the emerging middle east carriers
TRANSCRIPT
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The Emerging Middle East Carriers:
The effect of their continued growth on their home airports
Course Project
16.781
Fall 2013
Karim Al-Sayeh
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Table of Contents
1) Introduction 3 – 7
2) Doha International Airport 8 - 12
3) Abu Dhabi International Airport 13 - 17
4) Dubai International Airport 17 – 22
5) Istanbul Ataturk Airport 22 - 26
6) Summary 26 - 27
7) References 28
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Introduction
The term “emerging carriers” was first used in the late 2000s to describe a group of carriers based
in the Middle East that were growing rapidly. They first captured the attention of the airline industry in
the mid-2000s when they dominated the headlines at the annual air shows in Farnborough and Paris, by
placing record breaking orders for wide-body aircraft. They continue to draw attention due to their rapid
growth and the effects they are having on the global air travel industry. Despite the frequent use of the
term “emerging carriers” there has yet to be an agreed upon definition. For the purposes of this paper
the term “emerging carrier” will refer to a carrier based in the Middle East which has average annual
capacity, passenger and fleet growth rates in excess of 10% for at least five years. Most media coverage
and academic research have correctly identified Emirates, Etihad and Qatar as belonging to this group. By
applying the previous definition put forth it becomes immediately apparent that another airline in the
Middle East has earned the distinction of being called an emerging carrier: Turkish Airlines.
Each individual emerging carrier has managed to achieve remarkable growth figures over the past
several years. As a group the carriers dominate traffic between the Middle East and several other regions.
Their continued growth has come at the expense of legacy carriers both in the Middle East and
neighboring regions. The geographic location of their hubs provides them with a strategic advantage that
cannot be easily replicated. Figure 1 shows the approximated population catchment within 5 hour flight
times of the major European hubs as well as those of the three emerging carriers based in the Arabian
Gulf. The geographic location of the emerging carriers provides them with access to over twice as many
potential passengers within a five hour flight window as compared to the major European carriers. That
coupled with the fact they compete with far fewer airlines has allowed them to expand rapidly.
Figure 1) Estimated populations within 5 hour flight times
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The growth that these emerging carriers have achieved over the past decade has unsurprisingly
resulted in their home airports witnessing rapid growth rates, in both passenger and flight numbers.
Figure 2 below shows how the number of aircraft movements at each of their airports has changed over
the past decade. Each of these four airports has at the very least doubled the number of movements it
handles. Dubai and Istanbul both currently handle over 300,000 flights and are poised to continue
growing by roughly 10% each year. They each handle twice the number of movements that Doha and
Abu Dhabi currently handle.
Figure 2) Annual Commercial Aircraft Movements at Emerging Carrier Hubs
The increase in passenger numbers associated with this increase in aircraft movements is shown
in table 1. Dubai International Airport handles the largest number of passengers of any of these airports.
In fact Istanbul Ataturk Airport, which serves the second largest number of passengers, handled fewer
passengers in 2012 than Dubai did in 2010. As for Doha and Abu Dhabi they serve less than half the
number of passengers Dubai does. Doha and Abu Dhabi did however the largest percentage increase in
passenger traffic over the past 5 years. They have more than doubled the number of passengers served
despite the onset of the global economic crisis and the Arab Spring.
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IST 23,000,000 29,000,000 30,000,000 32,000,000 37,000,000 45,000,000 96%
DOH 9,459,812 12,272,505 13,113,224 15,724,027 18,108,521 21,163,382 124%
DXB 35,000,000 38,000,000 41,000,000 47,260,000 50,977,960 57,684,550 65%
AUH 6,926,000 9,017,000 9,672,000 10,855,000 12,400,000 14,700,420 112%
Table 1) Passenger growth at emerging carrier hubs
Over the past decade each of these cities has grown rapidly thereby attracting increasing number
of business and leisure passengers. Many airlines from outside the region have launched flights to each
of these hubs. Currently over 15 airlines provide service from Dubai to Europe including all of the major
European legacy carriers. In the late 2000’s the governments in the Arabian Gulf began liberalizing the air
travel markets which has resulted in many low cost carriers entering the market. While some have been
unsuccessful, others such as flydubai and Air Arabia have been successful in establishing a presence in the
region. Middle Eastern legacy carriers which for many years were protected by strict government
regulations, had become complacent and accordingly suffered in the wake of liberalization. They too
however have been expanding their operations in an effort to maintain their positions in this increasingly
competitive market. Despite all of these airlines competing the majority of the increase in ASMs from the
Middle East has been due to the emerging carriers. 63% of the increase in ASMs from the Middle East
since 2004 is due to the emerging carriers. They also account for over 35% of the increase in flights during
that period. As previously mentioned, the location of their hubs allows them to connect East and West
more effectively than those located in Europe. A 2005 report by the International Civil Aviation
Organization identified the Middle East as having the highest average annual RPK growth of any region
over the past 10 years1. Many forecasts currently identify the region as having the highest growth rates in
passengers and capacity through the end of the decade. This is once again due to the emerging carriers.
