Adac considers targets for first overseas expansion

17 July 2008
State-owned Abu Dhabi airport operator aims to take over one site by the end of the year.

Abu Dhabi Airports Company (Adac) is planning to expand overseas for the first time, with a deal to acquire a foreign airport likely within months.

The state-owned airport operator is in the final stages of discussions between board members and the Abu Dhabi government over where it should target the first stage of investment.
The company has yet to decide whether to acquire an airport outright, or to simply compete for facilities management contracts in another country.

“We are looking to buy or manage foreign airports and aim to take over one site by the end of the year,” says Rudy Vercelli, chief executive officer of Adac, speaking to MEED at the Farnborough International Airshow in the UK on 15 July. “We are still looking at all the possible scenarios and have not decided which region we will be targeting.”

Adac is undergoing rapid expansion. As well as overseeing the redevelopment of Abu Dhabi International Airport, Vercelli says the company will relaunch Al-Ain International Airport as a dedicated hub for low-cost airlines later this year.

It will hold a conference at Al-Ain for international low-cost carriers in October and hopes to sign up airlines to use the airport soon after.

Although the new Abu Dhabi airport will be available for budget carriers, Vercelli says the lower cost base at Al-Ain should be attractive to short-haul airlines. The aim is to establish Al-Ain as
a regional hub for short-haul aviation, offering lower overheads than the larger airport projects under development nearby.

“Al-Ain is less than an hour to Abu Dhabi, an hour to Dubai, and Muscat is close as well,” says Vercelli. “There is no need for further investment at the moment and we are pitching it to low-cost carriers and cargo operators.”

The move comes in addition to plans by Adac to redevelop a former military airbase at
Al-Bateen, close to Abu Dhabi city, as a dedicated facility for private jets. The plans for Al-Bateen were unveiled at Farnborough.

The airfield will serve as a ‘one-stop shop’ for business jets, with VIP services and maintenance, repair and overhaul facilities. The airport currently has capacity for 20-30 business jets. However, Adac will expand this in time to cater for an expected increase in executive air travel across the region in the coming years.

“There are currently 388 [executive] jets in the Middle East, but we expect there to be about 900 within six years and $190bn worth of investment in the sector,” says Vercelli.

“We are becoming an airport asset management company and have created a cluster of airports performing different purposes at Abu Dhabi, Al-Ain and Al-Bateen.”

Previous efforts by local firms to acquire overseas airports have run into trouble. Dubai Aerospace Enterprise’s bid to buy 60 per cent of Auckland International Airport in 2007 failed because of widespread local opposition to foreign control of New Zealand’s international gateway.

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