DWC
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Dubai World Central (DWC) expansion officially halted

Fri Aug 30, 2019 8:37 pm

From Bloomberg, quoting "people, who asked not to be named due to the sensitivity of the topic" :

"Construction activity has been halted and finances for expansion frozen until further notice"
https://www.bloomberg.com/news/articles ... es-stumble

While this comes as no surprise given the recent economic & geopolitical downturns in the past year, it does underline some questions :
1) EK & EY are nowhere near merging
2) let alone move both to DWC
3) EK does not seem to need massive expansion soon & thus DWC, now that yields are lower & the A380 discontinued.
4) DXB therefore will have to sustain whatever growth, and
5) as DXB is constrained, that means moving other airlines to DWC to keep DXB to EK & FlyDubai.
6) How is IST influencing this ? Note that TK flies a lot of NBs
Thoughts ?
Last edited by DWC on Fri Aug 30, 2019 8:44 pm, edited 2 times in total.
 
Blerg
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Re: Dubai World Central (DWC) expansion officially halted

Fri Aug 30, 2019 8:41 pm

I wonder if this means some A380s might stay longer at EK than previously expected?
 
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Revelation
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Re: Dubai World Central (DWC) expansion officially halted

Fri Aug 30, 2019 8:58 pm

Blerg wrote:
I wonder if this means some A380s might stay longer at EK than previously expected?

TFA says:

Dubai’s economy grew at the slowest pace since 2010 last year as the Gulf’s chief commercial center grappled with fallout from geopolitical tensions and a low oil price. Tourism has been stagnant since 2017, while Emirates remains based at the original Dubai International hub as it mulls how best to develop its strategy of carrying passengers between all corners of the globe. The company is finding it tougher to add profitable new routes, and its reworking its fleet plans with the cancellation of the Airbus SE A380 super-jumbo.

I don't see a need to keep A380s longer than expected if the local economy and incoming tourism is stagnant and EK is not finding profitable new routes.

Since the A380s are leased, why pay a high monthly payment for a plane you can't profitably fill, when you can just hand it back to the lessor and bring in a new, smaller, and more efficient 777x/A350/A330 instead?
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DWC
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Re: Dubai World Central (DWC) expansion officially halted

Fri Aug 30, 2019 9:01 pm

Blerg wrote:
I wonder if this means some A380s might stay longer at EK than previously expected?

Well, there is a thread on EK rescheduling its Boeing WB orders, 777X & 787s, and another with their new A350 & A330neo, all of which change the scopes EK had a few years back and what plans Dubai envisionned for DWC, to say nothing of EY's scaling down.

This also influences EK's prospects to keep the A380 longer : while their strategy is based still on the A380 (and 777s), the commercial environment is evolving towards smaller WBs, so in the next decade they may not need all that whopping hundred plus whale jets.


Revelation wrote:
Since the A380s are leased, why pay a high monthly payment for a plane you can't profitably fill, when you can just hand it back to the lessor and bring in a new, smaller, and more efficient 777x/A350/A330 instead?

Agreed.
 
rrbsztk
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Re: Dubai World Central (DWC) expansion officially halted

Fri Aug 30, 2019 9:51 pm

Revelation wrote:
Blerg wrote:
I wonder if this means some A380s might stay longer at EK than previously expected?

TFA says:

Dubai’s economy grew at the slowest pace since 2010 last year as the Gulf’s chief commercial center grappled with fallout from geopolitical tensions and a low oil price. Tourism has been stagnant since 2017, while Emirates remains based at the original Dubai International hub as it mulls how best to develop its strategy of carrying passengers between all corners of the globe. The company is finding it tougher to add profitable new routes, and its reworking its fleet plans with the cancellation of the Airbus SE A380 super-jumbo.

I don't see a need to keep A380s longer than expected if the local economy and incoming tourism is stagnant and EK is not finding profitable new routes.

Since the A380s are leased, why pay a high monthly payment for a plane you can't profitably fill, when you can just hand it back to the lessor and bring in a new, smaller, and more efficient 777x/A350/A330 instead?


How likely is it there will be a competitive market for the A380s second hand. With how many they have i'm wondering if the lessor might offer a much lower rate instead of taking them back. They might not be so much profit focused as avoiding massive write offs. Is it feasible they would lease them cheap enough to offset the A380 more expensive costs (could it go as crazy as a 50% full a380 is more profitable than a 95% full new smaller plane)?
 
32andBelow
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Re: Dubai World Central (DWC) expansion officially halted

Fri Aug 30, 2019 9:59 pm

rrbsztk wrote:
Revelation wrote:
Blerg wrote:
I wonder if this means some A380s might stay longer at EK than previously expected?

TFA says:

Dubai’s economy grew at the slowest pace since 2010 last year as the Gulf’s chief commercial center grappled with fallout from geopolitical tensions and a low oil price. Tourism has been stagnant since 2017, while Emirates remains based at the original Dubai International hub as it mulls how best to develop its strategy of carrying passengers between all corners of the globe. The company is finding it tougher to add profitable new routes, and its reworking its fleet plans with the cancellation of the Airbus SE A380 super-jumbo.

I don't see a need to keep A380s longer than expected if the local economy and incoming tourism is stagnant and EK is not finding profitable new routes.

Since the A380s are leased, why pay a high monthly payment for a plane you can't profitably fill, when you can just hand it back to the lessor and bring in a new, smaller, and more efficient 777x/A350/A330 instead?


How likely is it there will be a competitive market for the A380s second hand. With how many they have i'm wondering if the lessor might offer a much lower rate instead of taking them back. They might not be so much profit focused as avoiding massive write offs. Is it feasible they would lease them cheap enough to offset the A380 more expensive costs (could it go as crazy as a 50% full a380 is more profitable than a 95% full new smaller plane)?
there is no secondary markets. The airlines that buy planes second hand could never afford the operating costs.
 
