21.11.15

Guest Post - Sustenance of this aviation growth in the Middle East

This post was written for Stick and Rudder Blog

There is a a certain "je ne sais quoi" about Middle Eastern Aviation, Who is the largest operator of the behemoth Double-Decker that is the A380? Emirates. How about the B777? also Emirates. Then what about the B787-9? Etihad will be that guy in a few years. The A350? That honor goes to none other than Qatar Airways. So what does that mean to the region?

That is an audacious ambition, which is new to everybody across the aviation value chain, growth in aviation is usually much more gradual and organic, there is no model to copy from on how to double, triple or quadruple an airline in 10 years, nor is there such a guide for coping with such growth.

Airports

Abu Dhabi home to Etihad with a design capacity of 40 Million Pax (passengers), Dubai home to Emirates is already at 75 million capacity and Doha home to Qatar is planning to accommodate 50 million Pax, and Dubai are already building and operating DWC airport with initially 5 million pax and a long term target of 80-120 million Pax per year. All those airports are all within 200 Nautical Miles of each other.
This is similar to having LAX (Los Angeles), ORD (Chicago O'Hare) and JFK (New York) all fitted in the area between New York and Washington!

All three big hubs in Abu Dhabi, Dubai and Doha, are fairly busy. Dubai being an extreme example of operating near capacity on its two runways. However, keep that in mind, all three airports have only two runways each. Think about that for a second, out of the top 5 airports in the world, only Heathrow and Dubai have two runways each.

Hartsfield-Jackson has 5, Haneda has 4, Beijing has 3. Dubai manged to outgrow Heathrow because of the amount of A380s it has coming in and out and the longer operating hours. Even in the top 10, Paris has 4, the Americans (Dallas and Chicago) have 8 and 9 while Los Angeles has 4, but that is just a different model of airports, you will need to go to the bottom of the top 10 to find airports like Hong Kong or Bangkok where two runways can be used efficiently to move that many airplanes.

The airports are all fairly recent, Doha's new airport having just opened up last year, and Dubai latest concourse is being built, Abu Dhabi's new terminal is still delayed but should open up in 2017-2018 and DWC is still a big question mark, but we are already hearing the airlines complaining that these will be capacity constrained and that satellites will be needed to meet that demand.


Airspace

The three airports will always need top class equipment, Air Traffic COntrollers (ATCOs) and infrastructure that is cutting edge to meet all that forecast demand. ATCOs are already an issue, some parts of the operation is being outsourced to folks like NATS, and their salaries are making it harder to retain them in adjacent countries, which is causing a rise in salaries; this is eventually causing a rise in the charges that these and other airlines pay.
The immediate surrounding region is presently facing pressure to cope with the number and size of aircraft that is moving in and out, Iran and Saudi are being pushed to redesign and work with the airlines to move away from the old designs that were implemented to meet traffic moving between Asia and Europe.

Infrastructure

The nominal infrastructure comprised of Airports, Runways, Navaids, etc... is there because it can be bought; the more important aspects are the process. Weather forecasts in the region are notoriously inaccurate, the disruption management processes are big playbooks, however, when push comes to shove, havoc rules. Processes are the biggest enablers in aviation, and each stakeholders in the value chain has hordes of manuals and checklists that will satisfy any audit or check, but adds no value when you really need it.

This region is obsessed with bigger, better, larger, longer, that it forgets that sometimes just sustaining the status quo is actually a pretty tedious task, doing it with a decent ROI is actually a great feat, that is not what we see in this part of the world. Growth is being done for the sake of growth and for the sake of diversifying investments.

Meanwhile, it is going to be a fun ten years if we remain in the aviation sector in the region.
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