1 http://www.icao.int/environmental-protection/Documents/Publications/6105_en.pdf
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In order to achieve these remarkable growth rates the emerging carriers have had to dramatically
expand their fleets. Etihad, which was started in 2003, currently has a fleet of 70 aircraft. Turkish Airlines
and Emirates both have approximately 200 aircraft in their fleets. While this is far short of the 1000+
aircraft that the major US legacy carriers currently operate, the composition of the fleets is very different.
The emerging carriers rely heavily on large widebody aircraft. Emirates currently operates an all widebody
fleet, and is currently the largest customer and operator of the Boeing 777 and Airbus A380. Etihad
recently signed a purchase agreement with Boeing which will make it the largest operator of the Boeing
787. Over the past decade the emerging carriers have captured the attention of the industry at the global
air shows by placing increasingly large aircraft orders. Figure 3 shows the aircraft that the emerging
carriers currently have on order. 75% of the aircraft currently on order by the emerging carriers are
widebody aircraft. Turkish Airlines is the only member of the group that relies more on narrowbody
aircraft. This is due to the proximity of its hub to Europe which allows it to offer convenient connections
throughout the continent.
Figure 3) Emerging Carriers’ Aircraft Orders
The average fleet age for each of the emerging carriers is less than 10 years. Qatar Airways has
stated that it intends to maintain an average fleet age below 5 years for as long as possible. The aircraft
that they currently have on order are mostly for fleet expansion. The majority of the aircraft on order
shown in figure 3 are slated for delivery before 2020. All the emerging carriers have stated that these
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Emirates Etihad Qatar Turkish
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aircraft will be used to expand their networks rather than replace existing aircraft. As part of my research
regarding the growth of these airlines, I created a forecast of their fleet sizes and capacity in 2020 based
on their aircraft orders. The results of that forecast are presented in table 2.
Emirates Etihad Qatar Turkish
2012
Passengers 39,391,000 10,200,000 17,500,000 37,997,786
Departures 163,338 67,014 124,246 277,327
Fleet 187 64 113 195
2020
Forecast
Passengers 81,356,514 25,628,665 45,941,849 78,259,416
Departures 262,545 134,868 244,660 545,164
Fleet 321 148 241 389
Change
Passengers 107% 151% 163% 106%
Departures 61% 101% 97% 97%
Fleet 72% 131% 113% 99%
Table 2) Fleet, Passenger and Capacity Forecast for Emerging Carriers
While air traffic forecasts are rarely correct or even reasonable, it is important to try and quantify
the end result of the aircraft orders placed by the emerging carriers. If the figures above are proven to be
correct it would dramatically change the state of the airline industry. Based on these growth figures
Emirates would become the largest airline in the world by revenue passenger km (RPKs). Though their
fleets will still not be among the world’s largest, the fact that they are composed primarily of widebody
aircraft (with the exception of Turkish Airlines) will mean that they have more capacity than the majority
of airlines. So while this forecast predicts dire futures for the airlines that they compete with, it does also
raise the issue of how this influx of widebody aircraft will affect their home airports. Airports are among
the most expensive civil engineering projects undertaken around the world. Unlike oil refineries and
power plants, they need to be located within a reasonable distance from a major metropolitan area.
Furthermore new airports have to take into account the future needs of airlines and leave room for
expansion. This has proven to be a major issue for major airports such as London Heathrow and New York
JFK. There are arguably no airports currently able to handle an influx of 90 A380 aircraft by a hub airline.
Even Etihad’s incoming fleet of 71 Boeing 787s would be difficult to accommodate at any major airport.
Therefore it is important to investigate and analyze the authorities’ response to these aircraft orders. The
aim of this project is to discuss the master plans of each of the emerging carriers’ home airport and
evaluate whether it will be sufficient to handle the influx of aircraft.
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Doha International Airport (DOH) – Qatar Airways Hub
Doha International Airport in Doha, Qatar is Qatar Airways primary hub. It operates daily flights
to over 120 destinations from Doha International. The current Doha airport is the only commercial airport
in Qatar and has been in operation since the 1960’s. Qatar used to be a member of Gulf Air prior to
withdrawing in order to focus on expanding Qatar Airways. Gulf Air used to operate in a similar manner
to Scandinavian Airlines where several nations own stake in one airline, which serves as the flag carrier
for the member nations. The United Arab Emirates and Oman were also at one point member nations in
Gulf Air. Currently Bahrain is the sole remaining nation in Gulf Air and as such Gulf Air now serves as the
flag carrier for Bahrain. Gulf Air was the largest carrier in Doha for many years, it provided service to
Bahrain where passengers could connect to Europe and East Asia.