JamesCousins
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Re: Dubai World Central (DWC) expansion officially halted

Fri Aug 30, 2019 10:18 pm

I worry about the potential of an Etihad effect on Emirates. As soon as EY started cutting routes the connecting traffic fell and the effect was that the rest of the route network suffered dramatically. As the airline desperately tried (and is still trying) to keep things afloat they cut unprofitable routes that in turn contributed to other routes becoming unprofitable.

Now Emirates is of course running on a far larger scale than EY ever was, and the fleet-wide downsizing from the A380 over the next 15-20 years may control capacity in an even and disciplined way, but how they can add new frequencies to thinner routes on the A330/A350 sized aircraft to bolster their market position, without the extra slots DWC provides, is where I struggle to join the dots. Of course the idea of moving out other airlines from DXB would make room, but I struggle to see how this wouldn't negatively impact the airline as a whole, essentially splitting EK (inc FlyDubai) and non EK pax
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Polot
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Re: Dubai World Central (DWC) expansion officially halted

Fri Aug 30, 2019 10:28 pm

Moving other airlines to DWC and keeping DXB to EK and FlyDubai is difficult. Most bilaterals require equal access. If Dubai wants to move out the other airlines go ahead, but those airline’s home countries will in turn require EK/FlyDubai’s flights to operate from DWC too.
 
planemanofnz
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Re: Dubai World Central (DWC) expansion officially halted

Fri Aug 30, 2019 10:51 pm

Is one of EK's ways forward going to be to ramp up new fifth-freedom routes, akin to BCN - MEX and DPS - AKL? I know they've recently cut a lot of fifth-freedoms, particularly to Australia though, and fifth-freedoms are more expensive to run.

Cheers,

C.
 
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thekorean
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Re: Dubai World Central (DWC) expansion officially halted

Fri Aug 30, 2019 10:56 pm

Polot wrote:
Moving other airlines to DWC and keeping DXB to EK and FlyDubai is difficult. Most bilaterals require equal access. If Dubai wants to move out the other airlines go ahead, but those airline’s home countries will in turn require EK/FlyDubai’s flights to operate from DWC too.

Maybe they can incentivize low cost airlines to move with lower landing fees?
 
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Revelation
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Re: Dubai World Central (DWC) expansion officially halted

Fri Aug 30, 2019 11:53 pm

Polot wrote:
Moving other airlines to DWC and keeping DXB to EK and FlyDubai is difficult. Most bilaterals require equal access. If Dubai wants to move out the other airlines go ahead, but those airline’s home countries will in turn require EK/FlyDubai’s flights to operate from DWC too.

Indeed, it seems if things don't change for the better DWC will become the "Mirabel of the Middle East", with little more than cargo ops keeping the joint opened.
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Vasu
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Re: Dubai World Central (DWC) expansion officially halted

Sat Aug 31, 2019 12:15 am

Revelation wrote:
Polot wrote:
Moving other airlines to DWC and keeping DXB to EK and FlyDubai is difficult. Most bilaterals require equal access. If Dubai wants to move out the other airlines go ahead, but those airline’s home countries will in turn require EK/FlyDubai’s flights to operate from DWC too.

Indeed, it seems if things don't change for the better DWC will become the "Mirabel of the Middle East", with little more than cargo ops keeping the joint opened.


This is the sort of thing I could’ve imagined the day DWC was announced - yes it was ambitious, and yes it was “future-proofing”, but it just seemed too much extra capacity too soon. I remember wondering how on Earth so much extra capacity could possibly be needed in Dubai so soon!
 
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Zoedyn
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Re: Dubai World Central (DWC) expansion officially halted

Sat Aug 31, 2019 12:20 am

I guess that means Dubai has exited the tight airport race regarding the world’s top-10 busiest airports by pax traffic in the foreseeable future.

Surely a two-rwy DXB will be fast losing its competitiveness for such title in the face of a growing list of many competing three/four/five-rwy hubs that keep cropping up amid rapid pax growth in Asia :!:
 
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zeke
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Re: Dubai World Central (DWC) expansion officially halted

Sat Aug 31, 2019 12:32 am

Revelation wrote:
I don't see a need to keep A380s longer than expected if the local economy and incoming tourism is stagnant and EK is not finding profitable new routes.


The local economy depends on the shear volume of people the A380s bring in, that is what fills the hotels and brings people to the shops.
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DWC
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Re: Dubai World Central (DWC) expansion officially halted

Sat Aug 31, 2019 12:41 am

Polot wrote:
Moving other airlines to DWC and keeping DXB to EK and FlyDubai is difficult. Most bilaterals require equal access. If Dubai wants to move out the other airlines go ahead, but those airline’s home countries will in turn require EK/FlyDubai’s flights to operate from DWC too.

JamesCousins wrote:
I worry about the potential of an Etihad effect on Emirates. As soon as EY started cutting routes the connecting traffic fell and the effect was that the rest of the route network suffered dramatically. As the airline desperately tried (and is still trying) to keep things afloat they cut unprofitable routes that in turn contributed to other routes becoming unprofitable.

I trust EK know what they are doing & will not go down the drain the way EY has. My reading is that EK will enjoy growth but far less than their agressive expansion had heralded, the very fact EK & FZ are cooperating more points to that.

I don't know what the bilaterals specifically allow or not, but a few city airport authorities seem to have some latitude to decide who goes where : ADP in Paris (CDG & ORY) and Tokyo (NRT & HND) come to mind. The examples of New York (3 airports), London (4 airports, or more is it?) & Moscow (4 airports) do suggest there are financial (dis)incentives to more cost-conscious operators in legal ways. Money is not all, specially for constrained airports like LHR or DXB. It is after all to local authorities to maximize potential provided all actors have access to a city ( as opposed to specific airports ) ; and access is by no means "equal" : early entrants have the best slots & will hardly relinquish them (LHR), so airlines take what is available.
The magnitude of the EK operation is such to the Dubai economy that any conflict arising with moving certains airlines to DWC is comparatively benign : airlines want to serve Dubai, be it DXB or DWC. There also are other airports nearby, Sharjah is actually closer to downtown Dubai than DWC, DWC itself could appeal to those airlines willing a little trade-off to serve both Dubai & Abu Dhabi with one flight, and of course, while furthest from Dubai, AUH itself is a much trendier & touristic a destination that Qatar.

zeke wrote:
The local economy depends on the shear volume of people the A380s bring in, that is what fills the hotels and brings people to the shops.

