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Tony Douglas

UAE, ABU DHABI - Transport

Complementary Hubs

CEO, Abu Dhabi Airports Company (ADAC)

Bio

Tony Douglas joined Abu Dhabi Airports Company (ADAC) on March 1, 2013 after having completed Khalifa Port and Industrial Zone (KIPZ) on schedule and below budget as the CEO of Abu Dhabi Ports Company (ADPC). Prior to coming to the UAE, he was COO and Group Chief Executive designate for Laing O’Rourke. He has also held a number of senior executive positions with BAA, the UK’s leading airport infrastructure operator, culminating with his appointment as Chief Executive in charge of Heathrow.

"Emirates has been a game changer over the last 14 years."

How will the establishment of the Abu Dhabi Airport Free Zone strengthen the Emirate as an international business hub?

The free zone is an opportunity to connect organizations that are linked with aviation directly, and there are a number of obvious examples. Cargo has a direct correlation in terms of growth in passenger numbers because suitcases take a fraction of the available space in the cargo hold, and the rest is filled with commercial cargo, as well as dedicated freighters that fly cargo only. As this airport grows as a global hub, so does the cargo component, adding significant business value. The free zone has been deliberately created for businesses that connect freight from one place to many others.

Abu Dhabi Airport passenger numbers have increased from 5 million to 16.5 million in a few years. What noticeable trends are emerging?

The large number of dominant markets is a function of population, the expatriate profile, and Etihad Airways. In terms of the markets for us, number one is India, and interestingly number two is Germany, which came as a bit of a surprise. Etihad has a stake in Air Berlin, and that changed all of the dynamics in terms of the way in which Abu Dhabi is connected as a regional hub. We have a number of very popular routes to India, Germany, Thailand, the Philippines, and the UK. The catalyst in many respects is the economic and understandably strategic Vision 2030. Growth has also been driven heavily by Etihad, a company that has exhibited a stunning performance in recent years.

What potential is there for the growth and development of Al Ain International Airport?

Al Ain is the largest inland city in the UAE, Abu Dhabi being the largest Emirate, and we operate that airport with a number of very important strategic partners who have four airlines operating on a commercial basis. Al Ain is designed to be the aerospace cluster. At the moment, the primary businesses working with us there are government based—one is Strata, an aero-structure manufacturer. The growth of such businesses will be a significant contributing factor for Al Ain International Airport. In terms of the commercial side of it, it is fair to say that we would probably see more flights to Al Ain International Airport if Etihad had more aircraft. In summary, Al Ain International Airport is a key strategic asset, it serves the important community of Abu Dhabi and Al Ain, and it will almost certainly grow commercially. However, it is unlikely that Al Ain will emerge as a major international hub.

“Emirates has been a game changer over the last 14 years.”

How do you compete in this competitive environment?

Emirates has been a game changer over the last 14 years, and the company has almost redefined what big fleets and mainline airlines look like in this day and age and raised the bar in terms of quality. Etihad, while it is a younger and smaller airline, has arguably the same or perhaps a slightly superior quality on offer and its growth has been remarkable. As a result of that, airlines have strived for quality. For people in the discerning middle classes with disposable incomes, quality is always going to be a winning ticket. Emirates has enjoyed the benefit of using Dubai as a destination that has continued to evolve over the past 14 years. Now, people almost describe Dubai as one of the top-five cities in the world, which is not surprising. However, if Dubai is New York, Abu Dhabi is similar to Washington. This is the capital city and a different level of commerce comes with that. That has been one of the many factors that has stimulated remarkable growth here in Abu Dhabi.

What role can ADAC play in attracting more tourists to Abu Dhabi?

We are an airport-operating company that is focused on infrastructure. Obviously, the airlines decide where to fly, and for both Etihad and Emirates, a significant part of the business proposition is connectivity. Considering the broader Abu Dhabi Vision 2030, making the UAE a tourism destination is a key part of the plan. The work taking place at Saadiyat Island is a good example of a destination proposition for Abu Dhabi. Now, passengers flying from Frankfurt to Sydney and connecting via Abu Dhabi may choose a three-day stopover here because there is a leisure attraction. Stopover tourists can watch a Grand Prix, play golf on Saadiyat, or enjoy our beaches. However, in terms of the airport operator ADAC, it is how we implement and market the airport infrastructure—there would be no Saadiyat Island without access to global transport. This is all part of the wisdom of strategy 2030. It is all pieces of a puzzle that fit together, and there is a picture on the outside of the box to use as a reference.

In the coming years, Dubai’s airports will be some of the busiest in the world. What impact will that have on Abu Dhabi?

It is difficult to say, but I believe that it’s logical to believe that when an airport’s capacity is restrained, there is often a trickle effect. Changes in capacity are in the pipeline, such as Al Maktoum International Airport, and we may see the trickle effect start to reverse. However, it comes down to which airlines are serving which airport, and which destinations those airlines are serving. To answer your question, we would almost need to make a map of the routes—Emirates versus Etihad—to identify the extremely popular routes and focus on that. At the same time, if we examine the niche strategy, the two airports are very different, and thus I do not believe that there is any evidence to suggest that Dubai’s growth would damage us. I simply cannot imagine any downside that could come about.

© The Business Year – September 2013

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