meed-logo

line1 line2 line3
SIGN IN / REGISTER

Jeddah plans $31bn airport expansion

29 May 2023

 

Register for MEED’s guest programme 

Jeddah Airports Company (Jedco) plans to transform King Abdulaziz International airport (KAIA) into one of the world’s largest airports with a SR115bn ($31bn) expansion plan that will increase its capacity to 114 million passengers a year.

The largest components of the plan cover the design and expansion of Terminal 1 and the construction of a new passenger terminal to be called Terminal 2.

The expected completion date for the expansion project is 2031.

Terminal plans

The Terminal 1 project comprises basic infrastructure and enabling works, the installation of new gates, air bridges and parking aprons, the extension of the automatic people mover, new baggage conveyor systems and lounges, with the goal of increasing annual passenger capacity by 15 million.

Work on the multibillion-dollar scheme is scheduled to start this year, with completion targeted for 2026.

The Terminal 2 project aims to increase the airport’s total capacity to 114 million passengers a year, almost tripling the airport’s 40 million limit today.

Due to start in 2026 and end by 2031, the project will involve constructing a completely new terminal building with dozens of gates, new taxiways, aprons, roads, utilities, and baggage handling and other software systems. It is likely to be worth in excess of $10bn to build.

Jedco is also planning to construct a fourth runway starting in 2025 and completing by 2029 to cope with the increased traffic. Due to space limitations, the new runway will require substantive infrastructure relocation work to accommodate it.

Passenger traffic-focused developments are not the only element of the plan. As part of growing the airport’s commercial proposition, the client is also due to start developing a new logistics area later this year.

Covering more than 3 square kilometres, the facility will house new customs and service buildings as well as several leasable warehouses for the private sector. Construction of the facilities will be implemented in phases with an ultimate scheduled completion date of 2029.

Concurrently, Jedco is building a new Hajj and Umrah terminal. Pilgrims comprise a large portion of passenger traffic, and the new arrivals and departures hall for budget airlines will be able to handle 15 million passengers a year. The project is expected to be completed by 2025.

Another project starting this year is the construction of a new baggage handling facility to expand the airport’s existing capacity. The building will be located next to Terminal 1 and will be integrated with the existing conveyor belt systems.

Passenger demand

The project investment programme is a result of Jedco’s forecast that annual demand will reach 114 million passengers by 2030. Of this figure, the authority estimates 51 million will come from Saudi Arabian Airlines, 21 million from international airlines, and 13 million and 12 million from budget airlines Flynas and Flyadeal, respectively.

The forecast and plans were created in conjunction with key drivers of future passenger demand in the Mecca and Jeddah region, including gigaproject real estate developers Roshn and Uptown Jeddah, air cargo handler Saudi Logistics Services (SAL), and the General Civil Aviation Authority (Gaca) with its subsidiary Matarat Holding. Engineering firms Atkins, Mace and DGJ also inputted into the process. The three companies are the consultants on the capital projects investment plan.

KAIA has three operational terminals. Opened in 2018, Terminal 1 is one of the world’s largest passenger terminals, and caters primarily for the state carrier and domestic flights. The North Terminal handles international airlines, while the Hajj Terminal is dedicated to pilgrim traffic.

Construction work on KAIA has been a key driver of airport-building activity in Saudi Arabia in the past. In 2010, there were over $7bn of contract awards for work at the airport, marking the most active year for airport construction activity on record, according to regional projects tracker MEED Projects.

There are other major airport projects planned in Saudi Arabia. In November, Saudi Arabia’s Crown Prince Mohammed bin Salman bin Abdulaziz al-Saud announced the masterplan for King Salman International airport in Riyadh. If completed on time in 2030, it will become the largest airport in the world in terms of passenger capacity.

The airport aims to accommodate up to 120 million passengers by 2030 and 185 million by 2050. For cargo, the goal is to process 3.5 million tonnes a year by 2050.

Neom airport

Another major airport is planned for Neom. US firm Aecom confirmed on 22 March that it had been awarded a contract to provide project management consultancy (PMC) services for the new airport project.

The airport will be inland, close to the Tabuk end of the 170-kilometre-long Line development. Neom International airport is separate from the Neom Bay airport, which started receiving commercial flights in 2019.

Although not confirmed, it is understood that the first phase of the airport will have the capacity to handle 25 million passengers a year. A second phase could take the capacity up to 50 million passengers a year. There is an aspiration for the airport to become the largest in the world, with a capacity of 100 million passengers a year. 

Regional airports

Smaller domestic airports are also being developed. In March, Matarat signed a three-year contract with France’s Egis Group to provide technical support and project management services for 26 regional airports.

The contract aims to establish phased project management portals, update airport project management policies and procedures, and provide technical support for planning and designing.