Precisely. Dubai will do what it can to preserve EK/FZ growth, so in contrained DXB, I don't see how that can be achieved without moving either other airlines, or some specific EK/FZ flights. I doubt these would use Sharjah. Or am I missing something ?
 
moa999
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Re: Dubai World Central (DWC) expansion officially halted

Sat Aug 31, 2019 12:55 am

zeke wrote:
Revelation wrote:
I don't see a need to keep A380s longer than expected.


The local economy depends on the shear volume of people the A380s bring in.


EK still has 10+ A380s to be delivered. Beyond that I do expect it to keep some aircraft beyond the typical 12 years.. as otherwise you'd be replacing with 777s which further constrains the airport.

Local economy depends on oil.. at least until it runs out.
 
DWC
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Re: Dubai World Central (DWC) expansion officially halted

Sat Aug 31, 2019 12:57 am

moa999 wrote:
Local economy depends on oil.. at least until it runs out.

That's a myth : the tiny emirate of Dubai does not produce oil.
It may refine some, but the big oil player in the UAE is Abu Dhabi.
Dubai is all about services, particularly finance & tourism.
 
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Revelation
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Re: Dubai World Central (DWC) expansion officially halted

Sat Aug 31, 2019 1:20 am

zeke wrote:
Revelation wrote:
I don't see a need to keep A380s longer than expected if the local economy and incoming tourism is stagnant and EK is not finding profitable new routes.


The local economy depends on the shear volume of people the A380s bring in, that is what fills the hotels and brings people to the shops.

True, so the quote "Tourism has been stagnant since 2017" is quite operative.

Why would you keep A380s longer than planned when your tourism has been flat for two years, the regional oil-based economy is flat, and regional and international political tensions are high, especially when you have more efficient 777x/A350/A330 on order?
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zeke
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Re: Dubai World Central (DWC) expansion officially halted

Sat Aug 31, 2019 1:39 am

Revelation wrote:
True, so the quote "Tourism has been stagnant since 2017" is quite operative.

Why would you keep A380s longer than planned when your tourism has been flat for two years, the regional oil-based economy is flat, and regional and international political tensions are high, especially when you have more efficient 777x/A350/A330 on order?


DXB does not depend on oil, hasn’t for a long time.

The term stagnant in that context does not mean declining, reducing the number of seats in DXB by reducing A380s will result in a decline in tourism numbers. A large proportion if their GDP depends on the airport and the number of passengers they bring in.

They need smaller aircraft for their regional routes to replace the older A330/A340s/777s that they have or will soon retire. It is a large jump of conclusion to say the se orders are replacing A380s, when the local economy depends on the numbers those aircraft being in.
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Revelation
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Re: Dubai World Central (DWC) expansion officially halted

Sat Aug 31, 2019 2:07 am

zeke wrote:
DXB does not depend on oil, hasn’t for a long time.

Correct, but a lot of people staying in their hotels, or visiting their shops, or buying seats in premium cabins do depend on oil.

The term stagnant in that context does not mean declining, reducing the number of seats in DXB by reducing A380s will result in a decline in tourism numbers. A large proportion if their GDP depends on the airport and the number of passengers they bring in.

Do the math. https://webcache.googleusercontent.com/ ... irefox-b-1 suggests 17 A380s have been delivered to EK from 2017 onward and 10 more are coming before the line closes. Since tourism has been stagnant from 2017 then it's probably +27 more A380s than they can really bear.

They need smaller aircraft for their regional routes to replace the older A330/A340s/777s that they have or will soon retire. It is a large jump of conclusion to say the se orders are replacing A380s, when the local economy depends on the numbers those aircraft being in.

It's also a great leap to say they can fill all the A380 they have and make profits flying them given the circumstances, not to mention extend the ones they have, which is what the poster was suggesting.

Clearly the Emir agrees, otherwise he would have no reason to stop building DWC or having his airline cancel the A380s they had on order.
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DWC
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Re: Dubai World Central (DWC) expansion officially halted

Sat Aug 31, 2019 2:19 am

A few years back, I read that the "EK group" directly accounted for a whopping 25% of Dubai's GDP.
Which is enormous, consider that when GM totalled 10% of the US economy (sometime in the last millenium), they said "what is good for GM is good for the US & vice versa". The other 75% are associated with construction, financial services, tourism ( hotels, apts & restaurants ), shopping, etc.
So oil does NOT play a big role
in Dubai other than to fuel EK, FZ & the local pollution, which last time I was there was quite daunting.
 
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lightsaber
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Re: Dubai World Central (DWC) expansion officially halted

Sat Aug 31, 2019 2:33 am

In my opinion, China has been waging a trade inhibition by strict bilateral allocation. This reduced Chinese tourism and transit growth.

I fully admit I was far more enthusiastic about DWC 5 years ago. What changed:
1. Regulation of Chinese airlines ensure large domestic profits, which has enabled numerous routes I consider unlikely to make money.
2. Longer range smaller planes. I predicted fragmentation, but it has exceeded my expectations. I never would have predicted PER-LHR.
3. I missed IST and ADD being so competitive EU to Africa. With high O&D, IST has an advantage.
4. QR... Is competing irrationally. (There should be some due to the blockade. But even without it QR was trying to grow

It is a bummer the airport isn't closer to the Dubai/Abu-Dhabi border. It is too late to make a joint airport (required due to the Federation if Emirates resulting in fragmented bilateral rights). Too much money has been spent on DWC and AUH where there just isn't enough free cash or borrowing ability to really do anything.

