Dubai pins hopes on aerotropolis vision but project on go-slow

Posted on 23 May 2011 with 1 comment from readers

Gulf hub city Dubai is pinning its hopes on a bright future as an aerotropolis by building the world’s largest airport at the recently inaugurated Maktoum International Airport linked by a 10-kilometre corridor to the Jebel Ali Free Zone, an economics workshop at the Dubai International Financial Centre heard today.

Chief operating officer at Dubai World Central, the free zone surrounding the new airport, Rashed Buqara’a said: ‘Maktoum International is already needed right now to meet air cargo capacity requirements for Dubai and will open for passengers in 2012.

‘Ultimately the new airport will be the biggest in the world handling 120 million passengers a year and 12 million tonnes of cargo. That compares with 47.2 million in 2010 (handled at the existing airport) and 2.27 million tonnes of cargo.’

Aerotropolis

The author of ‘Aerotropolis: The Way We’ll Live Next’ Greg Linsay appropriately spent 32 hours flying to get to Dubai to address the conference, and commented: ‘Dubai already is an aerotropolis, it is not a question of becoming one.’

An aerotropolis is a city built around an airport, though as one attendee pointed out an ‘aerotroport’ might be more accurate for Dubai which also has huge port facilities. However, the second airport Maktoum International clearly adds to this dynamic.

One day the growth dynamic will run out, and Dubai aviation will grow inline with global GDP, or by a factor of times-1.5 like global passenger demand. But for the moment 15 per cent compound growth rates stretch long into the planning horizons in the sector, whether for passengers, cargoes or aircraft orders for the Dubai airline Emirates.

Emirates Airline continues to span the global with Rio de Janerio and Buenos Aires on the schedules for next year for the first time. There are also plans to put more planes on existing routes and to massive cities in China whose names are very unfamilar.

The 15 A380s operated by Emirates are already very popular and flying nearly full but the fleet will number 90 when existing orders are delivered. To go beyond that the airline must have a new home at the $33 billion new airport complex.

Global economy

Dubai is surely the one city in the world that can make this aerotropolis vision a reality. But the roll-out will be slower if global growth slows again or if there is another financial crisis.

Infrastructure deals tumbled from $10 billion in 2009 to $4 billion last year in the region owing to the global financial crisis, said IFC manager Adil Marghub, and the Arab Uprisings will hit orders again this year.

That’s a shame because the DIFC firms would love this business. The principle complaint by local bankers these days is boredom. And they will not have been pleased to hear from Mr Buqara’a that Dubai Government intends to fund the DWC project from its own resources for the time being.