UAE. Last month’s creation of a new corporation to run airports in the emirate of Abu Dhabi is set to have major repercussions for the aviation sector – and travel retail – in the region.
In March the government created two new corporations to take operational responsibility for Abu Dhabi seaports and airports, called the Abu Dhabi Ports Company and Abu Dhabi Airports Company, respectively. The creation of the separate corporations is intended to allow the government to focus more on sector planning and regulation while encouraging the participation of the private sector.
Noted one leading supplier to duty free in the region: “It was a matter of time before privatization became more of a phenomenon in the Gulf region. There is huge investment going on across the Middle East and it all has to be paid for. Every airport here is watching this.”
The privatization development follows news last September that the Civil Aviation Authority of Singapore’s (CAAS) subsidiary Changi Airport Managers and Partners Singapore (CHAMPS) was poised to bid to operate Abu Dhabi International Airport. The state-owned UAE airport, spurred by the extraordinary impact on passenger numbers of new national carrier Etihad Airways, is undergoing a US$6.8 billion redevelopment that is due to be completed in 2010.
At that time Citigroup was advising the Emirate on options for partly privatising the airport and on debt financing.
Now, Abu Dhabi Airports Company has been established with a paid up capital of AED500 million (US$136 million), divided into 50 million shares. The company is mandated to operate and maintain all airports facilities and services including retail and catering, as well as passenger check-in, baggage loading, airfield services, retail, catering and other services.
Abu Dhabi Catering & Duty Free had no comment to make on how its operations would be affected though for now it is very much business as usual for the acclaimed travel retail to catering organization. But effectively it will operate solely under the new organisation in future.
The new company is responsible for operating all airports within the emirate as well as expanding aviation infrastructure to meet Abu Dhabi’s rapid development plans.
“Abu Dhabi has witnessed phenomenal growth in the last few years in all sectors,” said Khalifa Mohammed Al Mazrouie, Chairman and Managing Director, Abu Dhabi Airports Company, after the announcement was made last month.
“This highlights the importance of privatisation to meet the Government of Abu Dhabi’s requirements. It is our role to ensure the high quality of service and infrastructure to meet the demands of the business community and the general population. Abu Dhabi government recognises that it needs the involvement of the private sector in the economic development process.”
The new company will undertake significant ongoing research to assess the requirements of the Emirate’s airports in order to develop short, medium and long-term strategic plans.