Currently Doha Airport consists of two passenger terminal buildings and a single runway. The
nearly 15,000 ft. runway is among the longest in the world. It is located a few kilometers from downtown
Doha. The passenger terminals were upgraded in the 2000s to handle the influx of Qatar Airways
passengers. An additional premium terminal was also added to serve First Class and elite passengers. At
present the declared capacity of the two terminals is 12 million annual passengers. That threshold was
first exceeded in 2008. By 2012 Doha International was servicing more than 21 million annual passengers;
nearly double its stated capacity.
Figure 4) Aircraft movements by FAA Airplane Design Group Designation at DOH
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Since 2004 Doha International has witnessed an increasing number of widebody aircraft as shown
in figure 4. Type IV aircraft operations have all but disappeared from the airport. There has also been an
increase in narrowbody aircraft (FAA type III) due in large part to low cost carriers providing service at
Doha International. This change in the type of aircraft arriving at Doha International means that increased
separations are required. The typical capacity for a single runway is 48 movements per hour under
instrument flight rules and 56 under visual flight rules. Considering that Doha International operates 24
hours a day this means that the theoretical capacity of the airport is 420,000 annual movements. This
number is fairly misleading as demand at the airport varies wildly. In 2013 the airport recorded over
160,000 aircraft movements which would indicate that it is operating well below capacity. In reality Doha
International is facing some growing delays late in the evening and in the early morning. Qatar Airways
aims to connect passengers from east to west and as such many of its Asian flights arrive within a 2 hour
window of midnight. At around 3 a.m. the first flights destined for Europe takeoff resulting in a demand
surge which congests the airport. This is the only emerging carrier hub that operates a single runway and
the limitations of this airport are very evident.
Figure 5) Doha International Airport
Figure 5 shows the current configuration of Doha International Airport. The main passenger
terminals are located to the north of the runway in the figure, with several aircraft parking stands and
cargo facilities located to the South. We note that the area north of the airport is occupied by a mix of
residential and commercial buildings which limits the airports expansion. South of the current airport is
the Arabian Gulf. The capacity at this airport is limited by both the location of the terminal buildings as
well as the fact that there is no vacant land on which to build a new runway.
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Figure 6) Passenger and Aircraft Movements at Doha International Airport
From figure 6 we see how dramatically both passenger and aircraft movements have increased
over the past 5 years. Passenger numbers have more than doubled and aircraft movements have nearly
tripled during this period. Qatar Airways currently accounts for 75% of annual movements at Doha
International Airport. If the forecasted figures presented in table 2 are to be considered, then by 2020
Doha International will witness annual aircraft movements in excess of 320,000, and over 61 million
passengers. Clearly the airport in its present condition will not be able to handle this increase in demand.
Qatar Airways is a state owned airline and much of Qatar’s future ambitions rely on Qatar Airways
continuing to grow. As such in 2003 the Qatari government realized that the current airport would not be
able to sustain future demand levels and began planning for a new airport. In 2006 ground was broken on
what will eventually become Qatar’s primary international airport; Hamad International Airport. The new
airport is being built south of the existing airport on land reclaimed from the Arabian Gulf. The airport was
originally set to open in 2009, but a series of construction delays pushed the opening date back to 2014.
All major construction activities at the airport have been completed and the passenger terminals are in
the process of being outfitted. The first flight to arrive at the new airport was a Qatar Airways cargo flight
from Europe, which unofficially inaugurated the new airport in early December 2013. Figure 7 shows the
location of the new airport as well as its major facilities.
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Figure 7) Hamad International Airport – New International Airport in Doha
As shown in figure 7 the new airport consists of two parallel runways coupled with a midfield
terminal. The project consists of three construction phases. Phases 1 and 2 consist of the two runways as
well as the main passenger terminal. A cargo facility able to handle 1.4 million tonnes a year is also
included as part of the first 2 phases. The new passenger terminal will accommodate 28 million passengers
a year and provides 41 contact gate as well as 22 remote gates. Phase 3 will add an additional 40 contact
gates as well as expand the passenger terminal to accommodate 50 million passengers annually. Currently
phases 1 and 2 are set for major completion in 2014 and the project as a whole is scheduled for final
completion in 2015.
The forecasted cost of this new airport is in excess of $15 billion. The two runways that were built
for this airport are among the longest in the world. The southern runway shown in figure 7 is currently
the eighth longest commercial runway in the world. It is only 100 feet shorter than runway 16R/34L at
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Denver International, which is the longest commercial runway in the United States. Qatar Airways will be
managing the new airport which is not a typical arrangement for other airlines. By the time it is completed
in 2015 the airport will be able to accommodate 50 million passengers and approximately 320,000 annual
aircraft movements. When considering the forecast presented earlier we note that based on current
growth trends, Qatar Airways alone will serve 45 million passengers and operate over 240,000 flights from
Hamad International Airport. If its current share of 76% of all aircraft movements remains, that would
translate into over 320,000 annual aircraft movement by 2020 at the new airport. This would mean that
demand would exceed capacity at the new airport only 5 years after its completion.
