meed-logo

line1 line2 line3
SIGN IN / REGISTER

UAE aviation returns to growth

12 October 2023

More news from the UAE’s transport sector: 

> Contractors start building Abu Dhabi light rail
> Sharjah airport award expected by the end of 2023
> Turkish firm wins $187.5m Dubai road upgrade
> Emirates and Shell Aviation sign sustainable fuel deal
> Abu Dhabi tenders Mid Island Parkway packages
> Abu Dhabi to open Midfield Terminal in November

 

Three years after their operations stopped during the Covid-19 pandemic, the UAE’s airports are again in expansionary mode.

Globally, aviation is returning to pre-pandemic levels. The International Air Transport Association (Iata) reported that traffic during August stood at 95.7 per cent of pre-Covid-19 levels based on revenue passenger kilometres.

Middle Eastern airlines performed particularly well. They posted a 27.3 per cent increase in August traffic compared to a year ago.

With Dubai International, Abu Dhabi International and Sharjah International airports serving as hubs for Emirates, Etihad and Air Arabia, the rebound in international travel has positively impacted passenger statistics. 

At Dubai International airport, the world’s busiest international hub, passenger traffic for the first half of the year surpassed 2019 levels. It handled 41.6 million passengers in the first six months of the year, slightly more than the figure recorded during the first half of 2019.

Dubai International’s top city destination was London with 1.7 million passengers, followed by Mumbai and Riyadh, with 1.2 million each. 

The strong performance during the first half of the year means Dubai Airports, which operates Dubai International, now expects 85 million passengers to be handled by the airport by the end of this year – just 1.6 per cent lower than its annual traffic in 2019.

Like Dubai International, Abu Dhabi International airport reported solid figures for the first half of this year. Passenger traffic grew to 10.2 million travellers, an increase of 67 per cent on the 6.1 million passengers handled during the same period last year.  

The cities with the highest passenger traffic included Mumbai with 461,081 customers, London with 374,017, Delhi with 331,722, Kochi with 316,460 and Doha with 261,117.

Sharjah International airport’s passenger numbers also increased during the first half of 2023. It received over 7 million passengers in the first half of the year, an increase of 24 per cent compared to the same period last year.

Airport projects

The rebound in air travel supports the business case for airport projects in the UAE after several years of relative inactivity.

According to regional projects tracker MEED Projects, there have been $340m of airport-related construction projects over the past five years, a significant drop from the more than $2bn registered for the previous five-year period.

In Dubai, plans are being considered for restarting the AED120bn ($33bn) expansion of Al-Maktoum International airport.

Located in the Jebel Ali area close to the Abu Dhabi border, the facility is Dubai’s second airport. It began operations in 2010 and has long been planned to ultimately replace Dubai International as the emirate’s primary airport. 

The expansion of Al-Maktoum International airport, also known as Dubai World Central (DWC), was officially launched in 2014. It involves building the biggest airport in the world by 2050, with the capacity to handle 255 million passengers a year.

An initial phase, which was due to be completed in 2030, will take the airport’s capacity to 130 million passengers a year. Altogether, the development will cover an area of 56 square kilometres.

Progress on the project slipped as the region grappled with the impact of lower oil prices and Dubai focused on developing the Expo 2020 site. Tendering for work on the project then stalled with the onset of the Covid-19 pandemic in early 2020.

Al-Maktoum airport is needed because Dubai International is unable to be expanded significantly. One of the key future challenges is runway capacity. It only has two runways, and with built-up urban areas on either side of the airport, there is no available land to build new runways on. 

Another driver for the project is regional competition. Dubai International is the region’s largest airport, and Emirates is the region’s largest airline. Plans in Saudi Arabia now challenge that position.

At the end of last year, the kingdom launched the masterplan for King Salman International airport in Riyadh, which aims to accommodate up to 120 million passengers by 2030 and 185 million by 2050. Earlier this year, it launched a new airline known as Riyadh Air.

Midfield terminal

Abu Dhabi International airport is at a different stage of development. In August, Abu Dhabi Airports announced that the Midfield Terminal building would begin operations in early November 2023.

Now known as Terminal A, the project will transform operations at the airport. It has 742,000 square metres of built-up area and can handle 45 million passengers a year, process 11,000 travellers an hour and operate 79 aircraft at any given time. 

The project has been under construction for over a decade and has faced multiple delays.

In 2021, Abu Dhabi Airports terminated its contract with the joint venture of Turkey’s TAV, Lebanon’s Consolidated Contractors Company (CCC) and the local Arabtec Construction for the construction.

The joint venture was awarded the AED10.55bn contract to build the Midfield Terminal building in June 2012, and sources in the market say the final contract value is closer to AED20bn.

Local contractor Trojan managed the remainder of the works for the project.

An expansion of Sharjah International airport, meanwhile, is planned to increase its capacity from eight to 20 million passengers a year. Sharjah Civil Aviation Authority is expected to award the estimated AED2.5bn main construction works package by the end of this year.

