Ready for take off, New Doha International Airport
The New Doha International Airport, with construction investment of more than QR64 billion, is set to open its doors by the second half of 2013. Martin Rivers examines Doha's vision to become the busiest transit hub in the world once the airport is completed in 2015 - and the country's high demand for the deluxe private jet industry.
When the New Doha International Airport (NDIA) opens its doors on 12 December 2012 (recently delayed to the second half of 2013), the Gulfs youngest aviation hub will be able to handle 12.5 million passengers per year more than eight times the current population of Doha. By the time it is completed in 2015, the 5400 acre site will be almost two-thirds the size of the capital.
Qatar Airways chief executive Akbar Al Baker, who also heads up the development of NDIA, revealed last month that the project would be more expensive than planned. His latest estimate pegs it at US$17.5 billion (QR64 billion), but few will be surprised if costs rise further.
However for Qatar, which has allocated 40 percent of its budget between now and 2016 to infrastructure projects, this is undoubtedly a price worth paying. The tiny Gulf state places aviation at the heart of its economic growth plans matching commitments by the governments of Abu Dhabi and Dubai and the NDIA will be the centrepiece of Dohas strategic vision to become one of the busiest transit hubs in the world.
By 2015, the airport will have an annual capacity of 50 million passengers and two million tonnes of cargo more than double the traffic currently passing through Doha. As well as accommodating rapidly expanding Qatar Airways in its main passenger terminal, the Emiri Terminal will re-define luxury travel for selected officials and dignitaries. By combining quality with quantity, NDIA will set the tone for Qatars rising star for decades to come.
Business aviation operator Rizon Jet, a subsidiary of Ghanim bin Saad al Saad & Sons Group Holdings, is one of the many Qatari companies that will be affected by the NDIA project, which is being developed just four kilometres to the east of the current airport.
We are considering our options [in] moving at this time. A lot depends on the wider plan for the existing airport, chief executive Hassan Al Mousawi tells TheEDGE. With authorities also talking up a US$140 million (QR509 million) refurbishment programme for the current hub, he clarifies, Once we know the final plan, we can take a decision on which location is best for us, and most importantly for our customers.
Rizon Jet was founded just six years ago, but its investment in the existing gateway is plain to see. In March, it became the first private jet operator to open its own terminal in Doha International Airport, complementing its other VIP base at Londons Biggin Hill Airport. The facilities at both sites have been tailored to the firms high-end corporate clientele, comprising luxury lounges, fine dining menus, business suites and teleconferencing boardrooms.
We would like to stay here, Al Mousawi says of his extravagant new terminal in the current Doha gateway. But if the decision is taken to close the airport, then we are prepared to build an even better facility at the New Doha International Airport.
Wherever the firm bases its operations, it is well positioned to benefit from the booming charter industry. A host of business jet operators have sprung up across the Gulf region over the past decade with the United Arab Emirates (UAE) and Saudi Arabia emerging as hotspots for the sector and Qatars burgeoning economic prowess, combined with its pre-eminence as a mass transit hub, positions Doha as an ideal player.
We operate out of Doha International Airport, but our business is not directly related to the airport hub, the chief executive notes. Our business is fuelled by the economic activity of Qatar and the Gulf region, and the demand for exclusive business and leisure travel that that activity creates.
Deeper penetration into Europe and the Middle East lies at the core of Rizon Jets growth strategy, ensuring that the Doha-based company connects with new market opportunities wherever they emerge, in what Al Mousawi stresses is a quintessentially global business.
To this end, the company is already looking beyond Doha and London. A new operating base is planned for Paris Le Bourget Airport in 2014, establishing a vital presence in Europes busiest business aviation airport. Closer to home, Al Mousawi was at the time of writing poised to announce the placement of a Bombardier Challenger 605 in the Saudi capital Riyadh.
The Saudi market is very active, and it is important for us to have a presence there, he explains. The nature of our business is a lot of ad hoc and short-notice flights, and having an aircraft positioned there will allow us to react even faster. It also saves some of the empty-leg costs associated with getting an airplane into Riyadh.
Supporting this expansion, the company is steadily increasingly its fleet size. On top of the two Challenger 605s and one Hawker 900XP owned by Rizon Jet, its management division also looks after one Bombardier Global Express and one additional Challenger 605 on behalf of private customers. United Kingdom (UK) affiliate Oryx Jet provides access to another three planes, while an Airbus Corporate Jet will join the fleet in 2013 on a private management contract.
We not only provide airplanes that are available for charter, Al Mousawi notes, emphasising the need for operational flexibility given unpredictable levels of demand in the private jet industry. We can work on three models charter only, mixed charter and private, and private only.
