Dubai airport still growing faster than Abu Dhabi but overcapacity looms
Posted on 27 January 2011 with no comments from readers
Dubai International Airport continued to grow faster than Abu Dhabi’s airport last year, handling 15 per cent more passengers against a 12 per cent rise for the UAE capital’s airport, and in absolute terms Dubai’s 47 million passengers dwarfed Abu Dhabi at 11 million.
The continued expansion of Emirates Airline, the world’s largest international carrier, accounted for most of the growth. Last year the carrier added five new destinations with eight new Airbus A380s joining its fleet and three Boeing 777-300ERs.
Expanding hub
Flydubai, the Dubai state-owned low cost airline launched one new route every three weeks last year with a total of 17 new destinations, many not already served by Emirates and so adding to Dubai as a hub airport.
That said Etihad Airways saw revenue grow by 29 per cent to $3 billion and passenger traffic rose 13 per cent to 7.1 million. Etihad introduced eight new aircraft, including two freighters, and seven new destinations.
Etihad plans to add two new destinations this year, including one in Europe, and six new planes to its fleet of 57 aircraft, two new Boeing 777-300ERs, three Airbus A330-300s, and one Airbus A320.
If Dubai and Abu Dhabi remain friendly competitors then this is only to the benefit of UAE aviation and global travelers. The airlines have created a massive hub network in the UAE, served by the most modern planes, new airports and enthusiastic, young staff.
Tough competition
It is a formula that legacy carriers are finding impossible to match. British Airways’ staff have just voted for more suicidal industrial action to retain impossibly advantageous employment conditions, while Lufthansa and Air Canada are actively lobbying to keep Gulf carriers from new destinations in their home countries.
But if there is a flaw in the Gulf aviation business model it is surely the simple one that the global economy may not be up to absorbing all the new capacity it is bringing into service, and a damaging trade war will reduce profitability for all airlines.
This year the formerly strong Asian emerging economies look vulnerable to overheating and inflation amid debt crises in Europe and the US, and even Japan whose AAA-rating was lost today. Expanding capacity into a shrinking market has never been a formula for business success or at least not without a painful fight first.