The contract also involves following up on the implementation of capital projects with Matarat subsidiaries, including Riyadh Airports Company, Jeddah Airports, Dammam Airports and Cluster2. 

https://image.digitalinsightresearch.in/uploads/NewsArticle/10893610/main4549.jpg
Edward James

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • Oman opens bids for 1GW battery storage advisory role

    4 June 2026

    Oman’s Authority for Public Services Regulation (APSR) has opened technical bids for a consultancy contract supporting a planned 1,000MW/four-hour battery energy storage system (bess) project.

    The tender seeks independent regulatory, technical and commercial validation services for the scheme. The project is planned with a rated capacity of 1,000MW and a storage duration of four hours, equivalent to 4,000 megawatt-hours (MWh) of energy storage.

    According to a tender board notice, technical bids were opened on 25 May.

    Thirteen companies submitted proposals including:

    • Afry Management Consulting (Sweden)
    • CESI Middle East (Italy)
    • DNV Dubai Branch (Norway)
    • Engineering Systems Group (Kuwait)
    • ILF Consulting Engineers (Austria)
    • Innovision Engineering Consultancy (UAE) 
    • Mott MacDonald (UK)
    • Sargent & Lundy Abu Dhabi (US)
    • Surbana Consultants Dubai Branch (Singapore)
    • Tractebel Engineering Consultancy (Belgium)
    • TUV Rheinland (Germany)
    • Universal Consulting Engineering (Egypt)
    • WSP International (Canada)

    As previously reported, APSR issued the request for proposals in April as part of wider plans to increase the share of renewable energy in the sultanate.

    The sultanate’s first utility-scale solar photovoltaic (PV) plant integrated with battery energy storage (Ibri 3) entered construction at the beginning of the year, comprising a 500MW solar PV plant and a 100MWh bess system.

    Last month, state offtaker Nama Power & Water Procurement Company signed a power-purchase agreement with local firm O-Green for Oman’s first round-the-clock renewable energy project.

    The company is also seeking consultants to provide separate environmental, social and governance and legal advisory services.

    Renewable energy is expected to increase from 4% of the generation mix in 2024 to 30% by 2030, driving the push for more utility-scale storage projects.

    Over roughly the same period, demand is forecast to double, reaching 10 terawatt-hours by 2031.

    READ THE JUNE 2026 MEED BUSINESS REVIEW – click here to view PDF

    Global energy sector forced to recalibrate; Conflict hits debt issuance and listings activity; UAE’s non-oil sector faces unclear recovery period amid disruption.

    Distributed to senior decision-makers in the region and around the world, the June 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17106014/main.jpg
    Mark Dowdall
  • Building around the strait

    4 June 2026

    Commentary
    Colin Foreman
    Editor

    The closure of the Strait of Hormuz has turned a lingering, and previously unlikely, threat into reality in 2026. The shutdown of the maritime chokepoint, which is about 33 kilometres wide at its narrowest point, has plunged the global economy into crisis, with fuel prices spiking and fears of energy shortages growing. While diplomatic efforts are under way to resolve the disruption, the GCC’s geographic Achilles heel remains.

    The closure has also highlighted the importance of alternative logistics and energy corridors. Saudi Arabia’s East-West pipeline has enabled the export of 7 million barrels a day of oil from the Gulf coast across the kingdom to the Red Sea, while the UAE has rapidly scaled up operations at Fujairah and directed Adnoc to accelerate development of its 520km West-East pipeline.

    Others have had fewer options. Geographically constrained states such as Kuwait recorded zero crude exports in April, reflecting their near-total dependence on shipping oil through the Strait of Hormuz.

    For the projects market, the crisis is already having, and will continue to have, a significant impact. Ongoing projects are struggling with disrupted supply chains and resulting cost escalation, while future spending is likely to be diverted towards schemes that improve the GCC’s access to markets outside the Gulf.

    For the projects market, the crisis is already having, and will continue to have, a significant impact

    For oil and gas exports, proposed pipeline routes would run south from Kuwait through Saudi Arabia and the UAE and into Oman, enabling shipments from expanded ports on the Arabian Sea. For goods entering the region, the GCC railway scheme has taken a step forward, with procurement starting in May.

    These projects will cost tens of billions of dollars and will take years to complete, which means the events of 2026 will shape the region’s infrastructure priorities for the coming decade.

    READ THE JUNE 2026 MEED BUSINESS REVIEW – click here to view PDF

    Global energy sector forced to recalibrate; Conflict hits debt issuance and listings activity; UAE’s non-oil sector faces unclear recovery period amid disruption.

    Distributed to senior decision-makers in the region and around the world, the June 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here

     

     

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17105852/main.gif
    Colin Foreman
  • Fitch cuts global airport outlook on Iran war

    4 June 2026

    Fitch Ratings has revised its global airport sector outlook to ‘deteriorating’ from ‘neutral’, warning that disruption linked to the Iran conflict is creating a more challenging operating environment for airports and airlines and clouding traffic visibility into 2026.

