Will Bahrain Airport's niche market strategy pay off?
The airport is expanding capacity by 10 million passengers a year to 14 million by 2020 at cost of $1.1 billion. (File photo)
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Bahrain International Airport sees its future in origin and destination traffic and not along the east and west transcontinental routes that Dubai, Doha and Abu Dhabi have built their hubs on.
Once the region’s main airport, Bahrain has failed to keep up with the rapid growth of its Gulf neighbours, who are home to some of the world’s fastest-growing airlines. In 2015, Bahrain handled 8.6 million passengers compared to 78 million at Dubai International, the region’s biggest, 30 million at Qatar’s Hamed International and 23 million at Abu Dhabi International.
“The strategy with Bahrain International Airport and the national carrier is to go after O&D (origin and destination). O&D is what contributes to the country’s tourism,” airport chief commercial officer, Mohammad Khalil, told Gulf News at the Airport Show in Dubai on Wednesday.
Bahrain’s home carrier, state-owned Gulf Air, switched its attention to regional routes in 2013 when it started axing some long-haul flights as part of a restructuring process to cut losses.
Since 2013, origin and destination passenger traffic at Bahrain International has become heavier to account for 65 per cent of all traffic in 2015, according to Khalil. By comparison, origin and destination accounts for 50 per cent of Dubai’s passenger traffic, 36 per cent in Abu Dhabi and 20 per cent in Doha.
Origin and destination traffic is better for Bahrain International’s bottom line as it only charges passenger fees for those arriving and departing, not transiting.
Bahrain International, whose catchment area is anything within a three-hour drive of the small country, believes it can capture more O&D traffic from its neighbour Saudi Arabia, which connects to Bahrain by the King Fahd Causeway.
The airport is expanding capacity by 10 million passengers a year to 14 million by 2020 at cost of $1.1 billion.
That expansion “would vastly improve our services and would hopefully offer facilities that are specific to the Saudi passengers,” Khalil said.
The investment is the airport’s first major expansion since 1994, when capacity increased to around 4 million passengers a day. Already operating over capacity, Bahrain International expects 9.1 million passengers this year while a 2013 forecast puts annual passenger numbers to increase to 16 million by 2034. “There should be a new airport by 2034,” Khalil said.
In 2015, Bahrain said it was studying plans to for a two-runway airport on reclaimed land to the north of the country.
Fee increase not under consideration at Bahrain airport
Bahrain International is not considering an increase in passenger airport charges, the airport’s chief commercial officer told Gulf News on Wednesday following reports last year a new $26 tax could be introduced.
Gulf governments are considering new ways to raise revenue as falling oil prices contribute to higher budget deficits. In October 2015, Bahrain’s Daily News reported the country’s Muharraq Municipal Council said it was considering a new $26 airport tax.
“I am not aware of any strategies by the regulator to increase the passenger service charge,” Mohammad Khalil told Gulf News on Wednesday at the Airport Show in Dubai on Wednesday. “As far as I know they (airport charges) will continue to be flat.”
Earlier this year, Dubai and Sharjah introduced a Dh35 charge on most passengers flying out of the cities’ airports, including transit passengers.By Alexander Cornwell
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