the air, but throughout the GCC region.
"Dubai Airports' projections suggest movements will have to be increased by up to 50% to accommodate growth in traffic over the next seven years, at a time when there are very ambitious growth plans in the region."
"The challenge will be to ensure that the most effective and efficient processing of traffic at Dubai International combined with the expedient development programme at Dubai World Central combine together to ensure that growth within the region of airport capacity is not constrained.
"Dubai International will have to cope with between 65 and 70 million passengers before any large scale transition can take place between Dubai International and Al Maktoum at Dubai World Central."
Griffiths also addressed the issue of technology and addressed the airport's customer-centric ideas.
"Most people think an efficient airport is one where you go through very quickly, with the minimum of fuss. Most customers thoughts on arriving at an airport is Ã¢â‚¬Ëœhow quickly can I get out of here', so we will be using new technology to make that experience as efficient as possible."
Griffiths' continued: "One thing I have never understood in this industry is why we have a process called check-in. In what other industry, when you have paid for the goods you have wanted to buy, do you then have to reconfirm, yes I actually do want to use these goods. So we want to eliminate the check-in process and make much of that a part of the transaction when you buy your ticket in the first place."
The session also included a speech from Andreas Schimm, director of economics and programme development at Airports Council International (ACI).
"There is hardly a more appropriate venue for an airport's conference than Dubai," Schimm said. "The airports in the United Arab Emirates (UAE) can be expected to handle over 200 million passengers in 2020, climbing to overall traffic volumes similar to those of much larger countries like Brazil, Canada or Italy."
"Abu Dhabi International Airport is seeing current growth rates of over 30% per year and will top 10 million passengers in 2010. The ultimate capacity of the new airport will reach 50 million passengers."
Schimm continued: "A little further west Qatar is shaping up to be a major player in the Arabian Gulf and with the new Doha International Airport designed to accommodate 50 million passengers by 2015, Doha is establishing itself as an alternative destination and transit point."
"This unique momentum is spreading to other countries in the region as well; Bahrain, Oman, Saudi Arabia and Kuwait taking the overall investment by 2015 to over US$40 billion. Dubai International Airport already serves 205 international destinations, 15% more than the world's biggest airport for international traffic, London Heathrow."
Yet Schimm warned that with world air traffic forecast to double by 2025 the infrastructure will need to be accommodated in a qualitative and efficient manner to avoid traffic system pile-ups.
Dubai International will have to cope with between 65 and 70 million passengers before the move to Al Maktoum.
"The world's largest airports are no longer driving the growth of our industry. This is not for lack of demand, it's because their ability to respond to increasing demand is constrained by regulatory and financial and geographical reasons."
"Large airports are all too often no longer the service hallmarks of our industry, as they are operating beyond the capacity they were designed for, negatively impacting passenger experience and operational performance."
"Airports are major contributors to national and local economies. 4.5 million people are directly employed by the world's airports. The airport industry alone contributes over $450 billion to the world economy, which is equivalent to 1% of world GDP. Based on this background airports should have the freedom and self determination to stimulate the economy and create employment, promote globalisation and cultural exchange. Instead, in too many cases, they are entangled in unreasonably lengthy, burdensome planning processes, that are costly and delay vital expansion."
"The aviation infrastructure enhancement, incredibly, is still way off the top of most governments' priority lists, either unpopular or too costly. The regulatory environment must therefore allow airport operators to manage the airports profitably at the rate of return sufficient to finance new infrastructure."
"Airport industry capital expenditure currently increases at about 10% per year. Even if annual capital expenditure stagnated, the capital needed for airport expansion not including greenfield airports, until 2020 will represent close to $500 billion. This sum is the equivalent to a current annual turnover of the entire global airline industry. Governments are unlikely to make these funds available. Therefore airports need to become businesses that are attractive to private investors."
Schimm also argued that the success of airports of the future also lies in other factors beyond the airport industry's control, that of air traffic management and the environment.