Revelation wrote:
Polot wrote:
Moving other airlines to DWC and keeping DXB to EK and FlyDubai is difficult. Most bilaterals require equal access. If Dubai wants to move out the other airlines go ahead, but those airline’s home countries will in turn require EK/FlyDubai’s flights to operate from DWC too.

Indeed, it seems if things don't change for the better DWC will become the "Mirabel of the Middle East", with little more than cargo ops keeping the joint opened.

Considering that EK is opperating perilously close to break even, they will have to shrink:

https://www.emirates.com/english/about- ... rency.aspx

(Download PDF). 2.1% profit by the group, which I speculate is proped up by ground handling, is poor.

EK must subsidize Dubai. Without profits, there is no money to expand DWC.

I wonder if this is Mirabel 2.

EK must:
1. Gain more O&D traffic. That is a slow process based on real economic growth.
2. Reduce unprofitable connections.

The reality is smaller but longer range planes will deprive EK of premium traffic.

I see Dubai air travel shrinking for a long time, not growing. The new IST will be tough to compete with. Yield on connecting passengers will drop. With such low profits (which I do not think are from the airlines), funding DWC isn't plausible.

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Erebus
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Re: Dubai World Central (DWC) expansion officially halted

Sat Aug 31, 2019 2:53 am

Considering all of what's happening with EK, Airbus dodged a bullet cannonball by resisting the temptation to pull the trigger on an A380neo despite several years of insistence on the part of EK.
 
sibibom
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Re: Dubai World Central (DWC) expansion officially halted

Sat Aug 31, 2019 3:19 am

Here is the problem, EK is poised to contract, let alone maintain its current size. A350/A330neo/B787/B777x are all smaller than A380 and B777 (besides the B777x in the case of latter). It's not like they can add more frequency, cos DXB is slot restricted. They have around 256 aircraft and 230 odd on order. However FlyDubai with 64 aircraft has another 230 on order. Something will have to give. Expect cancellations or downsizing of orders.
 
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zeke
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Re: Dubai World Central (DWC) expansion officially halted

Sat Aug 31, 2019 3:22 am

Revelation wrote:
Correct, but a lot of people staying in their hotels, or visiting their shops, or buying seats in premium cabins do depend on oil.


I don't agree with that at all. DXB is like SIN, their hotels and tourism depend heavily on transit PAX.

Revelation wrote:
Clearly the Emir agrees, otherwise he would have no reason to stop building DWC or having his airline cancel the A380s they had on order.

I am not that sure what the connection is between EK and DWC you seem to have. DWC was being built to be a multi modal transport/logistics hub with manufacturing facilities adjoining the airport (they were trying to convince Airbus to setup a FAL there). From DXB, corporate aviation and flydubai was to go thre as well as cargo and EK maintenance. That basically frees up the whole eastern side of the runways at DXB..

However anyone could tell them that moving all cargo there was not a good idea as a lot of cargo still goes under the floor in passenger aircraft..
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william
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Re: Dubai World Central (DWC) expansion officially halted

Sat Aug 31, 2019 4:12 am

Maybe they scale back on the Taj Mahal terminal buildings to impress who knows who. Design and build modern contemporary terminals that do not cost as much as whole airport projects and maybe DWC can still be built out and used.
 
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chunhimlai
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Re: Dubai World Central (DWC) expansion officially halted

Sat Aug 31, 2019 4:48 am

Polot wrote:
Moving other airlines to DWC and keeping DXB to EK and FlyDubai is difficult. Most bilaterals require equal access. If Dubai wants to move out the other airlines go ahead, but those airline’s home countries will in turn require EK/FlyDubai’s flights to operate from DWC too.


How about Sharjah airport?

20km from DXB and plenty of rooms of expansion
 
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Erebus
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Re: Dubai World Central (DWC) expansion officially halted

Sat Aug 31, 2019 4:49 am

william wrote:
Maybe they scale back on the Taj Mahal terminal buildings to impress who knows who.


Regional willy waving contests.
 
SCQ83
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Re: Dubai World Central (DWC) expansion officially halted

Sat Aug 31, 2019 5:07 am

lightsaber wrote:
In my opinion, China has been waging a trade inhibition by strict bilateral allocation. This reduced Chinese tourism and transit growth.

I fully admit I was far more enthusiastic about DWC 5 years ago. What changed:
1. Regulation of Chinese airlines ensure large domestic profits, which has enabled numerous routes I consider unlikely to make money.
2. Longer range smaller planes. I predicted fragmentation, but it has exceeded my expectations. I never would have predicted PER-LHR.
3. I missed IST and ADD being so competitive EU to Africa. With high O&D, IST has an advantage.
4. QR... Is competing irrationally. (There should be some due to the blockade. But even without it QR was trying to grow


Also Air India, the US3 and EU3 have launched new services to Europe and the US. For instance, DEL-SFO on both AI and UA.

Dubai itself as a concept is somehow "passé". Dubai became popular as the most "Westernized" part of the region, so this is where many international companies chose to settle. However Saudi Arabia (the main O&D market in the region) has pushed towards a certain liberalisation that somehow makes Dubai redundant. Saudia should grow further in the future.

Dubai itself (Princess Haya, Latifa) has proven not as Westernised as some people had thought, which is not good advertisement for tourism.
 
luckyone
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Re: Dubai World Central (DWC) expansion officially halted

Sat Aug 31, 2019 5:19 am

SCQ83 wrote:
lightsaber wrote:
In my opinion, China has been waging a trade inhibition by strict bilateral allocation. This reduced Chinese tourism and transit growth.

I fully admit I was far more enthusiastic about DWC 5 years ago. What changed:
1. Regulation of Chinese airlines ensure large domestic profits, which has enabled numerous routes I consider unlikely to make money.
2. Longer range smaller planes. I predicted fragmentation, but it has exceeded my expectations. I never would have predicted PER-LHR.
3. I missed IST and ADD being so competitive EU to Africa. With high O&D, IST has an advantage.
4. QR... Is competing irrationally. (There should be some due to the blockade. But even without it QR was trying to grow


Also Air India, the US3 and EU3 have launched new services to Europe and the US. For instance, DEL-SFO on both AI and UA.