The investments planned for the UAE’s airports and rising traffic volumes mean the country will remain an important aviation hub in the future. 

https://image.digitalinsightresearch.in/uploads/NewsArticle/11210562/main.gif
Colin Foreman

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

Click here to register
Exclusive from Meed
Related Articles
  • June 2025: Data drives regional projects

    30 June 2025

    Click here to download the PDF

    Includes: Top 10 Global Contractors | Brent Spot Price | Construction output

    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/14171168/main.gif
    MEED Editorial
  • UAE-Turkiye financial links strengthen

    30 June 2025

    This package on UAE-Turkiye relations also includes:

    > UAE-Turkiye trade gains momentum
    > Turkiye’s Kalyon goes global

     

    Turkish bank DenizBank is one of Turkiye’s leading private banks and, as a wholly owned subsidiary of Emirates NBD since 2019, it is playing a leading role in developing business links between the UAE and Turkiye.

    Recep Bastug, who was appointed as DenizBank’s CEO in 2024, says there is great potential for trade between the two countries. 

    “Turkiye is a growing country,” he says. “We’ve had volatility over the past five years, but the Turkiye economy and the banking sector have been able to manage those periods successfully.”

    Having spent years with international institutions such as BBVA, Bastug has vast experience in the banking sector. “Turkish banks, especially private ones like DenizBank, are very successful. In terms of capital, balance sheet structure and digital transformation, we are in a strong position,” he says.

    Solid fundamentals

    Turkiye’s fundamentals remain solid with a diversified export-oriented economy, a young and skilled population of 85 million, and relatively low debt levels. “We are not a highly leveraged country. Our household debt-to-GDP ratio is low. With the right policy mix, we offer high potential for foreign investors,” says Bastug.

    That potential is increasingly being realised through growing engagement with the GCC and the UAE. “Turkiye’s connection with the Gulf is going up, and DenizBank is set to play a serious role in these relations. Day by day, Turkish companies are expanding their footprint in the region.”

    GCC projects

    Baştug says that many of these companies approach DenizBank to help facilitate their entry into Gulf markets. “Some of our clients are extremely well capitalised, but others need support for major projects. Just recently, one Turkish company announced a $3bn project in the region. We’re helping them connect with Emirates NBD and navigate the local financial landscape.”

    DenizBank is actively supporting the creation of trilateral partnerships – particularly between Turkiye, the UAE and Saudi Arabia. “We see huge opportunity in forming financial strongholds across these markets, leveraging Turkiye’s contractor experience, the UAE’s capital and Saudi Arabia’s scale,” says Baştug.

    DenizBank is already delivering results. “With Emirates NBD, we’ve identified 10 strategic cooperation areas, including trade finance, payments and capital markets. Thanks to this partnership, Emirates NBD has become the number one debt capital markets bank in Turkiye, even ahead of global players.”

    One area of growing activity is initial public offering (IPO) participation. “We’ve launched a mutual fund that allows Turkish private banking clients to participate in IPOs from the region, including from the UAE and Saudi Arabia. It’s a diversification strategy and helps retain wealth within the group.”

    Turkiye’s connection with the Gulf is going up, and DenizBank is set to play a serious role in these relations. Day by day, Turkish companies are expanding their footprint in the region
    Recep Bastug, DenizBank

    Inflation ends

    Despite the current inflationary environment, Bastug says there is a clear inflection point ahead. “We expect 2027 to be a turning point. Once we exit the inflationary accounting regime [in Turkiye], DenizBank will become one of the biggest contributors to Emirates NBD’s global balance sheet. Last year, we contributed $1.2bn. In 2027, it will be significantly more.”

    DenizBank is the fifth-largest private bank in Turkiye with about a 5% market share. “The largest private bank is at 13%. It’s not easy to close that gap – but we will do it. Our long-term goal, aligned with our shareholder, is to become the biggest and most successful private bank in the country.”

    The bank is especially focused on agriculture, SMEs, and export financing – sectors that are deeply relevant to
    Turkiye’s economic growth and to regional demand. “We are the leading agricultural bank in Turkiye, and we believe strongly in the sector’s future – both for local consumption and exports.”

    Regional opportunities

    Bastug also sees potential for engagement beyond the GCC, including in post-conflict reconstruction. “In the past, Turkiye had strong trade volumes with Syria. Even during wartime, commercial links remained. Once a stable environment emerges, there will be opportunities – especially in infrastructure.”

    While a physical branch presence is not currently being considered, DenizBank is prepared to support Turkish contractors operating in neighbouring countries. “We have the relationships and expertise to facilitate this growth. And culturally, we’re well aligned with the region – it helps make business smoother.”

    As Turkiye re-establishes economic momentum and Gulf economies look to deliver on long-term visions, DenizBank is positioning itself for a more active role in the region in the future. “We are preparing the bank for the next stage, and with the backing of Emirates NBD, we’re confident in our ability to lead.” 

