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Expo 2020 will spur unprecedented airport investments boom in UAE
Infrastructure projects worth $43 billion needed in preparation for Expo 2020
January 20, 2014 3:14 by Maha El Gazzar
Investments in expanding airports in the Arabian Gulf’s aviation heartland is due for a big push with the selection of Dubai as the host city for Expo 2020 – the third biggest event after the Olympics and FIFA World Cup – thereby offering vast growth opportunities for the global aviation industry as the city state accelerates its drive to enhance the airports capacity and facilities.
A significant portion of government investments planned for infrastructure development in the emirate will be for the aviation industry, with the airports sector being the top priority. The global industry will benefit immensely by opening the floodgates of new investments in the run up to the event, which will attract 25 million tourists to the region.
His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, says: “We have a lot to accomplish and we have no excuse for any delays or poor performance. We have what it takes to achieve as we are blessed with rich resources, capabilities, expertise, positive energy, a thirst for knowledge, dedication and above all, the leadership’s unlimited support.”
Dubai is expected to invest more than $8.1 billion in new infrastructure to host Expo 2020. HSBC estimates that total spending related to the Expo, including private sector projects, could reach $18.3bn and Deutsche Bank estimates as much as $43bn in infrastructure projects would need to be developed in preparation for the event. Aviation has established itself as a vital contributor to the UAE’s economy, contributing more than AED145bn or 14.7 per cent to the national GDP.
His Highness says: “The required costs would not be problematic as it makes sense and has a business case. The World Expo in Dubai would present opportunities and leave a lasting legacy, not only for Dubai and the UAE, but for the economy and the wider region.”
“This contribution is projected to grow further in the coming years and as such justifies the country’s huge investment in airports and airline networks. Aviation and logistics have had a major impact on other economic sectors, such as tourism, hospitality, trade and finance, and activity in one spurs growth in the others,” he adds.
Taking place from May 11 to 13 at the Dubai International Convention and Exhibition Centre (DICEC) under His Highness Sheikh Ahmed’s patronage, the Airport Show 2014 emerges as the first gateway for global airports industry players to showcase their portfolio of latest and innovative products, services and solutions and also get business-driven networking with the regional decision makers and key players.
Daniyal Qureshi, event director of The Airport Show, says: “The show offers aviation companies and regional airport authorities a win-win formula. The show had its origin as the first platform for the global aviation industry to benefit from Dubai airport when it went in for massive expansion and development in the late ’90s. It is going to the best B2B event for the industry to tap the boundless business opportunities over the next seven years leading up to Expo 2020. From a readiness point of view, the year 2020 is just around the corner.”
In the past 13 years of its successful running, the show has emerged as the second largest key B2B event for the airport industry with more than 250 companies from around the world participating in the 2013 edition. Significant deals emerged following the discussions that took place during the show, whose prominent feature is the hosted buyers programme that brings the key decision makers of regional airports directly in contact with the leading global suppliers and manufacturers.
The Airport Show organisers, Reed Exhibitions Middle East, expect a substantial rise in the number of exhibitors participating in the 2014 edition, despite the fact that more than half of the 2013 edition’s exhibitors had already confirmed their attendance in the next year’s show.
“Expo 2020 is going to be best thing happening to the UAE’s aviation industry and the Airport Show is the next big opportunity to tap into the business potential that lies ahead. One will find all the key players of the regional airports management in general and Dubai in particular attending the show and looking for their procurements. The variety of exhibitors that the show attracts is amazing – one gets all the requirements of a complete airport under one-roof itself,” he added.
Dubai hopes to reap long-term benefits from the expo by leveraging the event as a catalyst for aviation growth. The fact that the emirate has to ready itself in a reasonably short time frame of seven years should provide considerable impetus to the possibilities of fresh deals and new business leads for the aviation industry players.
True to the Expo 2020 theme, ‘Connecting Minds, Creating the Future’, the aviation industry will get the opportunity to link up with the region with new partnerships, thereby ensuring a bright future.
The first thing that falls in the development mosaic is the airports. The Al Maktoum International Airport at Dubai World Central (DWC), Dubai’s second airport, originally planned to accommodate 160 million passengers, will see its development speeded up dramatically.
Dubai Airports has been “preparing” proposals to double the emirate’s passenger handling capacity to 200 million passengers a year by 2045, up from the current target of 100 million a year by 2020.
The Strategic Plan 2020 published by Dubai Airports forecast Dubai International Airport would hit capacity in 2018 at approximately 90 million passengers. A fourth concourse is under construction, after the opening of the Airbus A380-dedicated Concourse A brought the capacity of the world’s second busiest international airport to up to 75 million.
Dubai Airports is undergoing an AED28.8bn expansion programme, which will boost capacity at Dubai International from 60 million to 90 million passengers per year by 2018. Dubai intends to invest $33bn in the multi-phased development at DWC, which is located in the vicinity of Expo 2020 venue, and experts believe that the budget allocations are expected to rise with Expo 2020 win.