Dubai itself as a concept is somehow "passé". Dubai became popular as the most "Westernized" part of the region, so this is where many international companies chose to settle. However Saudi Arabia (the main O&D market in the region) has pushed towards a certain liberalisation that somehow makes Dubai redundant. Saudia should grow further in the future.

Dubai itself (Princess Haya, Latifa) has proven not as Westernised as some people had thought, which is not good advertisement for tourism.

I’m not disputing the business in the region. Beyond that, and maybe it’s just me, but glitz in the desert is only glamorous for so long before it’s shopping malls and glitzy hotels in the boiling desert heat. Like you said, it does well when it has vices available to those nearby to whom those vices aren’t otherwise available (see Las Vegas), but take away that advantage and/or weaken the economic base, and you’ve got a bunch of cool looking shiny sky scrapers and malls...in the boiling Arabian desert. That certainly loses its luster.
 
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scbriml
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Re: Dubai World Central (DWC) expansion officially halted

Sat Aug 31, 2019 5:26 am

chunhimlai wrote:
Polot wrote:
Moving other airlines to DWC and keeping DXB to EK and FlyDubai is difficult. Most bilaterals require equal access. If Dubai wants to move out the other airlines go ahead, but those airline’s home countries will in turn require EK/FlyDubai’s flights to operate from DWC too.


How about Sharjah airport?

20km from DXB and plenty of rooms of expansion


Sharjah is a separate Emirate. Any expansion there will be organic and not overspill from Dubai or EK.
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JayinKitsap
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Re: Dubai World Central (DWC) expansion officially halted

Sat Aug 31, 2019 6:17 am

zeke wrote:
They need smaller aircraft for their regional routes to replace the older A330/A340s/777s that they have or will soon retire. It is a large jump of conclusion to say the se orders are replacing A380s, when the local economy depends on the numbers those aircraft being in.


A look at EK's own site and Wiki indicate their fleet is just 77L, 77W, and A380 at this time, I recall it has been several years that way.


EK's growth appears to have plateaued over the last few years. They stopped the A380's past what they were obligated for, there are agreements on the A330's and A350's but I haven't seen them in Airbus's O&D lists yet. The 787-10 LOI has not been firmed. Do they feel like they still have too many orders, who really knows but there are hints it is the case.

Yes EK is vital to keeping traffic arriving into Dubai, but can EK grow enough to absorb 50 added widebodies into the current fleet. With just DXB they may need to stay around its current size verses grow.
 
worldranger
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Re: Dubai World Central (DWC) expansion officially halted

Sat Aug 31, 2019 8:45 am

Discussed in the past for DXB, was a short 2200m runway to north of 30R on the Sharjah side - on the road that accesses Air Cargo City.

The traffic road would be tunneled underneath. One would imagine this would be back in play as the cost would be far lower than DWC - yet the slot expansion benefits would be significant.

For the regional heavies and narrow body flying - this size runway would suffice.

Eminent domain faces little hurdles in this part of world once the ‘firm’ decides.
 
VV
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Re: Dubai World Central (DWC) expansion officially halted

Sat Aug 31, 2019 10:09 am

Whoever did the passenger traffic forecast for Dubai obviously screwed up.

I know, I know people would say, "Who could predict the US president would launch a trade war? Who could predict the conflict in Yemen would drag on and on? Who could predict the current tension between Qatar and other middle eastern countries?"


Whatever the reason is the traffic forecast in Dubai has been way too optimistic.
 
myki
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Re: Dubai World Central (DWC) expansion officially halted

Sat Aug 31, 2019 10:11 am

scbriml wrote:
chunhimlai wrote:
Polot wrote:
Moving other airlines to DWC and keeping DXB to EK and FlyDubai is difficult. Most bilaterals require equal access. If Dubai wants to move out the other airlines go ahead, but those airline’s home countries will in turn require EK/FlyDubai’s flights to operate from DWC too.


How about Sharjah airport?

20km from DXB and plenty of rooms of expansion


Sharjah is a separate Emirate. Any expansion there will be organic and not overspill from Dubai or EK.

Yep, generalising here and isn't always the case, but if you travel to/through Sharjah it is predominantly Pakistanis and Indians ... and look at where airarabia focus on. They've got that LCC market sewed up there out of SHJ. You won't be seeing it as Ryanair's new base for flights to SOF, OTP, BEG, AER etc. anytime soon, as that's not where those locals want to go. The market for that is flydubai out of Dubai - whether that stays at DXB or shifts to DWC, who knows.
 
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PW100
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Re: Dubai World Central (DWC) expansion officially halted

Sat Aug 31, 2019 11:48 am

Revelation wrote:
Since the A380s are leased, why pay a high monthly payment for a plane you can't profitably fill, when you can just hand it back to the lessor and bring in a new, smaller, and more efficient 777x/A350/A330 instead?

Perhaps because the lease cost of a brand new 777x/A350/A330 is (much) higher than a twelve year old A380?

Stage length, market size, level of market donination, hub-factors, how many daily banks, how does each destination fit in one or more banks, crew cost per pax etc. Those are critical factors in that sort of decisions, often more important that having nice shiny new more efficient metal.
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PatrickZ80
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Re: Dubai World Central (DWC) expansion officially halted

Sat Aug 31, 2019 12:08 pm

thekorean wrote:
Polot wrote:
Moving other airlines to DWC and keeping DXB to EK and FlyDubai is difficult. Most bilaterals require equal access. If Dubai wants to move out the other airlines go ahead, but those airline’s home countries will in turn require EK/FlyDubai’s flights to operate from DWC too.

Maybe they can incentivize low cost airlines to move with lower landing fees?


That would be my idea, make World Central a low-cost airport next to the primary Dubai airport. Wizzair and TUI already use this airport as their gateway to Dubai.

However then they'd compete with Sharjah airport which is already a low-cost airport and the home base of Air Arabia. Despite being in a different emirate, both airports essentially serve the same catchment area. Many people wouldn't mind using Sharjah to get to Dubai if the price was right.

