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The Gulf’s Aviation Industry: Rags to Riches in 30 Years
In 1971, the Arabian Peninsula began to take on a whole new look. In August, Bahrain gained their full independence, and Qatar quickly followed in September. In December, seven emirates nations were freed from British rule when a longstanding treaty finally expired.
Two emirates – Dubai and Abu Dhabi – decided to form an alliance and invite the rulers of neighboring nations to join. Four quickly accepted their invitations to join the newly named United Arab Emirates, but Qatar and Bahrain declined. But early the next year, Ras al-Khaimah joined, and the UAE as it is known today was born.
The UAE began to flourish under a united economy, and Qatar’s oil revenues spiked drastically following their independence. A combination of diversification and increased income from oil, petroleum, and national gas, pushed the two up the list of the world’s richest countries. And with zero percent of their population currently sitting below the poverty line, they could focus their wealth in other places – for example, the airline industry.
The Airports and Airlines – Crafted for a Perfect Fit
In 1960, the first airfield in Dubai was officially opened, with facilities that included a 6,000-foot-long sand runway and a small terminal. The airport continued to grow slowly and earn minor expansions until after both the UAE’s creation and the advent of wide-body aircraft. In the 1970s, the airport received a huge new terminal building, control tower, and numerous other improvements, too.
In March 1985, Emirates Airline was founded with $10 million in start-up capital. The first flight took to the sky bound for Kuwait in October of that year. By the early 1990s, Emirates had become one of the fastest-growing airlines in the world, already posting revenues of almost $500 thousand by 1993.
The Gulf War was a huge turning point for the airline, as Emirates’ business increased greatly with many foreign airlines temporarily halting flights in and around the region. In the mid-1990s, the airline received its first Boeing 777-200 aircraft, expanding their operations as far as Singapore, which allowed them to connect to destinations in east Australia. And by the late 1990s, the airline was already turning a yearly profit of more than $100,000.
The late 1990s also saw the expansion of Dubai’s airport, with the opening of Terminal 2 and a runway reconfiguration that lasted well into the early 2000s. Throughout the 2000s, the airport saw huge expansions that included Terminal 3, allowing the airport to take in nearly 75 million passengers annually. By the airport’s 50th anniversary in 2010, the aircraft had seen over 402 million passengers and almost 4 million aircraft.
In the early 2000s, the Emirati airline industry saw huge changes. In 2000 Emirates placed an order for 25 Boeing 777-300s and 22 Airbus A380 aircraft, as well as some other heavies. In 2003, the airline placed a $19 billion order for 71 aircraft, including 21 more A380s. By the next year, the airline had started service to the U.S., just the first of dozens of routes that the Gulf carriers would fly to the States in the following years.
In 2003, the Emirati government announced the creation of a second flag carrier based in Abu Dhabi, to be named Etihad Airways. The airline received start-up capital of 500 million AED, and by November the airline had taken to the skies with a flight to Al Ain, United Arab Emirates.
The airline and its fleet size quickly took off, placing orders for 29 aircraft in 2004 and a staggering 205 aircraft in 2008.
In 2011, the airline turned its first profit as Emirates turned a profit of over a billion dollars, a feat the has repeated twice since then.
The airlines and their home airports have all continued to grow and flourish. In 2016, Dubai Airport saw over 86 million passengers arrive and depart, and Abu Dhabi saw over 25 million. And today, Emirates flies to 140 destinations across the globe with a fleet of 256 widebody aircraft. Etihad currently serves 90 destinations with 123 aircraft.
Doha International Airport had been around for decades but received little use other than whatever traffic foreign carriers brought to the small nation. The vast majority of airline traffic came from those foreign carriers, and in the early 1990s, the government came to the realization that there was a huge void that needed filling, especially as Qatar’s economy continued to grow.
The airline was established in 1993 and began operations in January 1994. By 1995, a total staff of 75 ran an airline whose route network stretched from London to Tokyo, the vast majority of long haul flights served by Airbus A310s. As the 1990s moved on, the carrier’s wide and narrow-bodied fleets continued to grow with the pick-ups of Boeing 747s, Airbus A320s, and Boeing 727s.
As the early 2000s began, the growth of Qatar Airways began to put more stress on the one-runway Doha International Airport. So in 2003, planning began for a new airport to take its place, one that could handle the stress of an ever-expanding airline using the airport as its only hub. In 2005, construction began at the site of the new airport, three miles east of Doha International.
In 2007, the airline and Airbus reached an agreement for 80 Airbus A350XWB aircraft. Later that year, Qatar Airways ordered 30 Boeing 787-8 aircraft along with options for 35 more of the -9 and -10 varieties. The same order included plans to buy 27 Boeing 777 aircraft of different variants. In total, Qatar Airways placed orders or had options for 172 aircraft that year, effectively cementing their future status as a huge force in long-haul markets across the globe.
In the years that followed, the airline continued to expand and grow its fleet, and the airline’s CEO, Akbar Al Bakar said the airline posted a $103 million profit in 2014.
That same year, however, marked the opening of Doha’s new airport. Hamad International Airport. which welcomed its first aircraft on April 30, 2014. The airport has an initial capacity of 29 million passengers annually, but after it is completed, it should be able to handle 50 million annual passengers.
The $17 billion airport has been called everything from an oasis to an opulent palace meant to play host to Qatar Airways. Despite being six years behind schedule, the airline and its CEO were hugely proud of the masterpiece they had created after its opening.
Currently, there are 152 active aviation-related projects going on in the Middle East, according to Gulf News. Those have a combined value of nearly $60 billion, which include billions set aside for expansions of airports in Saudi Arabia and the United Arab Emirates.
The region’s aviation markets are some of the fastest growing in the world, despite years of growth previously unseen in the industry. Emirates still has to take delivery of dozens of A380s, and the “Big Three” Gulf carriers combined are waiting for hundreds more wide-body aircraft to make their way from Airbus and Boeing plants on the other side of the world to begin their time in service as a small piece of a global phenomenon in the airline industry.
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