(Updates with Jazeera serving new hub in third paragraph.)
Oct. 1 (Bloomberg) -- Dubai International airport, which is being expanded to handle 90 million passengers a year, could be shut in coming decades to focus traffic on a new super-hub under construction with as much as twice that capacity.
Dubai Airports won’t retain the existing base if owning two hubs hampers the take up of flights at its new Al Maktoum site, and could find “alternative purposes” for the prime real estate, Chief Executive Officer Paul Griffiths said in an interview.
The airport authority is evaluating plans to accelerate construction of Al Maktoum and make room for top client Emirates to move in before 2025, and could lift capacity to 200 million travelers a year to boost its appeal, Griffiths said. Discount carriers Jazeera Airways of Kuwait and Wizz Air Ltd. of Hungary have agreed to use the facility, which opens Oct. 27, and talks are ongoing with at least two more possible users, he said.
“What we’re trying to work out right away is whether there’ll be an impact on capacity at Dubai International if we continue to operate two airfields,” Griffiths said yesterday. “We might end up with a situation where two give you less capacity than if you concentrate all your operations on a single airport. If that turns out to be the case, clearly we won’t be operating two. But it’s not a decision that has to be rushed.”
Al Maktoum airport, named after the emirate’s former ruler Sheikh Maktoum bin Rashid Al Maktoum and located at the Dubai World Central aviation complex to the south of the main urban area, will commence passenger trials on Oct. 12 and is scheduled to open to traffic 15 days later, Griffiths said.
Saudi Arabian low-cost operator NasAir, which had been touted as an initial client, is undergoing management changes and may rethink its strategy, he said. Jazeera Air announced today that it would serve the airport twice weekly from Oct. 31
The Kuwaiti carrier and two other potential users represent different regions and operating models, with one of the unnamed parties not currently serving Dubai, Griffiths said. Letters of intent could be signed before the passenger opening, and Dubai Airports aims to lure more carriers at the World Routes forum in Las Vegas this month, at which carriers plan their timetables.
Airlines are “notoriously unadventurous” in adopting new airports, though once the first few move many more will likely follow suit and quickly take up Al Maktoum’s initial capacity of just 5 million people a year, Griffiths said.
World No. 1
From that base Dubai World Central aims to become the world’s biggest air hub once fully open, with five runways able to handle 160 million passengers and 12 million tons of freight. The Al Maktoum airport at its center has so far been restricted to cargo operations, which it has been handling since June 2010.
Dubai International, or DXB, hosts 155 carriers and expects to attract 65.4 million passengers in 2013, double the total it had when Griffiths joined from London’s Gatwick airport in 2007.
Still, the airport, home to Emirates, the world’s biggest international airline, will reach peak capacity in 2018 even after its own $7.8 billion upgrade, which includes the Concourse D project, due to open in early 2015 after completion next year, and the site’s future can’t be guaranteed, Griffiths said.
While becoming a two-hub city is “a big statement in world terms,” ranking the sheikhdom among the likes of multi-airport metropolises like Tokyo and London, according to the CEO, Dubai International is constrained by urban development on all sides.
“If we don’t use it as a major airport in 10 or 12 years’ time it will be a very valuable piece of real estate, very close to the city center, so we could use DXB for alternative purposes,” he said in the interview. “Options are on the table for consideration. But it’s not a decision we have to make now.”
The new airport, 35 kilometers (22 miles) to the south near the Jebel Ali industrial zone, needs to reach an annual capacity of 100 million passengers before Emirates -- which might then be carrying 70 million people -- can move in, according to Griffiths, who said that shifting the carrier by 2020 would be “very aggressive” and that faster work is needed even to improve on the 2025-2027 period currently targeted. Early projections put the hub’s capacity at only 80 million by 2027.
Neither are split operations an option for Emirates, according to Griffiths, with the airline’s business model based around the ease of passenger transfers between regular waves of intercontinental flights served by wide-body planes including the world’s biggest fleet of Airbus SAS A380 superjumbos.
In parallel with accelerated construction, which might entail modular terminals to allow for staged capacity growth, Dubai Airports is exploring development of the new facility beyond its maximum design capacity of 160 million people -- more than twice the number who currently use London Heathrow, the busiest aviation hub in Europe -- with a figure of 200 million passengers regarded as a possibility, Griffiths said.
“The idea is to future-proof it,” he said. “We could get to a point where we greatly exceed the largest airport in terms of overall capacity. This is Dubai. There are plenty of examples here where we set ambitious plans and actually exceed them, with the rest of the world asking ‘How on earth did they do that?’”
Dubai must ensure that it gets its airport strategy right to avoid losing connecting traffic to rival hubs in Doha, Abu Dhabi and Istanbul, where Qatar Airways Ltd., Etihad Airways PJSC and Turkish Airlines are respectively based, he said.
Al Maktoum airport’s location to the south of Dubai means it’s also “much more centrally positioned within the U.A.E.” and may take some traffic from Abu Dhabi, the CEO said.
The new airport may enjoy a temporary surge in traffic next year when the northern runway at Dubai International undergoes a resurfacing and lighting program that will cut capacity by 28 percent over an 80-day period starting in May.
Emirates and budget carrier FlyDubai will each lose more than 5,000 flights during the period and are in negotiations over a short-term switch to Dubai World Central, Griffiths said.
--Editors: Chris Jasper, Jacqueline Simmons.