Undeterred by regional uncertainty, Dubai International Airport has embarked on a US$2.5 billion expansion project that will totally reshape the airport and its ground operations. Richard Rowe reports from Dubai
Nothing it seems can stop Dubai's relentless quest to become one of the world's most extravagant, and popular, business and leisure destinations - and certainly not the prospect of another skirmish 1,000 miles away in Iraq.
Once just a dusty trading port on the Arabian Gulf, the discovery of oil in the late 1960s propelled Dubai along the first steps of a remarkable journey. Now, as those same oil reserves show signs of dwindling, Dubai has reason to thank the ruling Al Maktoum family for its vision; rather than sitting pretty on oil receipts, Dubai's rulers made it their personal mission to develop the emirate into such a cosmopolitan hub of business, tourism and sporting excellence that no one would miss the black stuff when it finally ran out.
Today, Dubai continues to use its financial and entrepreneurial muscle to attract visitors and workers from the four corners of the world. Few places could have so skillfully combined the aggressive trading instincts of Hong Kong with the sheer audacity of Las Vegas to create such a relentlessly cheery and undoubtedly world-class haven for business and leisure travellers alike.
The statistics are telling: annual GDP growth sits at a remarkable 13.2 percent, while tourism now accounts for 40 percent of Dubai's economy. This, of course, is good news for the airport. Easily the fastest growing in the Middle East, Dubai International Airport has nonetheless surprised its own Department of Civil Aviation (DCA) with its success over the last 12 months.
The DCA had predicted a total of 15 million passengers for 2002, but hit 16 million instead - a growth of 18 percent on 2001. In addition, Dubai was one of the few airports in the world to enjoy positive figures during the dull days of 2001 - the airport may have failed to hit initial targets, but still posted passenger growth of 9.5 percent over 2000.
It has been the same story for air cargo, with a jump of 24 percent in 2002, up from a little over 630,000 tonnes in 2001 to nearly 785,00 tonnes in 2002.
Much of this growth can be attributed to the multi award-winning Emirates Airlines. The national carrier accounts for around 45 percent of all passengers at the airport and continues to expand its fleet and route network year on year.
The airline, which was founded in 1985, plans to add an additional 60 aircraft to its fleet between now and 2010. This includes the incremental purchase of up to 20 Airbus A380s when the giant aircraft comes on stream in 2006, as well as two A380 freighters.
Emirates is joined at Dubai International Airport by another 100 scheduled airlines, plus a smorgasbord of 70 or so charters and ad hoc carriers, many hailing from the Commonwealth of Independent States (CIS).
Cautious planning has never been Dubai's style; Build it and they will come has long been the motto in this part of the world. And in this respect, the DCA has set itself perhaps the most ambitious challenge yet: just two years after opening the US$500 million Sheikh Rashid Terminal, plans have been unveiled for the second phase of the airport's expansion at an estimated cost of 9 billion Dirhams (US$2.5 billion).
Other countries require lengthy public inquiries before new infrastructure is given the green light, but not Dubai. If the powers that be, such as HH Sheikh Ahmed bin Saeed Al Maktoum, DCA President and Chairman of the Emirates Group, decide that a project should go ahead, then that is exactly what happens.
Phase two of the expansion will take the airport to another level again. It involves the construction of Terminal 3, and an adjoining Concourse 2 and 3. It will also see the construction of what has been dubbed the Cargo Mega Terminal which, on completion, will help Dubai on its way to handling a projected three million tonnes of air cargo by 2018.
Terminal 3, in particular, represents a radical departure from what has gone before at the airport. Located 20 metres beneath the apron and taxiway area, the multi-level underground structure will include first class lounges, restaurants, 180 check-in counters and thousands of car parking spaces.
For many space-constrained airports, the idea of locating an entire terminal underground might seem like a visionary, space saving idea, but not for Dubai. "It's not so much for space reasons," says an airport spokesperson. "It's really for aesthetics and to be a little different."