To make World Central a low-cost airport, they'd have to think differently. The originally planned World Central looked as fancy as could be, which isn't good for a low-cost airport. All that money being wasted on fancy terminals could be better spent on lower airfares. Sure they can build a cheap terminal without airbridges and use that for the LCCs. It doesn't have to look fancy, it just has to do it's job.
 
VSMUT
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Re: Dubai World Central (DWC) expansion officially halted

Sat Aug 31, 2019 12:21 pm

PatrickZ80 wrote:
To make World Central a low-cost airport, they'd have to think differently. The originally planned World Central looked as fancy as could be, which isn't good for a low-cost airport. All that money being wasted on fancy terminals could be better spent on lower airfares. Sure they can build a cheap terminal without airbridges and use that for the LCCs. It doesn't have to look fancy, it just has to do it's job.


No airbridge? In Dubai? Are you sure? The temperatures in the summer are murderous. No airbridge means sending passengers over 45 degree ramps and leaving cabin doors open.
 
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Aquila3
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Re: Dubai World Central (DWC) expansion officially halted

Sat Aug 31, 2019 12:46 pm

VSMUT wrote:
PatrickZ80 wrote:
To make World Central a low-cost airport, they'd have to think differently. The originally planned World Central looked as fancy as could be, which isn't good for a low-cost airport. All that money being wasted on fancy terminals could be better spent on lower airfares. Sure they can build a cheap terminal without airbridges and use that for the LCCs. It doesn't have to look fancy, it just has to do it's job.


No airbridge? In Dubai? Are you sure? The temperatures in the summer are murderous. No airbridge means sending passengers over 45 degree ramps and leaving cabin doors open.

EK does this everyday.
Or better everynight.
Just try to get the flight to/from Lahore. Even arriving in the morning it is not that bad. What is bad is the hour you spend on that bus, advancing palm by palm in traffic jam that is DXB
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PatrickZ80
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Re: Dubai World Central (DWC) expansion officially halted

Sat Aug 31, 2019 12:47 pm

VSMUT wrote:
PatrickZ80 wrote:
To make World Central a low-cost airport, they'd have to think differently. The originally planned World Central looked as fancy as could be, which isn't good for a low-cost airport. All that money being wasted on fancy terminals could be better spent on lower airfares. Sure they can build a cheap terminal without airbridges and use that for the LCCs. It doesn't have to look fancy, it just has to do it's job.


No airbridge? In Dubai? Are you sure? The temperatures in the summer are murderous. No airbridge means sending passengers over 45 degree ramps and leaving cabin doors open.


Sure, but the ULCCs won't care about that. Using airbridges costs more money than using airstairs, so they'll prefer airstairs instead.

And sooner or later the passengers will have to go out into the heat anyway. What's the problem with having them walk from the plane to the terminal in that same heat? In many European airports ULCCs don't use airbridges either, passengers have to walk through the pouring rain or freezing cold to get to the plane. Nobody complains, because it's cheap.

By the way, Sharjah doesn't have airbridges either and the temperatures there aren't any different.
 
THS214
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Re: Dubai World Central (DWC) expansion officially halted

Sat Aug 31, 2019 1:42 pm

VV wrote:
Whoever did the passenger traffic forecast for Dubai obviously screwed up.

I know, I know people would say, "Who could predict the US president would launch a trade war? Who could predict the conflict in Yemen would drag on and on? Who could predict the current tension between Qatar and other middle eastern countries?"


Whatever the reason is the traffic forecast in Dubai has been way too optimistic.


Few years ago Dubai was broke. That's when building DWC stopped. They don't have the money to build DWC. If they have / had the money DWC would be ready by now and all the traffic would be there. Has nothing to do with traffic forecast.
 
konkret
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Re: Dubai World Central (DWC) expansion officially halted

Sat Aug 31, 2019 2:28 pm

Pobeda is starting service to DXB. I found it pretty surprising it’s not DWC since Pobeda often serves secondary airports, and its parent Aeroflot is present at both airports.
 
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lightsaber
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Re: Dubai World Central (DWC) expansion officially halted

Sat Aug 31, 2019 3:15 pm

THS214 wrote:
VV wrote:
Whoever did the passenger traffic forecast for Dubai obviously screwed up.

I know, I know people would say, "Who could predict the US president would launch a trade war? Who could predict the conflict in Yemen would drag on and on? Who could predict the current tension between Qatar and other middle eastern countries?"


Whatever the reason is the traffic forecast in Dubai has been way too optimistic.


Few years ago Dubai was broke. That's when building DWC stopped. They don't have the money to build DWC. If they have / had the money DWC would be ready by now and all the traffic would be there. Has nothing to do with traffic forecast.

I'm going to disagree on the traffic being there.

As others have noted, premium traffic is bypassing EK. The group profits are at only 2.1% (I earlier provided a link to the annual report).

TK/ISK and ET/ADD are now syphoning off traffic. The Chinese airlines are bypassing them. Someone else noted how DEL-SFO are reducing connections (in particular higher yield traffic).

Airlines need high yield traffic. Longer range smaller aircraft with excellent economics allows DXB to be bypassed. I used the example of PER-LHR. Those planes are going out full (on a yield management bases, not load factor) and have sucked away the top fares on PER-LHR and MEL-LHR. I expect project sunrise to happen and shift SYD-LHR away from the QF/EK joint venture.

Dubai is going to have to increase yield. That means shifting away from low yield connecting traffic. To be blunt, IST holds the regional cards today. They have the room and O&D traffic to expand. Because EK is majority connecting, that means down gauging.

As one poster noted above, Airbus dodged a cannonball by not investing in an A388NEO for one customer.

I fully expect at the Dubai airshow major strategy shift to smaller aircraft. I expect 779 orders to go to either A35K or even A359/787-10. The A339 LOI facinates me. For if it goes through, that is a clear downgauge. I wouldn't be surprised to see 77W routes go to A359s too.

