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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. 

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Colin Foreman

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    7 August 2026

     

    Kuwait was one of the chief targets of Iranian drone and missile strikes during July, but against the backdrop of regional instability, the Kuwaiti authorities also managed to conclude a series of significant deals during the month. That suggests that, if the US and Iran can come to some sort of agreement to end their conflict, there is the potential for the Kuwaiti economy to diversify and expand in a way that it has, until now, struggled to do.

    The sense of nascent progress was bolstered in early August, when a survey of local businesses found that the non-oil sector had returned to growth at the start of the third quarter, having been in a slump since the start of the war. However, the risk of renewed fighting means most observers remain deeply cautious about whether the latest purchasing managers index (PMI) is just a blip, or the start of a longer trend.

    Debt deals

    The first big deal came on 22 July, when the government sold $6bn-worth of bonds. It was the second debt issuance by the authorities since a long-awaited public debt law was passed by decree last year. The latest package included debt with tenors of three, five and 10 years. In a sign of the turbulent geopolitical environment, the bonds were priced at 70-85 basis points over US Treasuries. Notably higher than the 40-50 basis point spread the government achieved in its bond sale late last year.

    The second significant development came just a few days later, with Kuwait Oil Company (KOC) unveiling a $16bn deal with international investors Blackstone, Brookfield and KKR for its crude oil pipeline network. In a similar structure to deals struck in the past by Abu Dhabi National Oil Company (Adnoc) and Saudi Aramco, KOC will lease the country’s domestic and export pipelines to a new joint venture it has set up with the trio of international partners. The Kuwaiti energy company will then lease back the pipelines on an exclusive basis, in return for a volume-based tariff.

    KOC will have a 51% stake in the joint venture and – in line with Kuwaiti law – will retain full ownership and operational control of the 320-kilometre network.

    It was the largest energy infrastructure deal ever agreed in Kuwait and, according to KOC, the largest foreign direct investment made in the country. The $7.85bn that the three international partners will invest upfront will be used to support KOC parent company Kuwait Petroleum Corporation’s wider capital expenditure plans.

    The fact that the country was able to secure the deal at a time when its only existing export route – through the Strait of Hormuz – has been effectively closed off is an important vote of confidence by investors in the country’s longer-term prospects. According to energy consultancy Wood Mackenzie, Kuwait’s crude export volumes had fallen from 1.2 million barrels a day before the year to zero in April.

    It was the largest energy infrastructure deal ever agreed in Kuwait and, according to KOC, the largest foreign direct investment made in the country

    UK-based Oxford Economics noted that the bond issue and the pipeline deal came at a time when Kuwait “faces elevated fiscal funding needs and remains one of the GCC’s most exposed oil exporters to any disruption in the Strait of Hormuz given its limited alternative export infrastructure”.

    Blackstone said it also plans to open an office in Kuwait this year. There was a further show of investor interest in early August, when the Kuwait Investment Authority (KIA) reportedly agreed a $4.25bn, three-year loan from a group of 14 banks. The facility will be used for general corporate purposes, according to Bloomberg.

    In a further notable development, Kuwait’s Ministry of Public Works also handed a contract in late July to China State Construction Engineering Corporation (CSCEC) to build the country’s largest wastewater treatment plant. The North Kabd plant will have a capacity of up to 1 million cubic metres a day (cm/d). Kuwaiti water desalination plants have been hit on several occasions by Iranian drones during this year’s war, causing fires and other damage.

    Policy reforms

    On a smaller level, some notable reforms have been rolled out to try to shape the direction of the non-oil economy too. In late July, the Ministry of Commerce & Industry stopped issuing any more sole-trader or freelance business licences, while a review is carried out into the sector and official oversight is tightened.

    The authorities went a step further on 2 August, when a decree was issued to stop businesses offering goods and services without the right sort of licence. Anyone found to be working without the required permit could now face a prison term of up to three years and a fine of up to KD100,000 ($323,000) – or a sum equivalent to the profits generated by the unlicensed activity, whichever is greater.

    Some steps have been taken to ease restrictions in other areas. In early August, a change to the visa system was announced that will allow some foreign nationals to convert a visit visa into a regular residency permit in return for a fee of KD150. The measure proved immediately popular, but many applicants had failed to read the small print and, according to local media reports, several hundred were rejected. The scheme is primarily aimed at those seeking to bring their wives or children to Kuwait, as well as humanitarian cases and others with exceptional circumstances.

    Economic recovery

    The wider economy is showing tentative signs of improvement. The latest PMI survey delivered an unexpectedly strong result, showing that the non-oil private sector returned to growth in July for the first time since the war began.

    S&P Global Market Intelligence, which compiles the index, said the resumption of flights at Kuwait International airport had helped to support a rise in output and new orders – the first for five months. That in turn supported greater purchasing and hiring activity by local businesses and took the index up to 50.8 points – just above the 50-point threshold that separates growth from contraction.

    Even so, S&P warned that market conditions remain “challenging” while local bank NBK Capital warned in early August that “it remains to be seen how much of this improvement [in the PMI] will be sustained … following the reescalation in US-Iran tensions in the past weeks”.

    If the Kuwaiti economy is to make the most of its potential, the country needs the war between Iran and the US to come to a definitive end.