The new airport was planned in 2003 and construction commenced in 2006. Qatar Airways placed
several large aircraft orders after construction started which may mean that the traffic forecast used for
the initial planning did not take into account the airline’s ambitious growth projections. The location of
the new airport as well as its configuration limits future growth potential. As the planners of the new Hong
Kong and Kansai airports learnt, building floating runways is extremely expensive. Labor costs in Qatar are
significantly lower than those of Hong Kong and Japan, but it still cost over $15 billion to build this new
airport. If demand does indeed outstrip capacity by 2020, Qatar will have two options to consider. It could
further expand the airport into the Arabian Gulf, though this would be extremely costly. The second option
would be to connect the runway from the old airport to the new airport, thereby making the new airport
a 3 runway airport. The older runway could be used exclusively for cargo flights which are less sensitive
to taxiing times than commercial aircraft. In regards to the passenger terminal the outlook is more
constrained. From figure 7 we note that the land to the east of the new passenger terminal has already
been dedicated to support and cargo facilities. The planners of the new airport have stated that they could
expand the passenger terminals to accommodate 93 million passenger annually. From figure 7 it is difficult
to see where it is they could build a new terminal to accommodate an additional 43 million passengers.
One possibility is to reclaim land to the west of the new terminal. Another option would be to build
another terminal north of the second runway. This would serve the purpose of essentially segregating
Qatar Airways’ passengers from those of other airlines, similar to what is currently done at major airports
across the world. Many of Qatar Airways’ passengers connect through Doha on other Qatar Airways
flights. Passengers on low cost carriers typically do not connect onto mainline flights and as such
segregating them would not be a major issue.
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Abu Dhabi International Airport (AUH) – Etihad Airways Hub
Etihad Airways is the youngest of the emerging carriers having been founded in 2003. Over the
past decade it has grown dramatically and is poised to continue growing for the foreseeable future. Much
as with Doha, its hub at Abu Dhabi International Airport was a major focus city for Gulf Air. The UAE
formally withdrew from Gulf Air three years after Etihad Airways was founded. Etihad Airways was
founded after the rulers of Abu Dhabi took note of neighboring Dubai’s success with Emirates. Etihad is
currently designated as the national flag carrier of the UAE. It has successfully applied Emirates and Qatar
Airways’ model of competing with established Asian and European carriers on long haul routes, by offering
convenient connections through its Abu Dhabi hub. Unlike the other two carriers in the Arabian Gulf,
Etihad has been very active in acquiring ownership stakes in other airlines. It currently owns stakes in Air
Berlin, Serbia Airways, Jet Airways and Virgin Australia among others. This has resulted in Air Berlin being
the second largest carrier for flights from Abu Dhabi to Europe. Etihad’s recent acquisition of a stake in
India’s Jet Airways should also result in an increase of operations by that carrier at Abu Dhabi International
Airport.
Figure 8) Abu Dhabi International Airport – Current Configuration
In the late 1960s Bateen Airport was opened near downtown Abu Dhabi. It was the only
international airport in Abu Dhabi up until 1982 when Abu Dhabi International Airport was opened 30
kilometers from downtown Abu Dhabi. Bateen Airport was then designated as a military airport before
the Abu Dhabi Airports Company (ADAC) decided to convert it to an executive jet airport in 2008. The first
passenger terminal built at the new Abu Dhabi International Airport was the semi-circular terminal 1. At
the time when Gulf Air was the largest carrier at Abu Dhabi, terminal 1 was able to service the roughly 5
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million passengers who passed through the airport. By the mid-1990s crowding was becoming an
increasing problem at the airport and terminal 1 was reconfigured and expanded to accommodate the
influx of passengers. Terminal 1’s semi-circular shape limited expansion options and as a result terminal
2 was planned and built in the early 2000s to increase the airports’ capacity. When it Etihad was formed
in 2003 it initially operated out of Terminal 1. By 2007 it was serving over 5 million passengers annually
which exceeded the capacity of terminal 1. ADAC had been planning on further expanding the airport to
accommodate the new flag carrier and in 2009 terminal 3 was opened. Terminal 3 is currently used
exclusively by Etihad. The completion of terminal 3 increased the airports’ capacity to over 12.5 million
passengers annually. Improvement are currently underway to further increase the airports’ capacity to 17
million passengers by 2017.
When Abu Dhabi International was first built there was only a single 14,000+ ft. runway. As
operations increased at the airport a second parallel runway was built roughly 2 kilometers away from
the existing runway. The new runway was completed in 2008 thereby allowing the airport to increase its
peak capacity from 18 air traffic movements (ATMs) per hour to 75 ATMs. This theoretically upgraded the
airports capacity from 157,000 to 657,000 movements per year. The separation between the two runways
is sufficient to allow for simultaneous approaches and departures. This is especially important considering
that not only are the volumes for flights increasing, but the average aircraft size is also increasing. Figure
9 shows how passenger and aircraft movement numbers have evolved at Abu Dhabi International over
the past 5 years.
