UAE aviation returns to growth

12 October 2023

More news from the UAEs 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.
Colin Foreman
Related Articles
  • Bahrain mall to install solar carport

    24 April 2024

    The Avenues-Bahrain has signed a solar power purchase agreement (PPA) with UAE-headquartered solar company Yellow Door Energy (YDE) for a 3.5MW solar carport system encompassing the mall’s entire outdoor parking facility.

    According to the shopping mall operator, YDE will build, operate and maintain the solar carport, which will comprise over 6,000 bi-facial solar panels providing shade for 1,025 parking spots while generating over 5.8 million kilowatt-hours (kWh) of clean energy in its first year.

    The Avenues-Bahrain expects construction of the solar carport to begin soon and be completed by the fourth quarter of 2024.

    The solar carport, covering an area of 23,500 square metres (sqm), will complement the mall’s four-year-old rooftop solar photovoltaic (PV) system, which has a capacity of 250KW and offsets 300 metric tonnes of carbon emissions annually.

    The Avenues-Bahrain win marks YDE’s sixth secured solar project in Bahrain, bringing its total portfolio in the country to over 30MW of awarded solar projects.
    Jennifer Aguinaldo
  • No extension for Dubai sewer tunnel prequalification

    24 April 2024


    Register for MEED's guest programme 

    Dubai Municipality expects interested engineering, procurement and construction (EPC) companies to submit their statements of qualifications (SOQs) by the end of April for the contracts to develop the Dubai Strategic Sewerage Tunnels (DSST) project.

    “No further extension has been granted,” a source close to the project tells MEED.

    International, regional and local EPC contractors are keen to prequalify to bid for the contracts for the $22bn DSST scheme, which Dubai Municipality is implementing on a public-private partnership (PPP) basis.

    In addition to its size, the project is gaining significant interest due to its unique procurement approach, whereby EPC contractors’ prequalification precedes developers’ prequalification.

    Dubai Municipality is undertaking the prequalification process for EPC contractors ahead of prequalifying companies that can bid for the contracts to develop and operate various packages of the project.

    According to industry sources, the floods resulting from last week’s storm that hit Dubai and other emirates have also made implementing the project more urgent. 

    The bidders for each of the PPP requests for proposals (RFPs) will be prequalified consortiums comprised of sponsors, EPC contractors and operation and management (O&M) contractors.

    MEED previously reported that the overall project will require a capital expenditure of roughly AED30bn ($8bn), while the whole life cost over the full concession terms of the entire project is estimated to reach AED80bn.

    The project aims to convert Dubai’s existing sewerage system from a pumped system to a gravity system by decommissioning the existing pump stations and providing “a sustainable, innovative, reliable service for future generations”.

    Dubai currently has two major sewerage catchments. The first in Deira is Warsan, where the Warsan sewage treatment plant (STP) treats the flow.

    The second catchment, called Jebel Ali, is in Bur Dubai, where the wastewater is treated at the Jebel Ali STP.

    DSST-DLT packages

    Under the current plan, the $22bn DSST project is broken down into six packages, which will be tendered separately as PPP packages with concession periods lasting between 25 and 35 years.

    The first package, J1, comprises Jebel Ali tunnels (North) and terminal pump stations (TPS). The tunnels will extend approximately 42 kilometres, and the links will extend 10km. 

    The second package, J2, covers the southern section of the Jebel Ali tunnels, which will extend 16km and have a link stretching 46km.

    W for Warsan, the third package, comprises 16km of tunnels, TPS and 46km of links.

    J3, the fourth package, comprises 129km of links. Once completed, Dubai Municipality will operate them, unlike the first three packages, which are envisaged to be operated and maintained by the winning PPP contractors.  

    J1, J2 and W will be procured under a design-build-finance-operate-maintain model with a concession period of 25-35 years.

    J3 will be procured under a design-build-finance model with a concession period of 25-35 years.

    J1, J2, W and J3 will comprise the deep sewerage tunnels, links and TPS (DLT) components of the overall project.

    MEED understands the project’s remaining two packages, the expansion and upgrade of the Jebel Ali and Warsan STPs, will be procured in a process separate from the four DSST-DLT components.

    The RFPs for the four DSST-DLT packages will likely be issued sequentially, staggered around six to 12 months apart.

    Dubai Municipality has appointed Abu Dhabi-headquartered Tribe Infrastructure Group as lead and financial adviser, UK-based Ashurst as legal adviser and the US’ Parsons as technical adviser for the DSST project.
    Jennifer Aguinaldo
  • UAE and Oman firms sign $32bn energy deal

    24 April 2024

    Register for MEED's guest programme 

    An industrial and energy project valued at an estimated AED117bn ($31.8bn) topped the recent investment agreements reached between the UAE and Oman following Sultan Haitham Bin Tariq’s visit to the UAE capital earlier this week.

    The package encompasses renewable energy initiatives, including wind and solar projects, alongside green metals production facilities.

    The agreement’s signatories included Abu Dhabi National Energy Company (Taqa), Abu Dhabi Future Energy Company (Masdar), Emirates Global Aluminium, Emirates Steel Arkan, OQ Alternative Energy and Oman Electricity Transmission Company.