Lightsaber
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Revelation
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Re: Dubai World Central (DWC) expansion officially halted

Sat Aug 31, 2019 3:19 pm

lightsaber wrote:
EK must subsidize Dubai. Without profits, there is no money to expand DWC.

Yes, everything tracks back to that. EK had its worst profit in a decade last year. This year we see A380 orders cancelled and DWC funding frozen.

luckyone wrote:
SCQ83 wrote:
Also Air India, the US3 and EU3 have launched new services to Europe and the US. For instance, DEL-SFO on both AI and UA.

Dubai itself as a concept is somehow "passé". Dubai became popular as the most "Westernized" part of the region, so this is where many international companies chose to settle. However Saudi Arabia (the main O&D market in the region) has pushed towards a certain liberalisation that somehow makes Dubai redundant. Saudia should grow further in the future.

Dubai itself (Princess Haya, Latifa) has proven not as Westernised as some people had thought, which is not good advertisement for tourism.

I’m not disputing the business in the region. Beyond that, and maybe it’s just me, but glitz in the desert is only glamorous for so long before it’s shopping malls and glitzy hotels in the boiling desert heat. Like you said, it does well when it has vices available to those nearby to whom those vices aren’t otherwise available (see Las Vegas), but take away that advantage and/or weaken the economic base, and you’ve got a bunch of cool looking shiny sky scrapers and malls...in the boiling Arabian desert. That certainly loses its luster.

It's pretty clear EK also has been benefiting from the glitz/glamour buzz for many years now, but trendiness is just that, a trend.

It's my understanding that those seeking out a more tolerant environment largely tend to be oil men, or people who make their living by catering to oil men.

When the price of oil is down the parties tend to move closer to home.

zeke wrote:
Revelation wrote:
Clearly the Emir agrees, otherwise he would have no reason to stop building DWC or having his airline cancel the A380s they had on order.

I am not that sure what the connection is between EK and DWC you seem to have. DWC was being built to be a multi modal transport/logistics hub with manufacturing facilities adjoining the airport (they were trying to convince Airbus to setup a FAL there). From DXB, corporate aviation and flydubai was to go thre as well as cargo and EK maintenance. That basically frees up the whole eastern side of the runways at DXB..

My connection is that DWC was to be all that, plus handle 160M (Phase 1) to 260M (Phase 2) passengers per year:

The airport will be the largest component of Dubai World Central, with a surface area of more than 280 square kilometres (110 sq mi). If completed as planned, the airport will have an annual cargo capacity of 12 million tonnes (12,000,000 long tons; 13,000,000 short tons), and a passenger capacity of 160 to 260 million people per year. In the future it will handle 851 million passengers[dubious – discuss] This would make it the largest airport in the world in both physical size and passenger volume.[19][20]

Al Maktoum International Airport intends to handle all types of aircraft.[21] Up to four aircraft will be able to land simultaneously.

The airport will include:
  • Three passenger terminals, including two luxury facilities; one dedicated to Emirates, the second to other carriers, and the third dedicated to low-cost carriers
  • Multiple concourses
  • Executive and royal jet centres
  • Hotels and shopping malls
  • Support and maintenance facilities: the region's only hub for A-, B-, and C-checks on all aircraft up to A380 specifications

Ref: https://en.wikipedia.org/wiki/Al_Maktou ... al_Airport

Phase 1 had already been kicked down the road from 2025 to 2030 a year or so ago, and now it's been kicked down the road for some unforeseeable time.

VV wrote:
Whoever did the passenger traffic forecast for Dubai obviously screwed up.

I know, I know people would say, "Who could predict the US president would launch a trade war? Who could predict the conflict in Yemen would drag on and on? Who could predict the current tension between Qatar and other middle eastern countries?"

Whatever the reason is the traffic forecast in Dubai has been way too optimistic.

It was following quite a great trend line, but the trend has plateaued.

To put the numbers into context,

1. ATL 107,394,029
2. PEK 100,983,290
3. DXB 89,149,387
4. LAX 87,534,384

Ref: https://en.wikipedia.org/wiki/List_of_b ... statistics

DWC was aiming for 160M pax/year in Phase 1 and 260M in Phase 2.

This is +77% growth relative to DXB's current numbers in Phase One and 188% growth in Phase Two.

They have had astonishing growth and have put themselves on an astonishing trend line for the last 12-20 years or so, but the actions of cancelling A380s and freezing DWC are solid indicators that the growth has stopped and now it's time to consolidate their gains.

The difficult part is the Emirates itself has been built on the assumption of that trend line continuing, but the market fundamentals have changed.

This is how you end up with the "Mirabel of the Middle East" in the desert sands on the edge of town.
Wake up to find out that you are the eyes of the world
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THS214
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Re: Dubai World Central (DWC) expansion officially halted

Sat Aug 31, 2019 3:52 pm

lightsaber wrote:
THS214 wrote:
VV wrote:
Whoever did the passenger traffic forecast for Dubai obviously screwed up.

I know, I know people would say, "Who could predict the US president would launch a trade war? Who could predict the conflict in Yemen would drag on and on? Who could predict the current tension between Qatar and other middle eastern countries?"


Whatever the reason is the traffic forecast in Dubai has been way too optimistic.


Few years ago Dubai was broke. That's when building DWC stopped. They don't have the money to build DWC. If they have / had the money DWC would be ready by now and all the traffic would be there. Has nothing to do with traffic forecast.

I'm going to disagree on the traffic being there.

As others have noted, premium traffic is bypassing EK. The group profits are at only 2.1% (I earlier provided a link to the annual report).

TK/ISK and ET/ADD are now syphoning off traffic. The Chinese airlines are bypassing them. Someone else noted how DEL-SFO are reducing connections (in particular higher yield traffic).

Airlines need high yield traffic. Longer range smaller aircraft with excellent economics allows DXB to be bypassed. I used the example of PER-LHR. Those planes are going out full (on a yield management bases, not load factor) and have sucked away the top fares on PER-LHR and MEL-LHR. I expect project sunrise to happen and shift SYD-LHR away from the QF/EK joint venture.

