Abu Dhabi means business

In March, the global aviation community converged on the United Arab Emirates for the Abu Dhabi Air Expo 2016. It’s a week-long event that includes several exhibitions, conferences and seminars across all aspects of aviation and aerospace, from general, through commercial, to military and private sectors.
Visitors attending such events are among the 23 million passing through Abu Dhabi International Airport (AUH) every year. In 2015 the airport experienced a 17.2% increase in passenger traffic compared to 2014, with the first quarter alone showing 21.1% growth, according to data from operator Abu Dhabi Airports.
“We continue to witness double digit traffic growth at AUH. To cross the two million mark for the first time in our history, for four months of the year, is a testament to the airport’s ability to connect the world,” commented Abu Dhabi Airports COO, Ahmad Al Haddabi, when announcing last year’s numbers.
Fresh from celebrating its 10th anniversary, Abu Dhabi Airports disclosed that billions (AED) have been spent on capital development projects during the past decade across all of its airport sites. The biggest infrastructure project undertaken so far, the midfield terminal complex, will increase capacity at AUH to 45 million passengers per year.
In February this year, passenger numbers jumped 8.7% in comparison to the same period in 2015 to reach more than 1.8 million for the month. “Traffic between India, the UK, Thailand, Australia, the USA and a number of others, all witnessed increased passenger figures from AUH,” Al Haddabi reported.
John Grant, senior analyst at air travel intelligence company OAG, said there were not many major airports in the world that have recorded 50% growth in the number of scheduled services over the last five years, but AUH was one of those few. In percentage terms, it has outpaced its closest rival, Dubai International.
“However, such high levels of growth are only one part of an intriguing picture in the region between the three prominent hubs of Abu Dhabi, Dubai and Hamad in Doha,” said Grant.
OAG data shows scheduled capacity growth of some 6.5 million seats over the last five years from Abu Dhabi and more than 25,000 additional scheduled flights a year over the same time period. Grant felt that, without a doubt, the performance at the airport had been exceptional by almost any measurable standard.
Except, of course, for the presence of two very near competing hubs that have grown their respective scheduled capacity in Dubai by a staggering 17.7 million seats (OAG) and in Doha by an equally impressive 10.5 million. “In such context, both the success and challenge facing the future growth of Abu Dhabi is daunting,” Grant indicated.
During the first quarter of 2015, Abu Dhabi Airports opened expanded facilities in Terminal 1 at AUH as part of a broader capacity enhancement programme to meet passenger needs.
A large proportion of the increase in traffic is attributed to the strong performance at Etihad Airways. The national airline carried 17.4 million passengers in 2015, 18.4% more than it did in 2014. The expansion of its network, through Alitalia and Jet Airways, inevitably contributed to passenger figures to Italy, India and the USA.
The airline has also announced expansion of its services to Istanbul during 2016, with a new four-times-weekly service to Sabiha Gokcen airport starting in July.
Etihad already operates a daily service to Istanbul Ataturk Airport, but market demand has created an opportunity to deploy additional capacity into Sabiha Gokcen. The route will be serviced by an A330-200.
New A380s on the Etihad Abu Dhabi to London Heathrow route helped to deliver a strong increase in passengers to the UK, with 27.5% growth registered in 2015. Other busy routes from AUH included Australia, up 30%, Germany up 15% and significant increases on services to the USA.
Clearly Etihad is working very hard to develop frequency, both in its own right and via its strategic equity partnerships with Air Serbia, Air Seychelles, Air Berlin, Alitalia, Jet Airways and Virgin Australia.
Grant concurred. The important expansion of long-haul services to three additional US markets, the doubling of destinations in Australia and the launch of services to Sao Paulo, are all important flagship operations that reflect the ambition of the airport and its base carrier, he said.
“However, perhaps of greater strategic importance, is the growth of regional services to India as a consequence of the Jet Airways equity partnership with Etihad, and the increase in services to other markets in the Middle East, which enhance the connectivity of Abu Dhabi and underpin the longer haul services,” he suggested.
Etihad, itself, now has more than a 79% share of all scheduled flights operated at the airport, according to OAG, compared to 63% in 2012. When its partner services are added, those percentages increase to 84% of all flights.
“This percentage share highlights Etihad’s dominance in Abu Dhabi and also, perhaps, the vulnerability of the network to a single carrier or group position where, for comparative purposes, the combined Emirates and Flydubai network accounts for a very strong, but slightly less dominant 67%, in the Emirati,” said Grant.
The rapid growth of low-cost airlines in the region, specifically in Dubai and Sharjah, further highlights the challenges facing Abu Dhabi, despite its recent levels of success Grant said over the last five years, across the three major airports in the UAE, OAG has seen low-cost services increase to some 84,500 scheduled flights, compared to 32,500 in 2012.