    MEED’s September 2026 report on Kuwait also includes:

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    > OIL & GAS: Regional war to have lasting impact on Kuwaiti oil sector
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  • Contractors submit bids for Adnoc Onshore field facilities project

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    Contractors have submitted technical bids to Abu Dhabi National Oil Company’s onshore business (Adnoc Onshore) for a key project to build on-plot and off-plot facilities at the Rumaitha and Shanayel fields, part of the Northeast Bab cluster of oil fields in Abu Dhabi.

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    Adnoc Onshore issued the main tender for the engineering, procurement and construction (EPC) works package for the Rumaitha and Shanayel on-plot and off-plot facilities project on 19 June, MEED previously reported.

    Prior to that, Adnoc Onshore issued an expression of interest for the Rumaitha and Shanayel on-plot and off-plot facilities project in early December, with contractors submitting their responses later that month, MEED previously reported.

    The prequalification and ongoing tendering process is understood to result from Adnoc Onshore revising its strategy for executing EPC works on an earlier, larger project covering the Northeast Bab cluster, which comprises the Al-Nouf, Rumaitha and Shanayel fields.

    MEED reported in December that Adnoc Onshore cancelled an engineering, procurement and construction management (EPCm) phase it launched in 2024 for the Northeast Bab on-plot and off-plot facilities project, in favour of executing the scheme under a conventional EPC model.

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    Separately, Adnoc Onshore received bids during the second quarter of 2025 for the EPCm tender covering the Northeast Bab on-plot facilities package, but that procurement process was also later cancelled.

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    • Produced water treatment (PWT): New produced water treatment package to enable 100% produced water reinjection (PWRI), including chemical dosing, tanks, pumps, all associated controls and blending with aquifer water, etc.
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    • New gas-lifted oil producers and water injectors installation with necessary piping, controls, etc. and their connections to the new or existing clusters and pipeline networks
    • New clusters with facilities such as control panels, ITR, production and test manifolds, headers, chemical injection skids, multiphase flow meters, closed drain systems, HIPPS valves, WHCPs, pig traps, ICSS/telecom extensions, etc.
    • Modifications in existing clusters, including the addition or extension of manifolds, headers, additional pipelines with pig traps, ICSS/telecom extensions, chemical injection kids, etc.
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    • Export gas pipelines and Adnoc Gas interface: Provision for export gas pipeline and facilities from Rumaitha central processing plant to new manifold station and from NMS to Adnoc Gas, including isolation/blowdown, etc.
    • Overhead line: Installation and extension of 33kV overhead lines to clusters, etc., as required.

    The tendering exercise for the Rumaitha and Shanayel on-plot and off-plot facilities project is taking place as Adnoc Onshore continues to make progress with EPC works on another, similar project to build off-plot facilities at the Southeast cluster of oil fields in Abu Dhabi, which is also integral to Adnoc Group’s AiP5 campaign.

    The Southeast cluster comprises the Asab, Mender, Qusahwira, Sahil and Shah fields and accounts for approximately a third of Adnoc Onshore’s oil production capacity.

    MEED previously reported that Adnoc Onshore had awarded EPC works on the Southeast off-plot facilities project to state-owned China Petroleum Engineering & Construction Corporation (CPECC), with the value of the contract estimated to be around $1.2bn.

    The overall scope of work on the Southeast off-plot facilities project includes tying in more than 150 wells across the area’s fields, upgrading remote and central degassing stations, laying more than 270 kilometres of flowlines, digitising wells for remote monitoring, and implementing artificial intelligence-driven telemetry technologies.

    MEED also recently reported that CPECC awarded subcontracts on the Southeast off-plot facilities project, in its capacity as the main EPC contractor.

    The off-plot facilities project is a component of the overall $2bn-$3bn Southeast AIP5 development, with the on-plot facilities project forming the other part of the programme.

    CPECC is also performing EPC works on the Southeast on-plot facilities project in a consortium with Greece-headquartered Archirodon. Adnoc Onshore awarded an estimated $1.5bn contract for that project to the consortium in December 2024, with EPC works scheduled for completion in 2027.

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    The destination is located within the Abha International airport cluster and connects the airport with the region’s cultural, tourism and entertainment sites. Entertainment experiences at the complex include Formula E Karting alongside Seven-developed concepts such as Kawaken, GolFi, Cyber Bowling and Scene Cinema.

    Consultants on the project include Dar Engineering and Lebanon’s Khatib & Alami, with the UK’s Mace International as project management consultant, according to regional projects tracker MEED Projects.

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    Saudi Arabia builds for the global stage; Rising uncertainty creates fresh set of challenges in the Maghreb; Gulf banks remain robust in the face of geopolitical tensions.

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    Oman’s Ministry of Agricultural, Fisheries Wealth & Water Resources has received bids from nine contractors for the construction of the Wadi Rijma flood protection dam in Liwa, North Batinah Governorate.

    The Wadi Rijma dam project is one of four flood protection dams being planned in the sultanate to intercept floodwaters flowing from the northern Omani mountain range into the coastal plain.

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    In June 2025, MEED reported that the Islamic Development Bank (ISDB) had extended a $632m loan to the ministry to fund the construction of four major flood protection dams in the sultanate.

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    In June, the ministry invited contractors to bid for the construction of the Wadi Al-Khoudh flood protection dam in Wilayat Al-Seeb, Muscat Governorate.

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