    Details of the planned projects have not yet been disclosed, although the production of green steel and green aluminium in either jurisdiction is implied.

    The companies signed the agreements on 22 April in the presence of Sheikh Theyab Bin Mohamed Bin Zayed Al Nahyan, chairman of the Office of Development and Martyrs’ Families Affairs at the Presidential Court, and Sheikh Hamed Bin Zayed Al Nahyan, managing director of Abu Dhabi Investment Authority.

    Along with other technology and infrastructure-related partnerships and projects, an agreement for the UAE-Oman rail connectivity project, valued at AED11bn, was also signed.

    Photo: WAM

    MEED’s latest special report on Oman includes: 

    > COMMENT: Muscat needs to stimulate growth
    > GOVERNMENT & ECONOMY: Muscat performs tricky budget balancing act

    > BANKING: Oman banks look to projects for growth
    > OIL & GAS: Oman diversifies hydrocarbons value chain
    > POWER & WATER: Oman expands grid connectivity
    > HYDROGEN: Oman seeks early hydrogen success

    > CONSTRUCTION: Oman construction is back on track
    Jennifer Aguinaldo
  • Abu Dhabi and Oman launch $180m tech fund

    24 April 2024

    Abu Dhabi-based investment and holding company, ADQ, and Oman Investment Authority (OIA) have launched a $180m technology focused vehicle called Jasoor Fund.

    Jasoor Fund aims to bolster Oman’s digital economy as well as the wider Middle East and North Africa (Mena) region by supporting high-growth technology companies in sectors such as finance, education, health care, clean energy, food, agriculture and logistics.

    OIA is represented by Ithca Group, formerly known as Oman Information and Communication Technologies Group, in the fund.

    According to ADQ, the fund’s core focus will be on innovative technology companies established in the sultanate, in addition to technology startups in other countries in the region.

    It will undertake investments in high-growth technology companies at various stages of development that have established business models.

    Mohamed Hassan Alsuwaidi, ADQ managing director and chief executive, said the launch of Jasoor Fund “reinforces our commitment to make investments that unlock the potential of key sectors of the economy, while creating lasting value for stakeholders”.

    Jasoor Fund is part of broader framework agreement signed between both parties in 2022, when they identified investment opportunities worth over $8bn across key sectors of Oman’s economy.
    Jennifer Aguinaldo
  • Contractors win Oman-Etihad Rail packages

    23 April 2024

    Register for MEED's guest programme 

    Oman-Etihad Rail Company (OERC) has announced that it has awarded contracts for three civil works packages for the railway project linking Oman and the UAE, which is now officially called Hafeet Rail.

    The estimated AED5.5bn ($1.5bn) design-and-build contract was awarded to a consortium of Abu Dhabi-based National Projects Construction (NPC), National Infrastructure Construction Company (NICC), Tristar Engineering & Construction and Oman’s Galfar Engineering & Contracting.

    NPC is the infrastructure development arm of the Abu Dhabi-based Trojan Construction Group, which is a subsidiary of local investment firm Alpha Dhabi.

    According to sources close to the project, the clients are expected to appoint an engineering design firm for the project imminently.

    NICC is the project management consultant for the Hafeet Rail scheme.

    OERC also awarded a separate contract for the rolling stock systems and integration contracts to German firm Siemens and Egyptian contractor Hassan Allam Construction.

    Several high-ranking officials from both sides attended the agreement signing ceremony.

    They included Sheikh Hamed Bin Zayed Al Nahyan, managing director of Abu Dhabi Investment Authority; Suhail Bin Mohammed Al Mazrouei, minister of energy and infrastructure; Abdul Salam Bin Mohammed Al Murshidi, chairman of the Omani Investment Authority; Qais Bin Mohammed Al Yousef, minister of commerce, industry and investment promotion; and Ahmed Bin Hilal Al Busaidi, Oman’s ambassador to the UAE.

    In January, MEED reported that OERC had received bids for three civil works packages for the railway project linking the two countries.

    According to regional projects tracker MEED Projects, the firms submitted their bids on 4 December for packages A and B. The bid for package C was submitted on 11 December.

    OERC qualified companies that could bid for the three civil works packages for the railway project in August last year.

    Network development

    Oman-Etihad Rail Company was established in September 2022 to implement the railway network between the two countries.

    The project subsequently received a push after Oman-Etihad Rail Company inked a strategic agreement with Abu Dhabi-based Mubadala Investment Company to support its development.

    The UAE-Oman Rail Network is set to improve the two countries’ competitiveness in global trade and help establish their positions as logistics hubs that serve as gateways to regional markets.

    The scheme supports both countries’ sustainable development goals by improving their transport and infrastructure sectors.

    The line’s increased efficiency compared to other modes of transport is expected to reduce the overall cost of supply chains. The network will also provide trade and investment opportunities for the private sector and new job opportunities.

    Passenger trains will run up to 200 kilometres (km) an hour on the line, reducing the journey time between Sohar and Abu Dhabi to 100 minutes and between Sohar and Al Ain to 47 minutes.

    Freight trains will reach a top speed of 120km/hour.
    Yasir Iqbal