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It appeared as if the UAE, and Dubai in particular, could do no wrong when it came to maximising the potential of its fast-growing aviation sector. But the next decade would provide a wake-up call for even the strongest market players as the world was challenged by a lethal mix of terrorist attacks (September 11th), a hard-hitting global recession and continued Middle East political unrest. Yet almost impervious to the impact, Emirates continued to post an increase in passenger figures, rising to 6.8 million in 2002 with cargo up to 400,000 tonnes. Closely watching the success of its Emirati neighbour, Abu Dhabi launched its own carrier, Etihad Airways, with an initial investment of around US$136 million. Etihad started with commercial flights in 2003 and rapidly extended its network. By 2010, its fleet had grown to 56 aircraft serving an international network of 66 destinations. Although not quite reaching the escalated purchasing levels of Emirates, Etihad announced one of the largest aircraft orders ever for up to 205 aircraft at Farnborough Airshow 2008. A year later, it was reporting a rise in passenger traffic from 6.0 to 6.3 million, with total revenue exceeding $2.3 billion.
Although Emirates and Etihad’s spending sprees dominated the headlines in the 2000s, a niche market attracted the UAE’s attention. Low cost airlines had been growing immensely across Europe and the United States, and the UAE launched what would go on to become one of the Middle East’s largest low cost carriers, Air Arabia, in 2003. The Sharjah-based airline has served well over 20 million passengers and grown staunchly in its short lifespan to date. Hot on its heels was the region’s second budget carrier, flydubai, established five years later in 2008. By 2011, the flydubai fleet had grown to include 20 Boeing 737-800 aircraft. Possibly the most affected by the financial crisis out of all the UAE’s airlines, Ras Al-Khaimah’s carrier, RAK Airways, set off to an inauspicious start. Originally launched in 2006, the carrier had to close operations in 2009 before re-emerging a year later with a ‘value for money’ business model between the full-service and low cost markets.
Abu Dhabi Airports Company (ADAC) was formed in 2006 to operate Abu Dhabi International Airport and its ambitious multi-billion dollar expansion plan. As the plan unfolded, a second runway was opened in 2008 together with an exclusive terminal for Etihad (Terminal 3) in the next year. This increased the airport’s passenger handling capacity from five to 12 million passengers a year. Sharjah Airport also showed steady growth, developing a strong reputation in cargo services. In 2006, the airport reported a year-on-year rise in aircraft movements by 14.2%, with 36.9% passenger growth to 3.064 million passengers and freight handling increasing to 569,511 tonnes.
As the region’s aviation industry continued to enjoy success, the dark shadow of economic recession began to spread across the globe towards the end of the decade. Whilst some industries in the UAE took a battering, the surprisingly-buoyant aviation sector managed to shield itself from much of the recession’s impact.
Dubai International Airport celebrated its own 50th anniversary in 2010 as one of the busiest airports in the world, a couple of years after Emirates’ own terminal 3 had started operations in 2008. As orders from a recession-weary Europe and the US took a backseat, Emirates continued to show defiance, continuing its fleet expansion plans at
a voracious rate to become the world’s largest Boeing 777 operator.
Private jet sales were also flourishing due to the region’s fast-growing business aviation sector, with an upsurge in private jet companies and associated services. The region experienced an increase in the number of FBOs in both Dubai and Abu Dhabi, with the latter going one huge step further with the completion of an airport exclusively for the business aviation sector. Set up at the old Bateen Airport site in 2008, the new Al Bateen Executive Airport is undergoing a multi-million dollar expansion programme and has already reported a sharp 36% increase in commercial aviation traffic through 2010 compared to the previous year.
To keep up with the enormous aviation potential, the DCA underwent a major restructuring in 2007, resulting in the creation of Dubai Civil Aviation Authority (DCAA) as the local regulatory body, and Dubai Airports as the owner and operator of Dubai’s two airports – Dubai International and Dubai World Central – Al Maktoum International. The latter is touted to become the largest aviation hub in the world.
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