Figure 9) Passenger and Aircraft Movements at Abu Dhabi International
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As was the case with Doha Airport, Abu Dhabi has seen demand from FAA type IV aircraft nearly
vanish over the past decade. Figure 10 below shows that in 2004 there was a near even split between
type III, IV, & V aircraft at Abu Dhabi. By 2013 type III aircraft accounted for 55% of all movements and
type V accounted for roughly 42%. Etihad has ordered 10 Airbus A380s, 62 Airbus A350s, 71 Boeing 787s
as well as 43 Airbus A320s. All of these aircraft are due for delivery through the end of the decade. The
addition of these aircraft to its fleet will surely result in type V aircraft gaining a larger share of the
movements at Abu Dhabi. Furthermore the addition of the Airbus A380 will result in type VI aircraft
gaining a small percentage. That small percentage does however consume more capacity than other types
due to the necessary separation requirements as well as runway occupancy times.
Figure 10) Aircraft movements by FAA Airplane Design Group Designation at AUH
In 2013 Abu Dhabi International will have welcomed over 16 million passengers and serviced over
120,000 aircrafts. As previously stated the current capacity of the passenger terminals is 12.5 million
passengers which indicates that the airport is operating above capacity. The renovation and expansion of
the existing passenger terminal buildings will bring the declared capacity up to 17 million passengers
within the next few years. Given the rate at which passenger traffic is increasing those renovations may
be too little too late. The government of Abu Dhabi recognized that in order to compete with Emirates
and Qatar Airways it would have to provide Etihad with an airport capable of handling its ever increasing
passenger numbers. As such in the early 2010’s the government announced the construction of a new
midfield terminal at Abu Dhabi International. The location of the new terminal is shown in figure 11.
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Figure 11) New Midfield Terminal Location at Abu Dhabi International
Construction started on the new midfield terminal in 2013 and is slated for completion in 2017.
Initially the new terminal will increase capacity by 30 million passengers annually. The current plans allow
for the new terminal building to eventually accommodate 40 million passengers bringing the airports’
overall capacity to roughly 55 million passengers per year. Further improvements include a new control
tower, cargo facilities as well as maintenance and support facilities. Many of these facilities will be located
near the new terminal. For the time being the land directly to the east of the new terminal will not be
developed. This may be to allow for the future construction of another terminal in that area. Etihad
Airways will be the primary occupant of the new terminal. Eight gates capable of handling the Airbus A380
are planned for the new terminal. Once completed the new terminal will provide 65 contact gates as well
as 14 remote parking stands. It is unclear which of the existing terminals at Abu Dhabi will remain
operational. Additionally the master plan also makes provisions for the construction of a third runway
located 2 km away from the existing runways. As of yet construction has not commenced on this third
runway.
Going back to the forecast previously presented we note that based on its current orders, Etihad
will serve over 25 million passengers by 2020. If it maintains its current share of passengers at Abu Dhabi
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that will mean that 42 million passengers will pass through the airport in 2020. Given the current
expansion plans it seems that the airport will be able to handle the increase in passenger numbers. In
regards to aircraft movement, the forecast calls for 210,000 movements by 2020. London Heathrow; the
world’s busiest 2 runway airport, currently handles over 400,000 annual movements with a similar mix of
aircraft as Abu Dhabi. Therefore it is reasonable to state that Abu Dhabi will not be constrained by its
current runways.
Dubai International Airport (DXB) – Emirates Hub
Emirates is the oldest of the three emerging carriers based in the Arabian Gulf. It was founded in
the 1980s by the government of Dubai. At the time Dubai was a secondary focus city for Gulf Air. This
limited the international traffic in Dubai and as such the decision was made to found an international
airline based in Dubai. Emirates started with two leased aircraft in 1985 which it used to operate short
haul routes within the region. By 2013 it operated the worlds’ largest all widebody fleet and had become
the largest carrier by international available seat miles. It has helped transform Dubai into a major
metropolitan area and is one of the worlds’ most recognizable airlines. In the mid-2000s it placed several
record breaking orders for Airbus A380s and Boeing 777s which caught the attention of the industry at
the annual air shows in Paris and Farnborough. In 2013 it partnered with Boeing to officially launch the
Boeing 777X at the Dubai Air Show with an order for 150 of the next generation widebody aircraft. It
currently has 200 widebody aircraft on order through the end of the decade. Despite having a fleet a fifth
the size of the major US carriers it is currently the fourth largest airline by ASMs generated. If it maintains
its current growth rates it will become the worlds’ largest airline by ASMs by the end of the decade.
Emirates’ was the first of the emerging carriers to successfully leverage the location of its hub. It
used its widebody fleet to launch long haul flights to both Europe and Asia. In doing so it was able to
provide one-stop service between Asian and European destinations that previously required multi-stop
itineraries. It is one of the few carriers that currently serves all six inhabited continents. In 2012 it was
able to establish a joint venture with Qantas that resulted in the Australian carrier severing its 17 year
agreement with fellow alliance member British Airways. Qantas and British Airways were at the time
providing service between Australia and Europe via Singapore. The relocation of Qantas’ European
connecting hub to Dubai resulted in a doubling of its European bookings, a much needed boost for the
struggling carrier. Emirates’ success in establishing itself as a major force in the airline industry is due in
large part to the improvements that were made at Dubai International Airport.