Terminal 3 will also create a new visual experience for passengers: design consultants Aeroports de Paris will ensure passenger orientation by maintaining visual contact with the landside area through a fully-glazed facade at one end and Concourse 2, with its naturally lit atrium, at the other. Fortunately, Dubai rarely suffers from cloudy skies.
The new terminal is linked directly with Concourse 2, which in turn retains the fuselage shape of the adjoining Sheikh Rashid Terminal. Finally, Concourse 3 will be a scaled down version of Concourse 2.
Not surprisingly, much of Dubai's expansion is based around meeting the needs of its young tyro of a national carrier. Phase two will precipitate a major overhaul of airline operations with Terminal 3 and the two new concourses all designed for Emirates' exclusive use.
Ground has already been broken and the overall passenger side of the project is scheduled for completion by 2006. The Cargo Mega Terminal, meanwhile, will be built in phases and be completed by 2018. It will provide much needed capacity to grow the rapidly expanding cargo business through Dubai.
As if this wasn't enough, the DCA recently announced a separate US$137 million expansion plan for Terminal 2, which was initially designed to handle chartered, executive and special flights.
With a current capacity of 22 million, Dubai International Airport is hardly short on space, but why wait? Phase two of the airport's expansion will increase capacity to around 60 million passengers a year, which the DCA says should keep it ahead of the demand curve until around 2045.
The sheer scale of such a project places huge emphasis on the entire airport community working together to minimise operational impact. Central to this will be the role of Dnata, currently the airport's sole full service ground handling agent.
Dnata's challenge is to ensure that the quality of ground service at the airport matches the new facilities - both during construction and once complete. Its cause is undoubtedly helped by a close working relationship not only with the DCA but also its sister company and, in turn, largest customer, Emirates.
The Dnata management team, led by Ismail Ali Al Banna, Director, Airport Services, has been busy analysing exactly what the expansion will mean for its overall ground operation between now and 2006. "As a rule, we tend to look 15 to 18 months ahead in terms of detailed planning," explains Tom Lewis, Senior General Manager, Airport Operations.
Such detailed planning envisages the addition of 1,500 extra staff during the financial year to 2004 - an increase of over 40 percent - as well as capital investment in the region of US$25 million.
System requirements will also change and Dnata is about to commission a new baggage reconciliation system from Sita and also hopes to have an airport wide RF system up and running before the summer.
Of course, building what is effectively a new airport from the inside out will have a major impact on road access, apron settings and taxiway crossings - all of which will have to be factored in to Dnata's operational planning.
The DCA confirms that the apron area around the proposed Concourse 2 will see the most work. This area will provide 27 widebody stands, of which five will be set aside for accommodating the new A380 aircraft. Construction of this apron is already underway and will be ready later this year.
Concourse 3, in the meantime, will feature an additional 12 gates all with double-decker boarding facilities for servicing the A380. All aprons will be built complete with taxiways and lanes capable of handling the giant aircraft, while some existing taxiways will be expanded to complete the work associated with the newly commissioned second runway.Home and away
Dnata has used its operation at Dubai International Airport as a model for creating a growing network of overseas handling stations. In Pakistan, the company operates Gerry's Dnata, a joint venture serving four cities: Lahore, Karachi, Islamabad and Peshawar.
An additional joint venture, Safiran Dnata, recently began operations in Tehran (Iran), while Dnata Wings operates at Manila's fiercely competitive Ninoy Aquino International Airport in the Philippines.
Elsewhere, in India, the handler secured several handling concessions in partnership with InterGlobe, Menzies Aviation Group and United Airlines, but so far the Indian Government has not authorised the start of operations.
Dnata has also been in discussion with prospective partners elsewhere in the Middle East and will be looking to open new locations within the next 18 months, according to Derek Swan, Senior General Manager, Airport Projects.
"The overall strategy is to look regionally rather than globally, complementing Emirates' own operations where the ground handling economics of the station make it viable," explains Swan.
Terminal 2 will also be significantly extended to provide
additional remote parking stands and Lewis knows that construction work will
see a greater incidence of off concourse and off gate operations.
"Fortunately, the DCA will provide a fleet of passenger transport buses for us to operate," he says.
