As airports in the Middle East expand, they are facing new competition: each other.
The region’s hubs in Dubai, Abu Dhabi, Turkey and Saudi Arabia are on an expansion drive that will see them add hundreds of millions of passengers in the coming decade — the equivalent of at least three Heathrows.
Dubai, which was once the same size as London’s Gatwick serving around 30mn people a year, plans to increase annual capacity to more than 200mn. Istanbul is also targeting a similar level of passengers, while Saudi Arabia has ambitions to develop its own regional mega-hub through its new airline, Riyadh Air.
In the past, the region’s airports eyed Europe’s leading hubs such as Heathrow, Frankfurt and Schiphol as competitors. But as they have grown, executives say they will need to win business from each other.
Dubai — the Gulf’s original hub airport — believes its heft will help it fight off the competition.
“We will be the black-hole mega hub that sucks in demand all over the region,” predicts Paul Griffiths, chief executive of Dubai Airports.
Already the largest in the world, it expects to pass 100mn visitors a year by 2027 — but is working on a new site that can accommodate 260mn passengers annually. Even this will be full by 2050, he expects, based on its passenger forecasts.
In contrast, Dubai’s UAE rival Abu Dhabi can accommodate 45mn passengers a year. Its main airline, Etihad, was expected by financiers to begin proceedings to list this year, though it has yet to do so.
“We have one-third of the world’s population within four hours [flying time], and two-thirds within eight hours, that’s one hell of a catchment area,” Griffiths said.
Part of the Gulf’s growth has been fuelled by the region’s airlines offering plush cabins, such as private suites, and services such as on-demand dining. Qatar Airways, for example, serves caviar in business class, and the carriers’ drive for ever more competitive luxury has led to rising prices.
The Middle East hubs have had the geographical advantage as the world became more connected.
“One of the reasons why Dubai, Qatar and Istanbul have been in the front of the line is because of their location advantage,” said Selahattin Bilgen, chief executive of Istanbul airport.
“Thirty or forty years ago most of the aviation movements were between North America and Europe. But now it’s not the case. Istanbul being located in the middle of Africa, Asia and Europe gives a huge advantage.”
European airlines have also been prevented from flying over Russia after its 2022 invasion of Ukraine — adding hours to flights to Japan, India and China and ceding the time advantage that Europe traditionally had over Emirati rivals.
However, the West’s legacy carriers remain confident they can still offer customers advantages.
“People don’t want to go over to Dubai for every single connection,” said Sean Doyle, chief executive of British Airways, who points to the carrier’s extensive network.
“If we have a competitive product and we’re flying directly to more places from London than anybody else, I’m pretty confident that people will vote with their feet,” he said.
Nevertheless, backed by governments with tourism and aviation part of their growth strategy, the Middle Eastern hubs are bullish despite the regional tensions that can disrupt travel.
Riyadh Air, wholly owned by Saudi’s Public Investment Fund, has an explicit goal from Crown Prince Mohammed bin Salman to put the Kingdom on the world’s travel map as part of wider efforts to diversify its economy away from oil.
The carrier, which launched its inaugural London to Riyadh flight last month for PIF staff, will take public bookings from Christmas and aims to connect 100 destinations within five years. It has ordered 182 aircraft as part of a “multiple tens of billions” bet on rising tourism and connectivity.
Riyadh is currently poorly connected — with anyone wanting to visit from locations such as Tokyo, Shanghai or the US forced to transfer elsewhere.
“That’s simply unacceptable,” said Tony Douglas, Riyadh Air’s boss, adding that “we have a mandate to resolve that”. His ambition is to become, over time, more of a “global connector”. “If you’re a resident of Riyadh in Saudi, and want to get to other cities, you shouldn’t have to go to Doha or Dubai or somewhere else to connect.”
Although not located in the Gulf, Istanbul’s airport rivals those further south as a centre for connecting flights — as well as Istanbul being a tourist destination in its own right.
It opened a brand new airport in 2018 that can process 90mn people annually, replacing a landlocked predecessor Atatürk Airport, which was closed the following year.
Three further expansion phases, taking it to six runways, could eventually see Istanbul expand to cater for 200mn people annually, a size rivalling an expanded Dubai.
The rivalry between the airports has led to competition for staff, with the hubs poaching executives and IT professionals from each other.
Istanbul airport’s chief planning officer and head of IT have recently both been hired by Dubai to help with its new expansion. Bilgen said the hub was aiming to be prepared for the loss of experts. “We are running some projects to keep our talent, second to grow new talent to replace the ones who were lost,” he said.
Growth has brought a spiral effect to the Middle East hubs, he added, as “the more connected you are, the more attractive you are [to airlines], and the more airlines come to you, the more connectivity you have,” he added.
In the long term, increasing the number of tourists travelling to the Gulf — rather than relying on passengers connecting to flights to other regions such as Asia — is key to safeguarding growth for airports, executives say.
“I don’t think many people will make that trip [to the Middle East] at the moment if there’s only one city to visit,” said Dubai’s Griffiths.
Dubai itself may have had 19mn visitors last year, up 9 per cent from a year before, but “if you add all of the sites in Saudi, if you add Jordan, Oman and you popularise all those tourist destinations, you will exponentially grow the market for tourism. And I think that’s what is likely to happen,” he said.
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