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Figure 12) Aircraft movements by FAA Airplane Design Group Designation at DXB
Figure 12 shows how dominated traffic at Dubai International is by widebody aircraft. From 2004-
2010 more than 70% of movements there were by widebody aircraft. In 2013 movements by narrowbody
aircraft, denoted by FAA group III, increased to 40%. This was due in large part to increased low cost carrier
activity at the airport. flydubai is one of the fastest growing LCCs in the region and is based at Dubai
International. Similarly to Emirates it is also owned by the government of Dubai. Emirates is currently the
largest operator of both the Airbus A380 and Boeing 777. It currently operates 40 Airbus A380s from Dubai
International which explains the 5% of FAA group VI in 2013.
Both aircraft movements and passenger numbers have steadily increased at Dubai International
over the past 5 years. Emirates currently accounts for 46% of the movements at Dubai International but
carries 65% of the passengers that pass through there. Currently Dubai International is the third busiest
international passenger airport and the sixth busiest cargo airport in the world. As both Emirates and
flydubai continue to grow so will the volume of traffic. The agreement between Emirates and Qantas will
also inevitably contribute to greater passenger and aircraft movements at Dubai International. Figure 13
displays the growth in passengers and aircraft movements at Dubai international. Dubai was particularly
affected by the global economic crisis yet despite that, it was able to record growth during that period.
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Figure 13) Passenger and Aircraft Movements at Dubai International
The current Dubai airport was first developed in the late 1950s. It first opened with a
1,800 meter compacted sand runway. At the start of the 1980s Dubai International was a stopping point
for many airlines traveling between Asia and Europe. The advent of long range jet aircraft as well as the
opening up of Russian airspace in the 1990s decreased airlines’ reliance on Dubai as a connecting point.
At the same time that those airlines were abandoning Dubai, Emirates was starting to rapidly expand its
operations. A 1997 master plan for the airport envisioned a multi terminal airport supported by two
runways. In 1998 Terminal 2 was opened followed by an additional concourse in 2000. Improvements
were made to the taxiways, runways and aprons. Terminal 3 was completed in late 2008 thereby
surpassing Beijing Capital Airports’ own terminal 3 as the largest terminal building in the world. Emirates
was already attracting the attention of the industry due to its aircraft orders and rapid expansion. It
received its first A380 later that year and in 2013 the worlds’ first A380 dedicated concourse was opened
at Dubai International, to serve Emirates eventual 140 strong fleet. This brought the overall passenger
capacity to 80 million per year. Terminal 2 was also upgraded during this period to handle 5 million
passengers and will continue to be upgraded in order to increase capacity. Terminal 2 is currently used by
low cost carriers at Dubai International. Figure 14 shows the current layout of Dubai International.
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Figure 14) Dubai International Airport – Current Layout
In 2012 more approximately 58 million passengers were served at Dubai International. That is well
below the airport’s current capacity of 80 million passengers. Returning to the forecast presented in table
2 we note that Emirates could be handling over 80 million passengers by 2020. When considering the
other airlines present at Dubai International, there could be as many 125 million. That would clearly
exceed the capacity of the current terminal buildings. Once again referring to figure 14 we note that the
airport is already surrounded by developed areas and there is not sufficient space within the grounds to
build a 50 million plus passenger terminal there. Furthermore the number of forecasted aircraft
movements at the airport are in excess of 570,000 which is far beyond what an airport with two close
parallels could reasonably achieve. The government of Dubai recognized these constraints early on and
decided that the best course of action was to build another airport in Dubai.
The possibility of building a second airport was first mentioned in the early 2000s. This new airport
was envisioned as part of a purpose built city called Dubai World Central. The master plan for the airport
called for a five runway three terminal airport to be completed by 2017. Due to the economic crisis the
project has been scaled back and the completion date pushed to 2027. Nevertheless construction
commenced in 2007 and in 2010 the partially completed airport opened with one runway. An Emirates
SkyCargo flight was the first to arrive at the new airport, which will eventually be able to service 12 million
tonnes of cargo annually. Hong Kong, which is the current busiest cargo airport, currently handles
approximately 4 million tonnes annually. By 2013 the first passenger terminal was completed and the first
commercial aircraft arrived. The new airport was named Maktoum International Airport (DWC) in honor
of Dubai’s late ruler.
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Figure 15) Maktoum International Airport Master Plan
Now that the new airport is operational the fate of Dubai International has become clearer. Initial
reports suggested that operations at the older airport would be significantly scaled down once DWC was
fully operational. Recent reports suggest that flydubai and most international airlines will make the move
to DWC leaving Emirates and its partners as the sole tenants at Dubai International. Gulf Air has already
stated that it will move its operations from Dubai International to DWC within the next few months.