“Abu Dhabi now has only a 2% share of the low-cost frequency across the three airports against a 5% share in 2012 and less than 2% of all scheduled flights operated from the airport are from low-cost carriers. This represents a significant shift against the global market trend for low-cost carrier growth at most unrestricted airports,” Grant analysed.
Abu Dhabi’s diverse geographic network serves some 115 destinations through its connections, and the structure of the Etihad network is key to the traffic at the airport, even more so when the competing local airports in Dubai and Sharjah can serve the local Emirati market.
In the last quarter of 2015, Grant said more than 1.5 million one-way passengers connected via Abu Dhabi, which both highlighted the importance of this traffic to the airport’s future and the inherent risk of any airport where hub traffic plays such a vital role in the commercial operation.
At the start of 2016, Abu Dhabi Airports announced a partnership with global IT provider, SITA, to introduce its latest technologies across AUH’s three terminals. The transformation is part of the airport operator’s preparations for AUH reaching a capacity of 45 million passengers by 2017.
Middle East carriers had the strongest year-over-year demand growth in January 2016 at 10.9%, according to the International Air Transport Association (IATA), helped by on-going network and fleet expansion.
This upswing in airline capacity has put considerable pressure on the region’s hubs to meet the rapid growth in passenger numbers and expansion of their airport facilities. “However, expanded facilities will only get you so far,” hinted Hani El-Assaad, SITA president for Middle East, India and Africa.
As part of the five-year contract, SITA will provide a range of fully integrated airport systems. One of these includes its airport management solution, which will allow Abu Dhabi Airports to proactively manage the operation of AUH by providing real-time information from across all facilities. This will enable the operations team to plan for events before they happen, while ensuring resources are fully optimised.
“Technology can play a key role in meeting the growing passenger numbers, ensuring smooth flow through the airport, and providing a memorable experience to each and every passenger,” said El-Assaad.
“Abu Dhabi Airports has recognised the importance of using technology smartly to get the most out of its facilities and has turned to SITA to help transform air travel at the airport through the use of technology.”
He expressed his admiration for AUH’s ability to meet the rapid growth it has experienced over the past few years without compromising the service offered to passengers. El-Assaad added: “We have worked alongside the team at the airport to provide the technology to manage everything from check-in and airport management systems to self-boarding gates, across the existing terminals. Abu Dhabi Airports has recognised the value we bring as an IT partner which can deliver not only improved operational efficiency, but also an enhanced passenger experience.”
SITA is currently working with the airport to implement a complete airport management solution in the new midfield terminal, expected to open next year. El-Assaad explained that the solution would assist AUH in simplifying its operations, while improving profitability. He said an integral part of this solution was SITA’s ‘AirportCentral’, the airport operational database, which will allow the airport to centralise all its data into a single repository of operational information.
“The investment in SITA’s latest innovations will bring the airport’s entire IT infrastructure in line with the systems that SITA is already implementing in the new midfield terminal, currently under construction. These new technologies will help improve the airport’s operational efficiency while providing a seamless passenger experience across all terminals.”
The first boarding bridges have now been installed at the midfield terminal, deploying smart airport technologies. Each will interface with the visual docking guidance systems, which direct aircraft to their gate parking positions.
Eight of the bridges have been specifically designed to serve the upper deck of the Airbus A380, with the longest bridge capable of extending by up to 45 metres.
SITA has provided the airport with a new traveller document authentication system, using boarding pass validation technology, which should enhance security, accelerate processing and reduce waiting times for passengers by automatically verifying all types of boarding passes, including mobile and home-printed passes. The use of this technology at AUH will be the first deployment of the product in the Middle East.
In addition to these systems, new automated boarding gates and flight information display systems will be installed, El-Assaad reported.
Looking ahead, SITA plans to continue working with Abu Dhabi Airports to explore new solutions that will address emerging challenges as the airport continues to grow. “They have always been keen to explore new technologies that help streamline their operation and create a great passenger experience,” said El-Assaad.
“For SITA, this gives us a tremendous opportunity to provide technology that will help the industry fully unlock its potential and further elevate the experience that passengers have come to expect from the region’s airlines and airports.”
In the meantime, AUH has been awarded the ISO 22301 management system certificate for business continuity management. Abu Dhabi Airports said it was the first in the region to gain that certification.
The award is the international benchmark of good practice in business continuity management and recognises the steps that Abu Dhabi Airports has taken to implement processes that will provide continuity of its operations during disruptive events.
There is no doubt that the future of Abu Dhabi and its continued growth, like so many other airports, rests with the continued success of its base carrier – Etihad in this case. As Grant puts it, what is perhaps not realised is just how strong that reliance is in today’s competitive environment, perhaps more so than either Dubai or Doha.
“Attracting new carriers to the airport and encouraging growth of new segments, particularly in the form of low-cost carriers, are some of the challenges that the airport will face as the new midfield terminal comes online at the end of 2017, all of which has to be set against a major competitor less than 80 miles away with a 25-year growth advantage,” Grant concluded.