    READ MORE
    > UAE-Turkiye trade gains momentum
    > Turkiye’s Kalyon goes global

    https://image.digitalinsightresearch.in/uploads/NewsArticle/14170372/main.gif
    Colin Foreman
  • Multiply agrees to sell Pal Cooling to Tabreed and CVC

    30 June 2025

    Abu Dhabi-based investment company Multiply Group has agreed to sell all of its shares in its district cooling subsidiary Pal Cooling Holding (PCH) for AED3.8bn ($1bn) to a consortium comprising Engie-backed National Central Cooling Company (Tabreed) and CVC DIF.

    The transaction is still subject to regulatory approvals.

    MEED exclusively reported in May that a team comprising Tabreed and CVC was holding exclusive discussions to acquire PCH.

    Multiply Group initially acquired a 100% stake in PCH and its subsidiaries in July 2021.

    Multiply Group has been advised by Standard Chartered and Clifford Chance. Tabreed and CVC DIF have been advised by Citi, Synergy Consulting and White & Case.

    The transaction brings together two of the UAE’s leading district cooling players. PCH was founded in 2006 and operates five active district cooling plants across the UAE. The company maintains eight long-term concessions and strategic partnerships with some of the UAE’s leading real estate developers, servicing key residential, commercial and mixed-use developments – most notably on Abu Dhabi’s Reem Island.

    Tabreed owns and operates 92 plants, including 76 in the UAE, five in Saudi Arabia, eight in Oman, one in Bahrain, one in India and one in Egypt, in addition to other international projects and operations.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/14170511/main.jpg
    Colin Foreman
  • Iraq approves Basra housing project

    30 June 2025

    Iraq has approved plans to build a housing project in Basra that will offer about 5,000 homes in the first phase to tackle the country’s rising housing shortage.

    The project, which is endorsed by Iraq’s National Investment Commission (NIC), will cover an area of about 3 square kilometres.

    According to local media reports, Basra province governor Asaad Al-Idani said the project has already been awarded to a developer.

    Iraq has been gradually recovering since the war. The government initially prioritised infrastructure and public housing to stimulate economic growth, improve living standards and attract foreign investment.

    More recently, benefitting from higher oil prices and a period of relatively stable governance, Baghdad has expanded its focus to reconstructing and modernising the country’s deteriorating infrastructure.

    The Iraqi construction market has also seen significant investments from private real estate developers from the region. In May, Egyptian real estate developer Ora Developers announced that it had started construction on the Al-Wardi residential city project, which consists of more than 100,000 residential units covering about 61 million square metres (sq m) on the southeastern side of Baghdad.

    The move is the latest sign of international investors’ growing appetite for developing real estate in Iraq as part of the country’s post-war building initiatives.

    Also in May, another Egyptian firm, Talaat Moustafa Group Holding, said it was in negotiations with the NIC to develop a mixed-use project. The project, which will cover an area of about 14 million sq m and will be located in the southwest of Baghdad, is expected to contain about 45,000 residential units.

    The positive sentiment has been particularly buoyed by a robust 2024 budget, which allocated nearly $42bn to transport, social infrastructure and housing initiatives.

    Looking ahead, Iraq’s construction industry is expected to register an annual average growth rate of 4.9% in 2025-28, supported by further investments in energy, infrastructure and housing projects, according to UK analytics firm GlobalData.

    MEED’s June 2025 report on Iraq includes:

    > COMMENT: Iraq maintains its pace, for now
    > GOVERNMENT & ECONOMY: Iraq’s economy faces brewing storm
    > OIL & GAS: Iraqi energy project value hits decade-high level
    > PIPELINES: Revival of Syrian oil export route could benefit Iraq
    > POWER: Iraq power sector turns a page
    > CONSTRUCTION: Iraq pours billions into housing and infrastructure projects
    > DATABANK: Iraq forecast dips on lower oil prices

    https://image.digitalinsightresearch.in/uploads/NewsArticle/14170011/main.png
    Yasir Iqbal
  • Meraas announces Dubai City Walk expansion

    30 June 2025

    Register for MEED’s 14-day trial access 

    Local real estate developer Meraas has announced the City Walk Crestlane project as it continues to expand its City Walk residential community in the Al-Wasl area of Dubai.

    The City Walk Crestlane comprises two residential towers offering 198 one-, two-, three-, four- and five-bedroom units.

    The project is expected to be completed and handed over by the third quarter of 2028.

    Earlier this month, Meraas, which is part of Dubai Holding Real Estate, awarded a construction contract for another project at City Walk.

    The local firm Naresco Contracting was awarded a AED450m ($123m) contract for the main construction works on its Central Park Plaza residential project at City Walk.

    The project involves constructing two towers with 23 and 20 floors. Together, they will have 212 residential units.

    In May, Meraas awarded another local firm, Al-Sahel Contracting Company, a AED300m contract for the main construction works on Elara, which is phase seven of the Madinat Jumeirah Living masterplan in Dubai.

    The project involves building three residential towers with 234 apartments.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/14169472/main.jpg
    Yasir Iqbal