The next four years are likely to prove a testing time for Dnata. While the handler has to adapt to its home airport being radically reshaped for the second time in two years, there is also the potential threat of competition coming to the ramp in Dubai for the first time.
For now, there is little doubt that Dnata's position as the sole service supplier at Dubai is a considerable blessing. The kind of fierce competition that dominates so many other airports in the world would certainly compromise Dnata's ability to maintain service levels during the construction upheaval.
But, as Lewis points out, Dnata is at pains to avoid the complacency that can sometimes set in when you are the only show in town. "The question of complacency occurs a lot during our own internal debates," he says. "We are aware that being a sole service provider brings with it certain responsibilities."
As such, onus is placed on operating as if competition did indeed exist, and Dnata bristles with quality and performance measurement programmes. Already ISO9001 certified, Dnata is now shooting for AHS 1000 accreditation.
On the commercial side, Dnata has spent the last two years stepping away from a tariff based structure to a more customised pricing system for handling fees. The previous menu-based approach to buying ground services has been reorganised to create a more tailored handling offer for customer airlines.
"Every carrier is different and has very different needs," explains Vince Dennehy, General Manager Sales and Services Delivery. "It's important to tailor accordingly - that's why a tariff approach just doesn't work."
Crucially, Dennehy and others at Dnata have many years experience working in highly competitive environments and bring such understanding to bear on Dnata's approach. Dennehy arrived from a contracts purchasing position at Air New Zealand in September 2001 and knows all about an airline's ground handling needs. Similarly, Tom Lewis came to Dubai after eight years with Servisair in the UK and 17 years with a variety of airlines in Canada before that.
"We all realise that competition represents real life in this industry," says Lewis. "Equally, we all know we can do better by operating as if we had competition."
Such an ethos could prove handy: Sheikh Ahmed has already hinted that a second ground handler might be allowed to operate at the airport once the latest expansion is complete.For now, it is unclear whether any new handler would be granted a licence to operate at the old terminal, the new one, or airport wide.
For now, Dnata largely runs the show, albeit with Emirates and Emirates SkyCargo self-handling on the passenger and cargo side respectively, and Emirates Abela providing catering. Other airlines are allowed to self-handle on the passenger side, but none have taken up the option.
"Dnata was born with sole handling rights, but we are realistic enough to know that the aviation industry is very competitive and there is the probability that when construction has finished another ground handler could bang on the door," admits Lewis.
"In my opinion, it would not be wise to entertain the notion of another full service handler here until construction has finished."
But while Dnata may not necessarily face a direct threat to its business at Dubai, it faces plenty of competition geographically. A close eye is certainly kept on the pricing policies of Sharjah, a neighbouring emirate with its own international airport just eight miles down the road, as well as Abu Dhabi, the capital of the UAE another 100 miles to the west.
Another issue that the entire airport community continues to monitor closely is, of course, the prospect of a second conflict with Iraq. The DCA dismisses this as a temporary factor which does not seriously affect Dubai, but it is hard to imagine a second outbreak of hostilities between Iraq and the West not impacting operations at the airport.
While Dubai has been one of the most politically stable cities in the Arab world for many decades - the Switzerland of the Middle East as Dennehy puts it - and Iraq may be very far away, the emirate's location on the Gulf places it too close for comfort in many people's eyes.
But Dubai has proved its buoyancy before, and believes it can do so again. After the last Gulf conflict in 1991, North America-bound traffic understandably dropped off, as did the volume to and from Europe. However, the drop proved short term.
Even after 9/11, Emirates kept its schedule largely intact and very few of the carriers that curtailed flights in October 2001 failed to return to regular scheduling by March 2002. Europeans, in particular, came back in a hurry. Never underestimate, it seems, the northern European's need for guaranteed winter sunshine.
Conversations continue about the Iraq situation, but as Lewis points out, "What can we do? It's so hard to factor in."
Instead, Lewis and Dnata prefer to concentrate on the main challenge ahead: serving an aviation empire that has become one of the success stories of this and any other region.