    In a note issued on 3 June, Fitch said the conflict has increased uncertainty over “regional airspace availability, airline operations and travel demand”, with implications for route stability and the quality of traffic flows. While most airport operators’ traffic and earnings have remained broadly stable so far this year, the ratings agency expects a softer macro backdrop, a less favourable passenger mix and weaker non-aeronautical revenues to increase sector risks over the next 12 to 18 months.

    The revised outlook is particularly relevant for the Gulf, where major airports have built business models centred on international connectivity, long-haul flying and transfer traffic. Fitch said the disruption is particularly affecting airports with exposure to transfer passengers and internationally connected airline networks — categories that include the region’s largest hubs.

    Hub exposure

    Although the agency did not name Gulf airports specifically, its analysis implies that hubs reliant on long-haul corridors and complex network connectivity are more exposed to “rerouting risk, changing airline capacity decisions and weaker visibility on international demand”. For Gulf operators, that risk is compounded by the potential for further airspace restrictions and ongoing uncertainty around the availability of key flight paths linking Asia, Europe and parts of Africa.

    At the same time, the agency noted that some “Asia-Pacific airports have benefited from the redistribution of transit and long-haul traffic” away from disrupted Gulf hubs. Any sustained diversion of connecting passengers would be material for Gulf airports because duty-free, retail and food and beverage spending is typically stronger among international transfer travellers than point-to-point passengers.

    Fitch’s change of outlook also reflects a broader slowdown in the sector’s growth trajectory. Global passenger growth was strong in 2025 and early 2026, but the pace has started to cool from the post-pandemic recovery period. Fitch pointed to the International Air Transport Association’s latest projection of “4.9% passenger traffic growth in 2026”, a deceleration versus 2025, with early-2026 monthly data showing the slowdown already under way.

    Fitch also warned that non-aviation revenues could come under pressure, particularly where passenger mix shifts away from high-spending travellers. The agency expects a “low single-digit decline in nominal retail revenue for European airport operators” this year, highlighting how quickly discretionary spend can soften when operating conditions turn more volatile.

    Fuel availability and pricing is another risk. Fitch said there is rising uncertainty about jet fuel availability, especially in Europe due to disruption to Middle East supply, potentially increasing airline costs and encouraging capacity reductions. The agency expects fuel reserves to cover the summer months in Europe, even if the Strait of Hormuz remains effectively closed, but warned that winter operations could be more challenging if disruption persists.

    Higher airfares and fuel surcharges could also weigh on near-term demand, Fitch added — a headwind for Gulf airports that have benefited in recent years from strong leisure demand and the restoration of long-haul travel.

    Fitch expects airport performance to become more uneven, with point-to-point leisure airports typically better positioned than large hubs reliant on transfer traffic and international corridors. The ratings agency cited European examples, contrasting airports such as Barcelona or Venice with Heathrow and the Paris airports.

    The same dynamic could play out in the Middle East: airports with a large share of local origin-and-destination demand may be relatively insulated compared with major connecting hubs whose business models depend on stable long-haul routings and predictable network planning by global airlines.

    The risks for the Gulf’s aviation sector were highlighted again on 3 June when Iranian drones struck Terminal 1 at Kuwait International airport, causing significant structural damage. The incident was the third major drone strike on the hub in recent months. On 1 April, a drone strike hit fuel tanks managed by Kuwait Aviation Fuelling Company, sparking massive fires. On March 28, another multi-drone raid severely damaged the airport’s primary radar systems.

    Other airports in the region have been damaged since the conflict began, including Dubai International airport, Zayed International airport in Abu Dhabi and Hamad International airport in Doha.

    READ THE JUNE 2026 MEED BUSINESS REVIEW – click here to view PDF

    Global energy sector forced to recalibrate; Conflict hits debt issuance and listings activity; UAE’s non-oil sector faces unclear recovery period amid disruption.

    Distributed to senior decision-makers in the region and around the world, the June 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17105933/main.jpg
    Colin Foreman
  • Iran conflict curbs migrant labour flows to Gulf

    4 June 2026

    The International Labour Organisation (ILO) has flagged early signs that the conflict involving Iran is affecting the Gulf’s labour market. Speaking to CNBC, the ILO’s acting deputy chief, Sher Verick, said departures of migrant workers from sending countries have fallen sharply this year.

    “We don’t yet have numbers about those leaving the Gulf, but what we have are numbers that show that the departures of migrant workers from sending countries are significantly down,” Verick said. “For example, in the Philippines, the departures year on year are down by 78%.”

