Through Thick & Thin

While the route network of Abu Dhabi Airport – dominated by home carrier Etihad Airways – covers a fair chunk of the major markets, Thompson says these new narrowbodies will offer the right economics to give airlines the confidence to open up some of those thinner routes.

Thompson, who has been in the role since August 2018, notes aircraft such as the Airbus A321LR and A321XLR, as well as the currently grounded Boeing 737 MAX family, are more than capable of reaching the 75 per cent of the world’s population that sits within a six-hour flying radius of Abu Dhabi.

“So those single-aisle aircraft with that longer range can do wonders in our region,” Thompson told reporters on the sidelines of the World Routes conference in Adelaide in late September.

“You can do quick connections, quick turnarounds, so the aircraft is airborne 15 hours a day.

“It makes sense, particularly where we are. We’ve got India, we’ve got China, all of it within six to nine hours.”

In the early part of the decade, when Etihad was led by Australian chief executive James Hogan, the airport’s growth was in lock-step with the airline’s rapid expansion as a hub carrier.

It was amid those heady days of high double digit annual increases in passenger numbers that the decision was made to build a new midfield terminal, which would increase capacity by an additional 45 million passengers a year.

This would have more than doubled Abu Dhabi’s existing capacity, given the current three terminals had the ability to handle 30 million passengers per annum.

However, the growth tap has been turned off at Etihad, which has undergone a period of reorganisation and a shift in approach under new chief executive Tony Douglas.

Since taking the reins in January 2018, Douglas has deferred aircraft orders, cut routes and reviewed its equity investments in other carriers in an effort to stem losses and return to profitability.

The task is a significant one – in March 2019, Etihad Airways reported a third consecutive annual loss in excess of US$1 billion.

And there are indications of an improving bottom line. The US$1.28 billion loss for calendar 2018 was a 15 per cent improvement from an annual loss of US$1.52 billion, which in turn was better than a US$1.87 billion loss in calendar 2016.

Thompson said the growth projections for the airport at the time the midfield terminal was designed were about 23 per cent higher than current growth forecasts.

Also, the emphasis was now on both connecting passengers as well as origin-and-destination (O&D) passengers.

However, Thompson said the changed outlook had not prompted any alterations to the project, which in addition to the 720,000 square metre terminal with 49 aircraft gates also included some 1.5 million square metres of apron, a new runway and tunnels that link the old and new facility.

“The formation of the network was slightly different. Because they were a hub carrier there was a lot more transfer traffic,” Thompson said of Etihad’s previous strategy.

“So the terminal was actually designed around transfer flows, predominantly around transfer flows. But it’s such a flexible design.”

“Without giving too much away, when you come and have a look at it one day you will see what it is. It’s really open so it’s very intuitive both for O&D type flows or transfer flows.

“We’ve had to do no changes to the inside of the building. It all works really well.

“What we are looking at now is how to create products, so segmentation of products that everybody can use whether they are transferring or O&D type.”

Currently, Abu Dhabi Airports has service from 25 airlines flying to 87 destinations, according to figures from the airport’s website.

By contrast, figures from their respective websites showed Dubai International Airport, about 130km north along the E11 highway, had about 70 airlines operating to 214 cities, while Singapore Changi Airport had more than 100 airlines serving about 400 cities.

Concepts for the terminal are now close to reality.
ABU DHABI AIRPORTS CORPORATION

It makes sense, particularly where we are. We’ve got India, we’ve got China, all of it within six to nine hours

Thompson, whose career has included working at Dubai Airports, Launceston Airport, Melbourne Airport, Mumbai and Johannesburg International Airports, said Abu Dhabi was hopeful of attracting new foreign carriers as awareness of the city’s attractions beyond the desert sands grew.

“Historically, because Etihad picked up all the routes, they took everything, thick or thin,” Thompson said. “They are a lot more discerning now.”

“The thinner routes can survive with an airline from wherever that airline is coming from on a smaller airframe, single-aisle.”

“It couldn’t support necessarily a widebody twin-aisle type operation, so what we are looking for is looking at where the networks exist, where we know that there is density that can support operations.

“We work together with Etihad, obviously understanding what their network needs look like and what they are looking at. And then we almost go out to these tier one, tier two airlines and say ‘we know that there is a market’ and we start attracting those services.”

The airport, as well as government and tourism bodies had a stand at World Routes keen to tell all in attendance of Abu Dhabi’s attractions, such as the beach, culture, natural beauty, motor racing and shopping.

“Abu Dhabi is a destination on its own,” Thompson said.

“We want people to stop off and explore Abu Dhabi because it’s got a lot to offer. It’s not just deserts, dates, camels.

“Modern Abu Dhabi is a modern metropolis of modern technology.

“We are trying to make the rest of the world see that.”

Thompson paid tribute to Etihad’s management team for its efforts on the transformation of the UAE national carrier, adding that the airport worked closely with the airline to ensure the right infrastructure was in place to support its strategy.

“Etihad has reinvented themselves. They’ve got a strategy which is more grounded in point-to-point type traffic so they are looking for thicker point-to-point routes and they are not chasing top-line growth just for the purpose of growth,” Thompson said.

“They are looking at long-term sustainable routes and much more conscious of the bottom line.

The airport has remained tight-lipped about a firm opening date for the new midfield terminal, which had previously been slated to commence operations in 2017 before the timeline was pushed back two years to the end of 2019.

Currently, Abu Dhabi Airports has service from 25 airlines flying to 87 destinations