Several other carriers, most notably European low cost carriers have already announced service to the
new airport. DWC’s capacity upon completion is roughly 125 million passengers. With five runways it is
highly unlikely that DWC will face any capacity issues related to aircraft movements. Proposed upgrades
to Dubai International will bring its overall capacity up to 100 million passengers. The Dubai metropolitan
area will thereby have the ability to handle 225 million passengers annually. Atlanta Hartsfield-Jackson,
the current busiest airport in the world, handles 90 million passengers annually. Figure 16 shows the
location of both the airports within the emirate of Dubai. Dubai International is located in the heart of
Dubai and is easily accessible by public and private transportation. Maktoum International by contrast is
50 km away. The area surrounding it is currently undeveloped but will eventually include residential and
commercial developments as part of the Dubai World Central project.
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Figure 16) Location of DXB and DWC in Dubai
Istanbul Ataturk Airport – Turkish Airlines Hub
Turkish Airlines is unlike the other three emerging carriers in many ways. It was founded in the
1930s, operates a mostly narrowbody fleet, its primary hub is not in the Arabian Gulf and it is has a large
domestic network. It experienced many ups and downs during its 80 years of existence. A reorganization
and privatization of the airline in the 1990s revitalized it and for the past decade it has matched the rapid
growth of the three emerging gulf carriers. Turkey as a nation has been rapidly modernizing over the past
two decades and is becoming a major destination for investors. Istanbul holds the distinction of being one
of the only cities to be located on two continents – Europe and Asia. Turkish Airlines has successfully
leveraged its proximity to Europe by serving many previously underserved markets. In fact it flies to more
nations than any other airline and serves the fourth largest number of destinations. Only the three major
US legacy carriers serve more destinations than it currently does. In 2012 alone it added 30 new
destinations to its network. Since it is much closer to Europe than the three other emerging carriers, it
can offer multiple daily frequencies on narrowbody aircraft to multiple destinations. Its cost structure is
significantly lower than that of the European carriers it competes against which allows it to offer cheaper
fares. This has allowed Turkish Airlines to achieve 10% annual growth rates in passengers, ASMs and RPMs
over the past decade.
Istanbul is one of the oldest cities on earth. Construction projects frequently uncover
archaeological ruins which makes it difficult to undertake large scale projects such as airports. Turkish
Airlines current primary hub at Istanbul Ataturk Airport is located in the European side of Istanbul, 24 km
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away from the centre of Istanbul. It was first built in the 1920s and has since then undergone many
renovations and upgrades. Currently the airport consists of 2 passenger terminals (1 domestic, 1
international), a general aviation facility and a cargo terminal. There are two closely spaced parallel
runways and a third which runs nearly perpendicular to the parallel pair. Among the emerging carrier hubs
it is the busiest in terms of aircraft movements and second busiest in regards to passenger numbers.
Figure 17 shows how both those figures have changed over the past 5 years at Istanbul Ataturk.
Figure 17) Passenger and Aircraft Movements at Istanbul Ataturk
Istanbul Ataturk is currently the sixth busiest airport in Europe in terms of annual passengers. In
2012 it recorded a 20.6% growth in the number of passengers it served. The highest growth rate recorded
by the top 5 busiest airports was a 2.6% increase at Amsterdam Schiphol. The growth in traffic at Istanbul
Ataturk over the past two decades has outpaced efforts to expand the airport and limited Turkish Airlines’
growth plans. In 2001 a new single runway airport in Istanbul was inaugurated. The new airport, Sabiha
Gokcen was built on the Asian side of Istanbul 35 km from the centre of the city. It was originally intended
to serve as a domestic airport but due to the rapid growth of air travel in Istanbul, the decision was made
to allow it to serve international flights. The first two terminal buildings that were built there were
designed to handle 3.5 million passengers combined. The renovation of the international terminal
increased its capacity to 25 million annual passengers. Istanbul Ataturk’s declared capacity currently
stands at 50 million passengers annually and 50 movements per hour. By 2012 it was reported that
0
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movements at Ataturk were at peak capacity for 90% of the day indicating that the airport was nearing its
practical capacity.
Figure 18) Aircraft movements by FAA Airplane Design Group Designation at IST
When considering the mix of aircraft served at Istanbul Ataturk we note the remarkable difference
between it and the other emerging carrier hubs. Over the past decade more than 80% of the flights served
there were operated with narrowbody aircraft. As previously mentioned Turkish Airlines maintains a large
narrowbody fleet and currently has over 160 on order through the end of the decade. Though many of
them will be used to replace older aircraft, the majority are intended to bolster the existing fleet. AS
previously mentioned Turkish Airlines has a large domestic network. The Istanbul metropolitan area
includes roughly 15 million people and demand for air travel from the area is increasing annually. The
three other emerging carriers do not have domestic networks of any kind and are focused solely on
connecting traffic. Turkish Airlines has to carefully balance its network to serve both local demand as well
as connecting traffic from Europe and Asia.
