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Is the Middle East the new hub of global aviation?

From Leone Lakhani, CNN
May 30, 2014 -- Updated 0248 GMT (1048 HKT)
STORY HIGHLIGHTS
  • Qatar's sparkling new airport is one of a series of ambitious aviation projects in the Gulf
  • Countries in region looking to diversify economies to take advantage of location between east and west
  • Middle East carriers growing faster than airlines in other regions, says IATA

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Doha, Qatar (CNN) -- After a decade of construction and almost four years behind schedule, the Middle East's latest airport destination began full operations earlier this week.

Hamad International Airport in Doha, Qatar, will eventually occupy 29 square kilometers (roughly a third of the size of Doha city itself) and comes in at a total cost of $15 billion.

The giant facility will have an annual capacity of 50 million passengers as well as public spaces for art exhibitions, a VIP terminal inspired by Arabian sailboats and an aquatic themed mosque.

Like an increasing number of oil and gas rich cities in the region, Doha is attempting to diversify its economy to make the most of new trade and tourism opportunities.

Qatar Airways' big move

For the head of Qatar's ambitious national carrier, the much-awaited development couldn't have come soon enough.

"It gives us unlimited opportunities," Qatar Airways CEO, Akbar al Baker told CNN.

Russian oil giant looks east

"Doha International Airport was very congested. It was overcrowded. We could not give the standard of service we would prefer our passengers to have on the ground."

The planned $6.8 billion Abu Dhabi Midfield Terminal -- slated for completion in 2017 -- will be able to accommodate 40 million passengers each year. The planned $6.8 billion Abu Dhabi Midfield Terminal -- slated for completion in 2017 -- will be able to accommodate 40 million passengers each year.
The Middle East's airspace race
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The Middle East\'s airspace race The Middle East's airspace race

Analysts say Doha, like its Gulf neighbors, understands the power and potential of aviation to provide a stable long-term industry in the region.

"There's a recognition by the (Qatari) government that aviation plays a wider economic role which doesn't only directly support jobs," said John Strickland, director of aviation analytics firm JLS Consulting.

"It (also) supports trade, it supports stability to develop tourism and we've seen that that's been done very effectively for example in Dubai," Strickland added.

Dubai opened the doors of its second airport, the mammoth Dubai World Central, just last year.

There are already plans to increase annual capacity there from the 120 million agreed upon during the initial design phase to over 200 million.

"Ultimately we want to create the world's largest airport," said Paul Griffiths, CEO of Dubai Airports.

"The current largest airport in the world in Atlanta, Georgia, is about 89 million passengers so you can see the kind of scale and order we are looking at," Griffiths added.

In Abu Dhabi, meanwhile, construction is underway for the new Midfield Terminal Complex at Abu Dhabi International Airport. Set to open in 2017, it will have a capacity of 30 million passengers per year alone.

Such massive developments ensure competition in the region is stiff. But with so much capacity will there be enough tourism and trade to go around?

That remains to be seen, but regional airlines seem convinced and are operating to ambitious expansion schedules themselves.

"Step by step we're opening up the U.S. but we're also going to balance that with more cities in Southeast Asia (and) in the Middle East," said James Hogan CEO of Abu Dhabi carrier, Etihad.

According to the International Air Transport Association, Etihad and the other Middle Eastern carriers are currently gaining more passengers than any other region.

In the first quarter of this year Dubai International Airport (a separate facility to Dubai World Central) became the busiest in the world with more than 18 million passengers, overtaking 16 million at London's Heathrow.

On top of this, many analysts believe the Gulf hubs -- situated just 8 hours flying time from two-thirds of the world's population -- are well placed to tap into many new and emerging markets in Asia and Africa.

"I don't think the big hub airports in the Gulf are particularly competing with each other, they are more competing with other parts of the world," said John Strickland.

"The Gulf is positioned between growing markets in Asia, Africa and Latin America and the airlines who operate out of these hub airports have very long range modern aircraft.

"Many other airlines in other parts of the world are simply not equipped .... so, these airports should be able to grow side by side," Strickland added.

If that's the case, all that's left is for the Gulf carriers to grab a piece of the lucrative aviation pie in the skies.

See also: Answering Egypt's economic riddle

See also: Gulf looks to rival Paris as fashion capital

See also: Meet the Middle East's king of hotels

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