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Dubai plans world's biggest airport to carry 220m passengers per year Dubai plans world's biggest airport to carry 220m passengers per year
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Dubai is set to build the world’s biggest airport that will carry up to 220 million passengers per year as the oil-rich emirate seeks to solidify its position as a global aviation hub. Dubai is set to build the world’s largest airport, accomodating up to 220 million passengers per year, as the oil-rich emirate seeks to solidify its position as a global aviation hub.
The $35.7 billion (£29 billion) investment will be made in Dubai World Central and associated facilities, including Al Maktoum International airport, over the next 12 years, two people with knowledge of the plan said. The spending plan is outlined in documents inviting banks to bid for a $3 billion loan the government is seeking to raise for initial expansion, the people said. HSBC is the financial adviser on the loan. The $35.7 billion (£29 billion) investment will be made in Dubai World Central (DWC), which will support the new Al Maktoum International Airport, and other facilities in the south of the city, over the next 12 years.
The loan is being raised by a special purpose company, which will be paid by Dubai’s department of finance based on a formula linked to passenger numbers at the city’s two airports, said the people. The company will also raise future funding for the project including debt, the people said. Documents outlining the spending plan invite banks to bid for a $3 billion loan, which the government hopes will cover the initial expansion. HSBC is acting as a financial adviser on the loan.
Al Maktoum International is at the heart of Dubai World Central, a 54 square mile multiphase development of six zones, including for logistics, offices, residences and golf, according to Dubai Airports’ website. Costs for the entire DWC development have been estimated in excess of $32 billion, according to the company. It's being raised by a special purpose company, which will be paid by Dubai’s Department of Finance (DOF) based on a formula linked to passenger numbers at the city’s two main airports, anonymous sources have confirmed.
“The proposed borrowing, especially in the context of the chunky headline number, may raise some questions marks and even concerns in the minds of investors,” Chavan Bhogaita, head of market insight and strategy at National Bank of Abu Dhabi PJSC, said by phone. “In recent years we have seen a significantly more mature, sophisticated and sustainable approach to debt financing by Dubai entities.” The company will also raise future funding for the project including debt financing.
Upon completion, Al Maktoum will become the world’s largest airport with an ultimate capacity exceeding 220 million passengers and 16 million tons of cargo per year. Al Maktoum is close to the World Expo 2020 site and Dubai plans to move flagship carrier Emirates there by 2025. A spokesman for Dubai’s department of finance declined to comment. Costs for the entire DWC development have been estimated in excess of $32 billion.
Dubai International Airport, the emirate’s main facility now, is already the world’s busiest by international passengers as the city developed into a hub for trans-continental traffic between America and Europe with Asia. Traffic rose at an average compound annual growth rate of 13 percent between 2000 and 2015 as Emirates expanded into the world’s biggest airline by international passengers. “The proposed borrowing, especially in the context of the chunky headline number, may raise some question marks and even concerns in the minds of investors,” Chavan Bhogaita, head of market insight and strategy at National Bank of Abu Dhabi PJSC, said. “In recent years we have seen a significantly more mature, sophisticated and sustainable approach to debt financing by Dubai entities.”
Dubai International and Al Maktoum will grow to serve 146 million passengers by 2025, up from 78 million in 2015, the government said last month. The master plan for Al Maktoum’s second phase has been approved and the detailed design work is under way, while Dubai International is approaching maximum capacity and is facing space constraints, it said. Upon completion, Al Maktoum will become the world’s largest airport with an ultimate capacity exceeding 220 million passengers and 16 million tons of cargo per year. Dubai plans to move flagship carrier Emirates to the nearby World Expo 2020 site by 2025. A spokesman for the DOF declined to comment.
Dubai International Airport expects to become the world’s busiest within this decade, overtaking Beijing and Atlanta, spurred on by the expansion of Emirates airline, Dubai Airports chief executive Paul Griffiths said in October. The facility, which overtook London Heathrow, expects passenger traffic climbing to 83 million this year and expects 90 million people to use the facility next year. Dubai International Airport, the emirate's primary air hub for trans-continental traffic between America, Europe and Asia, is already the world’s busiest airport by international passengers. Traffic rose at an average compound annual growth rate of 13 per cent between 2000 and 2015 as Emirates expanded into the world’s biggest airline in terms of passenger numbers.
The government has estimated that Dubai International and Al Maktoum will grow to serve 146 million passengers by 2025, up from 78 million in 2015. Plans for Al Maktoum’s second phase have been approved and design work is getting under way.
Dubai International Airport, now approaching maximum capacity and facing space contraints, expects to become the world’s busiest hub in the next decade, overtaking Beijing and Atlanta. The excelerated growth seen in the last few years was spurred on by the expansion of the Emirates airline, Paul Griffiths, chief executive at Dubai Airports, said earlier this year.
The facility, which has overtaken London Heathrow, expects passenger traffic to climb to 83 million this year.
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