The Turkish aviation authorities have stated that they plan on building a fourth runway at Istanbul
Ataturk on land currently owned by the military. The new runway would run parallel to the third runway
at Istanbul Ataturk. Figure 19 shows the current configuration of Istanbul Ataturk. Analysts have stated
that this will still not be sufficient to meet demand. Based on current growth rates and Turkish’s aircraft
orders, the forecast predicts that Turkish airlines will be serving over 78 million passengers through
Istanbul Ataturk in 2020. Total movements will be in excess of 110,000 which will not be feasible given
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that the runways are already operating near capacity for most of the day. The growth of the Turkish low
costs carriers Pegasus and Sunexpress will also exacerbate these capacity issues.
Figure 19) Istanbul Ataturk Configuration
A study concluded that all current proposals to expand and reconfigure the two airports in
Istanbul would result in a 100 million passenger annual capacity. Demand is forecasted to exceed that by
2017 creating a dilemma for the government. It would like to see its aviation industry continue to grow
but it is becoming increasingly difficult to squeeze extra capacity out of the existing infrastructure. After
reviewing their options the government decided to build a third airport in Istanbul to address these
capacity issues. The proposal calls for a new 6 runway, multi terminal airport to be built 35 km to the
northwest of the city on the coast of the black sea. The airport is to be built in several stages and will
eventually become the world’s largest airport. It will be able to accommodate 150 million passengers once
it is complete. In May 2013 the government awarded the build operate transfer contract to a Turkish joint
venture. The first stage will involve the construction of three independent runways and a 90 million
passenger terminal along with the required support structures such as maintenance hangars and air traffic
control tower. The second stage of the project will involve constructing a fourth runway and associated
taxiways. The third and fourth stages each include the construction of a 30 million passenger terminal and
a runway. The site selected for the new airport is not inhabited but there are open pit coal mines which
need to be filled. Construction is slated to start in 2017. There are few details available as to when the
project will be completed but given the scope it may be well into the next decade before it is completed.
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Figure 20) Airport locations in Istanbul
Summary
The growth of the emerging carriers has been a remarkable trend over the past decade. Their
expansion has affected many of the world major international carriers, supported the ambitions of the
two major manufacturers and helped develop the Middle East. Many in the industry question how they
have been able to achieve their remarkable growth, and whether or not it is sustainable in the long run.
While there certainly are concerns that they are expanding too rapidly, all recent trends and forecasts
indicate that they will be able to grow over the next decade. Their remarkable growth has forced their
home airports to undertake ambitious expansion plans. Dubai and Istanbul are both currently in the
process of building new airports that can handle over 100 million passengers annually. Doha will open a
new airport early next year to commercial traffic and Abu Dhabi is in the midst of constructing a new
terminal. The forecast that was used in this study predicts that each of these carriers will all need to
more than double their current passenger numbers in order to fill their incoming aircraft. Their home
airports will need to take into account these projected figures to not only serve the passengers, but also
ensure that their facilities are able to handle the influx of widebody aircraft. Though we have not
analyzed each expansion plan in depth, it stands to reason that the construction of the two new mega
airports in Dubai and Istanbul will serve those airlines for the foreseeable future. In Doha it is unclear
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whether the new airport which was 10 years in the making, will be able to handle the forecasted traffic
beyond 2020. Finally Abu Dhabi, home to the youngest of the emerging carriers seems prepared and
willing to expand its facilities. Whether or not each of these carriers achieves the forecasted passenger
and movement numbers remains to be seen, but it will certainly be interesting to see how they evolve
over the next decade.
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References
• De Neufville, R. and A. Odoni “ Airport Systems Planning, Design and Management” 2nd Edition,
McGraw Hill, New York, 2013
• “Emirates: In A Sweet Spot” Financial Times website, December 8 2013
http://www.ft.com/intl/cms/s/0/c274e63e-580c-11e3-82fc-00144feabdc0.html#axzz2mxfZ1L5D
• “My Airport’s bigger than yours: Middle East’s big aviation ambitions” CNN.com, September 2,
2013 http://edition.cnn.com/2013/08/30/travel/my-airports-bigger-than-
yours/index.html?iid=article_sidebar
• “Dubai Airport continues ascent over traditional international hubs” Centre for Aviation, April
15, 2013 http://centreforaviation.com/analysis/dubai-airport-continues-ascent-over-traditional-
international-hubs-104857
• “Some European Airports may oppose 3rd airport in Istanbul” Turkey Tribune, October 10, 2013
http://www.turkeytribune.com/turkey-tribune/european-firms-may-oppose-3rd-airport-
istanbul.html
• “The New airport in Istanbul: expectations and opportunities” Saldiraner, Y, Journal of Case
Research in Business and Economics, http://www.aabri.com/manuscripts/131548.pdf
• Abu Dhabi Airports Company Website
• New Doha International Airport Website
• Dubai International Airport Website
• TAV Istanbul Ataturk Airport Website
• All flight data accessed through Diio Mi portal. Data provided through Schedule Reference
Service (SRS)