Dubai is going to have to increase yield. That means shifting away from low yield connecting traffic. To be blunt, IST holds the regional cards today. They have the room and O&D traffic to expand. Because EK is majority connecting, that means down gauging.

As one poster noted above, Airbus dodged a cannonball by not investing in an A388NEO for one customer.

I fully expect at the Dubai airshow major strategy shift to smaller aircraft. I expect 779 orders to go to either A35K or even A359/787-10. The A339 LOI facinates me. For if it goes through, that is a clear downgauge. I wouldn't be surprised to see 77W routes go to A359s too.

Lightsaber


You look things like this was planned. If it was so, then I agree with you. If DWC would have been built in time as planned, things would be different. Major part of competitors were able to expand because Emirates was not. You expect move to smaller aircraft. If DWC would be what it was supposed, Emirates would be flying also smaller planes, maybe even narrow bodies (excluding Flydubai).

Current Emirates is nothing what it would have been without Dubai monetary problems.

Emirates was never a first class airline except economy (not anymore). Their first and business was mediocre that people were ready to pay so they were able to say that they flew a premium class. That was a major part of their business plan. I think that would have continued as much as possible (like their current business class). Emirates first class was not on par with many other airlines business class until recently but it sold well.

So, there is a big difference of Emirates based on DWC current state and what it could be.

Current Emirates is like Etihad. No future.
 
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Revelation
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Re: Dubai World Central (DWC) expansion officially halted

Sat Aug 31, 2019 4:30 pm

PW100 wrote:
Revelation wrote:
Since the A380s are leased, why pay a high monthly payment for a plane you can't profitably fill, when you can just hand it back to the lessor and bring in a new, smaller, and more efficient 777x/A350/A330 instead?

Perhaps because the lease cost of a brand new 777x/A350/A330 is (much) higher than a twelve year old A380?

Stage length, market size, level of market donination, hub-factors, how many daily banks, how does each destination fit in one or more banks, crew cost per pax etc. Those are critical factors in that sort of decisions, often more important that having nice shiny new more efficient metal.

Right, and all those things provide us the yield curve, one that EK says it can no longer make work on new routes.

Keeping old A380s while still taking on even more that you already have committed to pushes you further away from right sizing the airline.

EK has set itself up so that it does not suffer the cost and down time of heavy checks, keeping old A380s that are going to get more costly to maintain after the production line stops making parts whilst competitors fly more efficient and right sized models is not a place where EK wants to be.

EK has been doing a major strategic review ( https://www.bloomberg.com/news/articles ... superjumbo ) that has triggered the purchase of newer, smaller and more efficient aircraft, without any suggestion of keeping older A380s.

The A380's time has passed except for a few major trunk routes.

THS214 wrote:
Current Emirates is nothing what it would have been without Dubai monetary problems.

Current EK is nothing if it wasn't for decades of growth, but that growth has stopped because of market changes and because supply has met demand.
Wake up to find out that you are the eyes of the world
The heart has its beaches, its homeland and thoughts of its own
Wake now, discover that you are the song that the morning brings
The heart has its seasons, its evenings and songs of its own
 
musman9853
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Re: Dubai World Central (DWC) expansion officially halted

Sat Aug 31, 2019 4:55 pm

DWC wrote:
moa999 wrote:
Local economy depends on oil.. at least until it runs out.

That's a myth : the tiny emirate of Dubai does not produce oil.
It may refine some, but the big oil player in the UAE is Abu Dhabi.
Dubai is all about services, particularly finance & tourism.


im not entirely familiar with the UAE's operating structure but oil profits do go to all the emirates right? my understanding is, from people i know in sharjah, is that oil revenue does pay for infrastructure etc across the UAE, no?
Welcome to the City Beautiful.
 
musman9853
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Re: Dubai World Central (DWC) expansion officially halted

Sat Aug 31, 2019 4:58 pm

VSMUT wrote:
PatrickZ80 wrote:
To make World Central a low-cost airport, they'd have to think differently. The originally planned World Central looked as fancy as could be, which isn't good for a low-cost airport. All that money being wasted on fancy terminals could be better spent on lower airfares. Sure they can build a cheap terminal without airbridges and use that for the LCCs. It doesn't have to look fancy, it just has to do it's job.


No airbridge? In Dubai? Are you sure? The temperatures in the summer are murderous. No airbridge means sending passengers over 45 degree ramps and leaving cabin doors open.



it's already like this for dxb. i was at dxb coming through on flydubai a few weeks ago. we parked at a remote gate and took a bus in.
Welcome to the City Beautiful.
 
THS214
Posts: 231
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Re: Dubai World Central (DWC) expansion officially halted

Sat Aug 31, 2019 5:01 pm

THS214 wrote:
Current Emirates is nothing what it would have been without Dubai monetary problems.

Current EK is nothing if it wasn't for decades of growth, but that growth has stopped because of market changes and because supply has met demand.[/quote]

True but that growth would not have stopped if there were room for it. Market and supply have moved because Emirates was not able to grow (more routes, smaller planes etc.). In aviation supply and demand is more or less constant. Only time and economy (also lower costs etc.) makes changes in a bigger picture. Unlimited growth possibilities for Emirates would have made a huge difference. Turkish would not be anywhere where it is today if Emirates would have been able to grow like it needed. You don't use these airlines to fly from Madrid to Paris. They have a lot of same clientele for example from London to Bangkok.

Now I am not a friend of Emirates or British Airways premium cabins but there is clearly a demand for them. Of course BA Has "monopoly" but the more money you make without spending means profit.
 
peterinlisbon
Posts: 1521
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Re: Dubai World Central (DWC) expansion officially halted

Sat Aug 31, 2019 7:11 pm

Maybe the money they were going to waste on DWC could be better spent improving Dubai Intl. There is demand for increased capacity there.

If they can agree with Sharjah, why not extend the metro to there as well.

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