Dubai will spend €24.8 billion on expanding its second airport to handle more than 200 million people annually next decade, roughly triple the current level of passenger traffic through the emirate, airport authorities said earlier this week.
The expansion could allow Dubai’s fast-growing flag-ship carrier Emirates to shift its operations to the new facility by the mid-2020s, airport officials said.
That might prompt other international airline operations in Dubai to follow suit because of business ties to the Emirates group.
Al Maktoum International Airport began accepting passengers in October last year and currently has a capacity of only about five million people per year.
It opened some four years later than originally planned after a financial crisis forced Dubai to revise some of its mega-projects.
The emirate is now reviving development plans as its real estate market recovers and its safe haven status in the turbulent Middle East attracts heavy inflows of money.
Dubai’s ruler Sheikh Mohammed bin Rashid al-Maktoum has approved plans to enlarge Al Maktoum to that it can eventually accommodate more than 200 million passengers, Dubai Airports said in a statement.
The expansion is expected to be the biggest airport project in the world, the company said. It would take place in two phases over six to eight years, with the entire development covering an area of 56 square kilometres.
The emirate’s current main airport, Dubai International, is already one of the biggest in the world. It has a capacity of 75 million passengers.
With limited options for further growth at Dubai International, we are taking that next step to securing our future by building a brand new airport
Traffic has been growing at double-digit rates and hit 66.4 million people last year.
Further expansion is planned to permit traffic of almost 100 million passengers by the end of 2020, but that is still too small to accommodate additional business that Dubai expects to attract through its role as a travel and tourism hub.
“With limited options for further growth at Dubai International, we are taking that next step to securing our future by building a brand new airport that will not only create the capacity we will need in the coming decades but also provide state of the art facilities,” said Paul Griffiths, Dubai Airports’ chief executive.
Dubai officials have not said how they will fund the project. Dubai lacks the big oil resources of its neighbours and is still working through a large debt burden, the legacy of its 2009 financial crisis, but its strong economy has allowed it to borrow cheaply from international markets in the past 18 months.
Dubai Airports estimated the broad aviation sector, including tourism and related businesses, would support more than 322,000 jobs in the emirate and contribute 28 per cent of its gross domestic product by 2020.
Big international carriers, including Emirates, have so far not indicated any plans to move to Al Maktoum, with just a handful of airlines currently operating out of the facility. Authorities have not said what will happen to Dubai International if the big airlines do leave it.
Emirates, one of the region’s largest operators and the biggest customer of the Airbus A380 superjumbo, flew 44.5 million passengers in its fiscal year to last March.