TASQUES PREVENTIVES I OPERATIVES ASSOCIADES AL RISC DE VENTADES:

There are a number of rail, road and sea based transport facilities that may be considered as substitute products for airports. One of the major profit centres of DXB is air cargo transport. The main competitors for air cargo transport include cargo transport by road, rail, and freight cargo ship, many of which can be cheaper, although not faster, than air cargo transport. The overall level of rail transport penetration in the Middle East region is very low, with only 16.930 miles of railway line throughout the region, a total coverage density of 0.006 km/km2 (Held, 2009). Although this is slightly more than Australia’s rail density penetration, it is not substantial when compared to areas with high rail transport coverage, such as the UK (with 0.15 km/km2 of coverage); and the majority of this coverage is in countries including Turkey, Egypt and Iran (Held, 2009). Overall, rail coverage in the Middle East is less than 3% of paved road coverage (Held, 2009). In the UAE, a 700km rail system project is being researched to connect Dubai and Abu Dhabi with the other emirates (Ministry of Economy, 2007). Thus, rail cargo transport cannot be considered to be a major substitute for air cargo transport.

The UAE’s main cities are connected with each other by a good transport system of highways and roads covering around 4,000 km, which also connect the UAE with neighbouring countries like Saudi Arabia and Oman (Ministry of Economy, 2007). Road transport in the region is widely used and may be the short-range substitute for air cargo transport (Held, 2009). However, the length of time required to transport goods by road limits the potential for competition in this area.

139

The competition from sea freight transport is the strongest potential substitute product in this area. There are 15 commercial ports in the UAE with a capacity of more than 70 million tons of cargo (Ministry of Economy, 2007). Amongst the most important seaports in the UAE are Port Zayed in Abu Dhabi, Port Rashid and Port Jebel Ali in Dubai, as well as Port Khalid and Port Khor Fakkan in Sharjah (The UAE Government, 2009). Ports in the UAE are primarily focused on oil and petroleum products transport, and there is a strong component of other goods transport (Held, 2009). There are a large number of shipping companies that provide services to and from the UAE. The United Arab Shipping Company (UASC), which is partly owned by the government of the UAE along with other members of the GCC, is the leading freight transporter in the Middle East (Ministry of Economy, 2007). The Gulf Agency Company (GAC), which is one of the largest shipping agencies in the world, also originates from the UAE and is based in Jebel Ali Port in Dubai (Ministry of Economy, 2007). Both Port Rashid and Port Jebel Ali; the latter, the world’s largest seaport, are operated by DP World (established in 2005 from the integration between Dubai Ports Authority (DPA) and Dubai Port International (DPI), and in 2008 they handled 11.8 million TEU (Twenty- foot Equivalent Unit); this represents 11% growth in throughput from the previous year (DP World, 2009). These figures demonstrate that a substantial amount of cargo is being transported by sea. Although sea transport is generally seen as a slow and old- fashioned mode of transport (Blauwens et. al., 2008), which cannot act as a full substitute to air transport, it can be considered as a substitute service for airports for less ‘time critical’ cargo shipments.

Many of the same substitutes for air cargo transport also apply to air passenger transport. However, for the same reason and in the same magnitude as air cargo transport, air passenger transport is unlikely to be replaced by rail passenger transport simply because coverage is not complete enough to allow this to be a viable and convenient option. Additionally, while road transport is likely to be acceptable to passengers for short distances, it is unlikely to be acceptable for longer trips, mainly due to the extreme weather temperature and the desert land covering a large part of the

140

region. This would reduce any possibility that passengers would choose to travel into the region via road in significant numbers and on a regular basis.

As noted above, the issue of sea transport is an open issue. The region has active ports that are used for long and short distance passenger travel as well as cargo shipping and receiving (Held, 2009). However, the relatively high cost of passenger travel through the ocean, as well as the length of the travel process as compared to air travel, also makes sea transport an unlikely substitute for most passenger travel. Nevertheless, there are likely to be a small number of cruise and adventure passengers that may choose sea transport. However, they are unlikely to make a significant impact on the growth level of the airport.

Interviewees were asked whether substitute services such as rail, roads and seaports have had an impact on their operational level and they responded:

If you look at our traffic figures, most people travelling through Dubai Airport are coming and going to places that are difficult to reach by car, train or even by ship. So, I do not think that Dubai Airport can be substituted (GA).

98% of people who come to Dubai have to fly here (JR).

While cargo transport through seaports is seen as the only major substitute for DXB, this substitute is seen as insignificant in these statements. This shows that the threat of substitute services that may be regarded as competitors to DXB can also be considered as very limited.

In addition, interviewee JR highlights the importance of integrating with other means of transportation for the success of the airport and for the attractiveness of Dubai. JR asserts:

141

I think in terms of inter-modality rail, roads and seaports facilities should be taking into account in any future plans to insure that they are integrated to take advantage of them. This will also provide a good level of service and provide proper future terminal facilities, for example remote check-in which will reinforces the attractiveness of Dubai. In the cargo side there is a logistic supply chain opportunity for integrating the seaport with the airport.

This means that the integration of the airport with other transport facilities enhances the airport’s catchment area and provides a higher quality of service for the airport users, which can be regarded as one of the airport’s strengths.