$104b investment on cards for Gulf's Airports

DUBAI — Passenger capacity of the world’s three fastest growing airlines — Emirates, Qatar Airways, and Etihad — is on pace to quadruple to 200 million passengers by 2020, warranting GCC governments to spend a total of $104 billion for airport expansion over the next few years, a latest aviation industry forecast said.

The three legacy carriers, currently growing at phenomenal pace, have grown into global airlines and are instrumental in boosting capacities at their home airports apart from contributing immensely to the region’s economic growth, the Kuwait Financial Centre, or Markaz, said.

The “explosive growth” in passenger traffic triggered by these airlines has necessitated the large-scale expansion of existing facilities, the report noted. “By 2015, Dubai, Doha, and Abu Dhabi international airports will have a combined annual capacity of 190 million passengers,” Markaz said in an updated version of its GCC infrastructure series that also covers airports. “With 48 million passengers in 2010, Dubai is now the world’s fifth largest airport. However, Abu Dhabi and Qatar also aim to attain a hub status for the region,” it noted.

To cope with the projected surge in passenger traffic, GCC governments have boosted investment in building new airports and upgrading existing facilities. “These investments are in the neighbourhood of $104 billion over the coming few years, concentrated primarily in the UAE. The majority of which is for the Al Maktoum Airport with an estimated cost of $50 billion.”

The new GCC mega airports will dwarf European airports and support both their airlines and country’s economic development, Markaz said.

Currently, there are 37 main civil airports in the GCC. Of these, more than 30 are in Saudi Arabia and the UAE. Saudi Arabia has four international airports and 22 domestic airports.

“The UAE, in particular, has aggressively pursued this model over the last decade and consequently rapidly climbed up in international rankings; with 48 million passengers in 2010, Dubai International is now the world’s fifth largest airport. However, Abu Dhabi and Qatar also aim to attain a hub status for the region,” Markaz said. Dubai’s new five-runway airport — Al Maktoum International Airport — will be able to handle 70 million passengers. “This is gigantic considering that the population consists of only a few million, including guest workers. The target market is clearly the global citizen. Dubai Airport has doubled in size every few years. Abu Dhabi and Qatar are following suit,” it said.

Passenger traffic in the GCC, which is now a transit point of millions of passengers, has grown at a compounded annual growth rate of 10 per cent between 2002 and 2010 — significantly higher than the global traffic growth in the same period which was between one and three per cent.

The report suggests that passenger traffic at Dubai has now overtaken Saudi Arabia, despite the acute financial crisis in Dubai. “This shows that the business of air travel in Dubai is both successful and very resilient.”

Cargo volume at Dubai is now in a league of its own. Dubai handled double the cargo volume of any other GCC airport in 2002. At present, the cargo volume has increased five-fold. In 2010, Dubai alone handled more cargo than all the other GCC airports combined.

In its recent forecast, Boeing predicted that Middle Eastern airlines would require 2,340 aircraft by 2029 with a total value of $390 billion as the regional industry expands, Airbus also forecast that by 2028, the Middle East fleet would triple in size.

Boeing also estimates that the regional aviation industry will grow at 7.1 per cent a year for the next 20 years.

The geniuses we’ll never know

This essay is not about Steve Jobs. It is about the countless individuals with roughly the same combination of talents of whom we’ve never heard and never will.

Most of the 106 billion people who’ve ever lived are dead—around 94 per cent  of them. And most of those dead people were Asian—probably more than 60 per cent. And most of those dead Asians were dirt poor. Born into illiterate peasant families enslaved by subsistence agriculture under some or other form of hierarchical government, the Steves of the past never stood a chance.

Chances are, those other Steves didn’t make it into their 30s, never mind their mid-50s. An appalling number died in childhood, killed off by afflictions far easier to treat than pancreatic cancer. The ones who made it to adulthood didn’t have the option to drop out of college because they never went to college. Even the tiny number of Steves who had the good fortune to rise to the top of premodern societies wasted their entire lives doing calligraphy (which he briefly dabbled in at Reed College). Those who sought to innovate were more likely to be punished than rewarded.

Today, according to estimates by Credit Suisse, there is approximately $195 trillion of wealth in the world. Most of it was made quite recently, in the wake of those great political and economic revolutions of the late 18^th century, which, for the first time in human history, put a real premium on innovation. And most of it is owned by Westerners—Europeans and inhabitants of the New World and Antipodes inhabited by their descendants. We may account for less than a fifth of humanity, but we Westerners still own two thirds of global wealth.

A nontrivial portion of that wealth ($6.7 billion) belonged to Steve Jobs and now belongs to his heirs. In that respect, Jobs personified the rising inequality that is one of the striking characteristics of his lifetime. Back in 1955 the top 1 per cent of Americans earned 9 per cent of income. Today the figure is above 14 per cent.

Yet there is no crowd of young people rampaging through Palo Alto threatening to “Occupy Silicon Valley.” The huge amounts of money made by Jobs and his fellow pioneers of personal computing are not resented the way the vampire squids of Wall Street are. On the contrary, Jobs is revered. One eminent hedge-fund manager (who probably holds a healthy slice of Apple stock as well as the full array of iGadgets) recently likened him to Leonardo da Vinci. So the question is not, how do we produce more Steves? The normal process of human reproduction will ensure a steady supply of what Malcolm Gladwell has called “outliers.” The question should be, how do we ensure that the next Steve Jobs fulfills his potential?

An adopted child, the biological son of a Syrian Muslim immigrant, a college dropout, a hippie who briefly converted to Buddhism —Jobs was the type of guy no sane human resources department would have hired. I doubt that Apple itself would hire someone with his résumé at age 20. The only chance he ever had to become a chief executive officer was by founding his own company.

And that—China, please note—is why capitalism needs to be embedded in a truly free society in order to flourish. In a free society a weirdo can do his own thing. In a free society he can even fail at his own thing, as Jobs undoubtedly did in his first stint in charge of Apple. And in a free society he can bounce back and revolutionise all our lives. Somewhere in his father’s native Syria another Steve Jobs has just died. But this other Steve was gunned down by a tyrannical government.  And what wonders 
his genius might have produced we shall never know.

Niall Ferguson is a professor of history at Harvard University and a professor of business administration at Harvard Business School. He is also a senior research fellow at Jesus College, Oxford University, and a senior fellow at the Hoover Institution, Stanford University
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