Ongoing economic headwinds mean Qatars business jet operators must diversify their activities still further in order to mitigate risk. Alongside its charter and management divisions, Rizon Jet offers independent private jet owners access to its fixed-base operations (FBO) comprising services like fuelling, hangarage and VIP passenger handling while its maintenance, repair and overhaul (MRO) division provides technical support for an array of aircraft types.
These combined operations provide a one-stop shop for business aviation, in Al Mousawis words, keeping his 100-plus employees amply occupied. But the company faces stiff competition from Qatar Executive, the private jet subsidiary of Qatar Airways, which has six Challenger and Global aircraft of its own, and which can piggyback on the traffic of its gigantic parent company.
While all 108 aircraft in Qatar Airways fleet can transport cargo in their belly holds, burgeoning demand for inter-continental freight services via the Gulf has led the flag carrier to invest in a bespoke cargo fleet. Subsidiary Qatar Airways Cargo (QAC) currently operates seven freighter aircraft three Airbus A300Fs and four Boeing 777Fs with another four 777Fs due to arrive between now and 2014.
Offering 113 destinations across its network, including 20 dedicated freighter routes, QAC provides extensive cargo services to Asia, the Middle East, Africa, Europe and the Americas. Last year alone, Doha International Airport processed 796,000 tonnes of cargo, utilising the hubs trans-shipment facilities, which include temperature-adjusted chillers, high-value commodities storage and dangerous goods holding areas. Everything from electronics to motor vehicles to livestock routinely makes its way through the gateway.
With the New Doha International Airport (NDIA) expanding annual cargo capacity to two million tonnes upon completion, Qatar Airways chief executive Akbar Al Baker in May hinted at the conversion of up to 20 Airbus A330 passenger jets into freighters. The new wave of expansion follows last years acquisition of a 35 percent stake in European freight carrier Cargolux, which dramatically extended the reach of QACs overseas network.
Though Qatar Airways embodies the same meticulous focus on luxury being one of just five airlines on the planet awarded a five-star rating by aviation research firm Skytrax the company has altogether grander aspirations than private jet operators such as Rizon Jet.
Having started in 1994 with a single wet-leased Boeing 767, Qatar Airways has ballooned in size to become the Gulfs second largest carrier. Its fleet of 108 aircraft will grow by another 11 jets before the end of the year, and with 250-plus deliveries in the pipeline it expects to double in size by 2020. This expansion is borne out by the flag carriers extensive route network, which now totals 113 destinations and continues to grow on a monthly basis.
Aggressive expansion has been a key element of our growth strategy and this level of upturn is set to continue, chief executive Al Baker tells TheEDGE. Last year we inducted 15 new routes to our network and this year we have already planned 13 new destinations all coming at a time of aggressive expansion in the region, and amid tough economic conditions worldwide.
Al Baker acknowledges that Gulf aviation has become fiercely competitive with Dubais Emirates Airline and Abu Dhabis Etihad Airways also growing exponentially but he insists this is good for the wider industry, saying: Regional rivalry is a challenge and we welcome it, as we always consider competition to be healthy for us and for the travelling public, who are given greater choices.
Further afield, however, Qatar Airways has an uneasy relationship with legacy carriers in Europe and North America. Germanys Lufthansa and Air Canada in particular have accused Gulf airlines of state support, and are lobbying their own governments to restrict landing rights.
They are only doing it because of insecurity, jealousy and [because they are] unable to cope with the competitive threat of Gulf carriers, Al Baker argues, calling such tactics unethical and noting that Europes airlines have a long history of enjoying state subsidies. We have successfully carved a niche for ourselves and have shifted the goalposts on a global level. We are proving time and again to be pacesetters and go-getters in all areas of operation, while others are falling behind.
The shared success of Qatar Airways, Emirates and Etihad has as much to do with geography as with pro-aviation government policies. The Gulf sits at the crossroads between East and West, placing more than two billion people within four hours flying time, and connecting any two major cities on the planet without additional stopovers.
For European airlines whose home bases have long functioned as inter-continental hubs, Gulf aviation therefore represents a unique threat. Qatars heavy investment in air transport aims to re-draw well-trodden global flight paths, siphoning transit traffic away from Frankfurt, Paris and London, instead funnelling it through Doha.
Al Baker is resolute when asked about protectionist moves by Western governments, promising that Gulf carriers will continue to apply pressure individually and collectively to aviation bodies, governments and regional associations to fight for equal competition. He is ultimately optimistic, adding, There is no doubt that by continuing to offer quality service and more choice, we as airlines in the region will win the fight and give travellers what they fully deserve.
To this end, the NDIA project will ensure Qatars ground services are second-to-none, while Al Bakers growing fleet soon to include the first Boeing 787 Dreamliners in the Gulf will match this quality in the skies overhead. Alongside a healthy competitive environment both at home and abroad, Qatars aviation sector looks set to take off.