"It is not only on the ground where capacity is an issue, although aircraft movements might not increase quite as much as passenger numbers, the air traffic management systems in many parts of the world are not fit to cope with regional demand. Air space remains blocked due to military reasons or latest navigation technologies not being applied. This leads to a squandering of resources and emissions, due to longer than necessary flight times."
"Increasing air traffic management performance demands a lateral issue which must be considered by governments as a key element in reaping the full benefits of liberalisation. Airports on and around their premises continue to take the brunt of the public opposition, standing in for the entire aviation industry."
"The environmental debate is not going to go away and the industry is running the risk of being seriously restricted if it doesn't tackle the environmental issue proactively by communicating the facts and advancing technology."
Rising oil prices were also on the agenda during the opening conference and Schimm warned of an aviation industry collapse: "For quite a long time the rising oil price has not had a clear negative effect or impact on traffic figures, however since February 2008 when the oil price settled at just over $100, global airport industry growth has been slowing down and is expected to have stagnated in May after only minor increases in April."
Schimm added: "Rising oil prices could lead to an aviation industry collapse and no immediate remedy will be available. A permanently high oil price, at or above current levels, will force the industry into an inevitable and unprecedented transformation. There will be winners and losers and only the most efficient and technologically advanced will be able to absorb higher operating costs."
"As we currently observe in the United States where the high oil price has hit the hardest, airports are the first victims as routes and capacity are cut and expansions go unmaterialised. Domestic traffic in the US in April has declined by over 10% and further cutbacks announced. For smaller airports these developments are traumatic."
Schimm concluded that the pressure to adapt and innovate is on like never before. "There is a lot at stake for the industry and the global economy. The airport industry is keen to maximise its role for the future and well-being of economies, societies, trade, commerce and tourism. The opportunities stand by to be seized, not to be wasted. If government and industry stakeholders collaborate and provide a framework that is conducive to further growth, increased efficiency and new technologies the airport industry will not hold back to meet its obligations and create value for industry. Dubai has emerged as a hub with unprecented growth. If Dubai cannot survive, no one will."
Schimm's emotive speech was followed by two sessions which addressed the environmental implications of future airports led by Dr Mark Watson, senior advisor of corporate environmental affairs at the Society of British Aerospace Companies and Dr Peter Marx, vice president of environmental management at Fragport AG.
Marc Noyelle, chairman of Aeroports de Paris (ADPi) provided an overview of best practice in airport infrastructure and operations, and Jeff Griffiths, executive vice president and CEO of Washington Consulting Group and Achim Baumann, regional manager of DFS Deutsche Flugsicherung GmbH discussed increasing congestion in Middle East skies and offered solutions for airspace management.
For the second consecutive year, specialist conferences dedicated to air traffic control, ground handling and aviation security also took place at the Airport Show.
More than 70 aviation leaders and experts spoke across the four conferences at the show, providing an important knowledge sharing forum and platform for the region's aviation industry.
"This year marks Arconas' third time exhibiting at the Airport Show in Dubai along with our Middle East distributors, Gulf Business Foundation. As the pre-eminent exhibition in the region focusing on airport building, supply and operation, the Airport Show is the key forum for meeting the key decision makers in this region and a vital part of Arconas' success in the Middle East." - Dan Nussbaum, president, Arconas Corporation.
British Aviation Group
"This year's Dubai Airport Show has been a success for many companies exhibiting in the UK Pavilion. Through the show they had the opportunity to meet with key airport companies and organisations from across the world and demonstrate what makes the UK industry a world leader. However this year's Dubai Airport Show was not just a success for the UK's airport industry but also for the industry at large. With events such as the Future Airports Conference running alongside the show, we have demonstrated our industry's commitment to tackling the challenges of climate change and outlined the influence future airports will have on regional economic development." - David Scotter, director, British Aviation Group.
"The Airport Show in Dubai was a great chance for Cavotec to make and reinforce strong regional and international contacts. It was beneficial from a sales point of view, but also at a higher level of networking among regional aviation authorities and concerned players." - Shashank Rao, sales manager, Cavotec.
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