    Verick said disruptions in the Middle East are preventing workers from travelling to take up jobs and earn income, with knock-on effects for remittances that support household consumption, education and healthcare in sending countries. He added that the ILO would be watching for data on return flows from the Gulf back to Asian sending markets.

    Job risks

    The ILO has also assessed the share of jobs most exposed to conflict-related disruption. “Globally, we see around 15% of employment in that high exposure category, but this is much higher in the Middle East, at over 50%, and in Asia Pacific at around 22% of employment,” Verick told CNBC.

    Sectors most affected include transport, given reliance on fuel and other energy sources, and manufacturing due to supply chain exposure. Tourism-linked activities are also vulnerable, while agriculture is affected by disruption to fertiliser supply and pricing.

    A report by Fitch in early June said the conflict is placing several sectors across the GCC under severe operational and financial strain. Industries including aviation, hospitality, chemicals and residential real estate development face heightened vulnerabilities.

    Airlines are grappling with route disruption and higher fuel costs, while the hospitality sector has seen weaker occupancy amid security concerns and travel disruption. Regional chemical producers face higher feedstock prices, and residential real estate developers risk slower investment, which could dampen employment in construction – a sector that relies heavily on migrant labour.

    READ THE JUNE 2026 MEED BUSINESS REVIEW – click here to view PDF

    Global energy sector forced to recalibrate; Conflict hits debt issuance and listings activity; UAE’s non-oil sector faces unclear recovery period amid disruption.

    Distributed to senior decision-makers in the region and around the world, the June 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17105894/main.gif
    Colin Foreman
  • Read the June 2026 MEED Business Review

    4 June 2026

    Download / Subscribe / 14-day trial access

    For decades, the Strait of Hormuz has served as a critical artery of the global energy system. Despite being only 33 kilometres wide at its narrowest point, this strategic maritime passage has traditionally handled around one-sixth of global oil consumption and nearly one-third of worldwide liquefied natural gas trade.

    Following Iran’s effective closure of the strait in 2026, Gulf states have been compelled to rapidly identify and develop alternative transport corridors. This effort extends beyond safeguarding oil exports from the region to ensuring the continued flow of food, consumer products and industrial supplies that underpin the Gulf’s economies. Read more here. 

    June’s market focus is on Iraq, which is entering mid-2026 with the largest project pipeline in its post-2003 history, encompassing more than $420bn in planned and ongoing investments. However, the country faces an exports collapse that could challenge its ability to deliver this ambitious programme.

    This edition also includes our Top 100 report – an annual ranking published by MEED that identifies the 100 largest publicly listed companies in the Middle East and North Africa based on their market capitalisation.

    In the latest issue, we explore why the UAE’s Opec departure fulfils multiple ends; investigate why insurers will only cover a fraction of war damage to oil and gas facilities; analyse Saudi Arabia’s real estate ownership reforms; and examine the first trade deal between the GCC and a G7 nation.

    We hope our valued subscribers enjoy the June 2026 issue of MEED Business Review. 

     

    Must-read sections in the June 2026 issue of MEED Business Review include:

    > AGENDA: Gulf races to reroute trade

    > EXPORT ROUTES: Regional war boosts oil and gas pipeline project activity

    > CURRENT AFFAIRS: UAE’s Opec departure fulfils multiple ends

    INDUSTRY REPORT:
    MEED Top 100
    > Middle East stocks recover unevenly

    > OIL & GAS: Insurers will only cover a fraction of war damage to oil and gas facilities

    > LEADERSHIP: Building the infrastructure that makes net zero possible

    > LEGAL: Saudi Arabia’s foreign property ownership milestone 

    > TRADE TALKS: UK-GCC trade deal talks conclude

    > IRAQ MARKET FOCUS: 
    > COMMENT: Iraq’s reform window narrows
    > GOVERNMENT: Al-Zaidi takes Iraq’s premiership under US shadow
    > BANKING: Financial challenge tests Iraq’s resolve
    > ECONOMY: Iraq enters era of resilience, reform and rising risks 
    > OIL & GAS:     Iraqi oil and gas sector in crisis
    > POWER & WATER: Focus shifts to delivery of Iraq utilities expansion
    > CONSTRUCTION: Momentum builds in Iraq’s post-war construction sector

    > MEED COMMENTS: 
    >     Institutional capital sees past conflict risk
    > Gulf conflict fails to slow Dubai’s projects push
    > Oman steps up hydrogen plans
    > Bidders assess partnership strategy for utilities projects

    > GULF PROJECTS INDEX: Gulf Projects Index resumes growth trajectory

    > APRIL 2026 CONTRACTS: Middle East contract awards

    > ECONOMIC DATA: Data drives regional projects

    > OPINION: Hoping for a long, cool summer

    > BUSINESS OUTLOOK: Finance, oil and gas, construction, power and water contracts

    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17088038/main.gif
    MEED Editorial