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Dubai gives green light to airport expansion

Sept. 8, 2014, Dubai, U.A.E. - Dubai's ruler has endorsed a $32 billion expansion plan for the city's second airport that aims to make it the world's biggest, the emirate's airport operator said Monday in the latest sign that the Middle East's brash commercial hub is determined to move on from its 2009 financial crisis.


September 8, 2014
By The Associated Press

The approval sets in motion a vast building project that will boost
capacity exponentially at the airport known as Al Maktoum International
at Dubai World Central. Backers envision it will eventually handle more
than 200 million passengers per year.

 

The first phase of the expansion alone
aims to build enough runway and terminal space to handle 120 million
passengers a year and 100 mammoth Airbus A380 double-decker jets at any
given time.

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The world's busiest airport, Hartsfield-Jackson Atlanta International Airport, handled 94.4 million people last year.

 

Paul Griffiths, chief executive of
state-backed airport operator Dubai Airports, said he aims to have the
first phase of the expansion complete in six to eight years. That part
of the project includes adding two new runways and two large concourses
housing dozens of aircraft gates each.

 

"It's a very aggressive
time scale … but I think that we have a track record here of doing
remarkable things in a remarkably challenging time frame," Griffiths
said in his office at the city's main airport, Dubai International.

 

As later phases are completed, the new
airport will eventually boast five parallel runways spaced far enough
apart so they can all be used at the same time, and have enough gates
for hundreds of wide-body planes.

 

Dubai World Central opened for cargo
flights in 2010 with a single runway in the desert south of central
Dubai. It received its first passengers in October at a single terminal
that is mainly used by smaller airlines and low-cost carriers.

 

The currently larger Dubai International
ranked as the world's seventh busiest airport last year, handling 66.4
million passengers. It too is being expanded, with a new concourse
expected to open next year.

 

Griffiths says Dubai needs to expand to
keep pace with the rapid growth of airline traffic into the emirate.
Much of the increase comes from hometown airline Emirates, the region's
largest carrier and the world's biggest user of both the A380 and Boeing
777 long-haul jets.

 

Emirates is expected to
move its hub to the new airport shortly after the first expansion phase
is complete, freeing up space in the older airport for the well over 100
other airlines that already operate from it.

 

Griffiths is confident Dubai will be able
to generate the funding needed to complete the project given the
importance of aviation to Dubai's economy. Officials say the industry
contributes $22 billion annually to the local economy and supports some
250,000 jobs.

 

"The aviation sector has demonstrated
that there is a very compelling economic case to suggest creation of
further capacity is a very sensible thing to do," Griffiths said. "I'm
sure that the government will come up with the appropriate funding to
make the project a reality."

 

Dubai is still recovering from the
effects of its financial crisis, which sent property prices plunging and
forced it to accept a multibillion-dollar bailout from neighbouring Abu
Dhabi.

 

The local economy has bounced back
strongly since, though Dubai and its state-linked companies still carry
tens of billions of dollars in debt. The International Monetary Fund has
warned of the possibility of another property bubble forming, and
analysts question how Dubai can make good on the debt it still owes.

 

"There are still plenty of
reasons to think that the emirate's debt problems are far from over,"
Jason Tuvey, an analyst at London-based Capital Economics, wrote in a
research note last week.

That has not stopped officials from announcing plans for headline-grabbing projects reminiscent of the pre-crisis boom.

 

On Sunday, a property development company
controlled by Dubai ruler Sheik Mohammed bin Rashid Al Maktoum laid out
plans for a $2.7 billion theme park and resort complex near the new
airport and the site of the World Expo that Dubai is due to host in
2020.

 

The expansion of the new airport is unlikely to be ready by the time the Expo kicks off, Griffiths said.