OBG talks to Paul Griffiths, CEO, Dubai Airports

Interview: Paul Griffiths

How do you respond to those that have questioned the size and scale of investment being made at Dubai International?

PAUL GRIFFITHS: If we were comparing the investment relative to the local economy, there would be some cause for concern. However, one must consider our target market, because that puts things in a very different context. We are not simply focused on the local market, but on the global market. What we are doing is using Dubai as an attractive destination for tourism and commerce, as well as a global long-haul aviation hub, the likes of which has never been seen before. While the scale of investment against the local market may seem very aggressive, actually, and within the context of the global market, it is relatively modest. Furthermore, the level of investment is very well underpinned by our track record of an average annual growth rate of 15.5%.

Our development programme is also supported by the commitment of our two home-base carriers. Both Emirates and flydubai have undertaken significant fleet expansions predicated on their ability to capturing small elements of market share from a significant number of destinations, which is a very different model from the classic point-to-point model used at most other airports. Because the contribution to support our expansion comes from all four corners of the globe, the risk is well spread. In that context we are confident that our investment is at a level which the numbers can very well support.

What are your concerns in terms of infrastructure being able to keep pace with the expected growth in passenger traffic?

GRIFFITHS: The increase is actually something that we can fairly well predict based on our track record and experience. That is why we are confident when we say that we expect to welcome 90m passengers through our airport by 2018. What concerns me is the building programme that will be required to accommodate that type of volume. It will necessitate an infrastructure expansion programme which is both aggressive and ambitious. However, at Dubai International we are fairly limited in terms of the availability of land, and, while it is not insurmountable, it is an issue that must be addressed.

My other concern is that we do not fail to recognise that growth, size and scale are not always synonymous with quality. The global hub we are building here is not without competition. Other airports are being developed in the region with an eye on the same worldwide market. Those that focus purely on increasing their size without ensuring that their quality of service is not compromised will lose out on market share. Keeping those two factors, size and service, in sync will be crucial for success.

What role do you envision Dubai World Central (DWC) playing in the emirate’s aviation industry over the medium term?

GRIFFITHS: We own and operate both Dubai International and DWC, so we have a responsibility to ensure that we continue to develop Dubai as a two-airport system. DWC is beginning to take shape as the centre for cargo and logistics.

Due to its proximity to Jebel Ali Port both cargo growth and trans-shipment volumes between sea and air have increased significantly. Its growth outlook is very healthy going forward. However, it will be quite some time before DWC finally takes over as the main hub for passenger traffic.

It will require at least an 80m passenger capacity facility before we even consider moving the Emirates operations to DWC. It is the hub that attracts people here and once we move the hub, everyone will want to be there. So, it will take some time before we are able to develop and finance a project of that scale. DWC will be the aviation story of the 2020s, but for the medium term the centre will focus on growing its general aviation and cargo business.