Bahrain's airport and national carrier are set to increase capacity

Of the six GCC states, Bahrain has the longest history of international air travel and Bahrain International Airport (BIA) is the region’s oldest airport. Today BIA receives 9m passengers a year. The airport currently serves 31 commercial and 10 cargo carriers that in total operate 921 flights per week to 45 global destinations. The next chapter planned in Bahrain’s aviation history is a major upgrade to BIA.

Planned Upgrade

The move corresponds with a reshuffling of national carrier Gulf Air, designed to make the firm more competitive. The BIA expansion consists of a three-tiered development project, known as the Airport Modernisation Programme. Preliminary expansion plans call for an additional 13 gates and 40 more check-in counters, as well as four more baggage reclaim belts. Additional Customs desks for both GCC and non-GCC visitors will also be built. In late 2013 the Bahrain Airport Company bought the 50% stake held by Hochtief Facility Management in their joint venture to manage the airport. Later in early 2014, Hill International won an $18m contract from the Ministry of Transportation and Telecommunications (MTT) to oversee the ongoing airport modernisation.

The upgrade will also include some less visible enhancements. For example, the fuel storage facility used by the Bahrain Petroleum Company is located in an area that has seen urban encroachment over the past two decades. Part of the works will relocate all refuelling and storage facilities within the confines of the airport. The tender for the consultancy to oversee the land use and zoning infrastructure was awarded to ADPI by the MTT during the Bahrain International Airshow 2014 in January. Also during the airshow BIA reached an agreement with AMA Motors Group to spend BD1.3m ($3.45m) for the purchase of two 8x8 rapid aircraft intervention vehicles in addition to technical support, repair and maintenance services.

The cost of the airport’s immediate refurbishment work is expected to be BD30m ($79.5m), and BD330m ($874.5m) has been allocated for the intermediate phase of the project. Funding for the project will come from the government. When finished, the upgrade will both increase services available and the overall number of passengers handled each year to 14m. The last major upgrade of the airport occurred in 1993 when the total capacity of the airport was expanded to 3.5m passengers per year. BIA projects the number of passengers passing through the airport to grow by 6% in 2014. These numbers will continue to rise as part of changing patterns in regional airline travel.

“Regular travellers who used to travel just once or twice a year have changed their routine,” Husain Rasool, corporate communications manager at Bahrain Airport Company, told OBG. “It is now very common in the Gulf to have more short-term travel and weekend travellers as well. This increase is as a result of both changing business and leisure travel patterns. At the Bahrain Airport Company our projections for the new airport have taken these new patterns into consideration.”

A New Hub

Gulf Air, Bahrain’s national airline, is currently undergoing a number of structural and strategic changes to increase its competitiveness and to take advantage of the airport renovation. In 2014 the airline moved to cut routes to Copenhagen, Rome and Colombo, where demand was low.

Other important changes show the company taking up modern IT business solutions. Over the last two years, Gulf Air has embraced “Big Data” through a programme known as Cloud Arabic Sentiment Analysis, allowing the company to analyse Arabic-language social media. The company has won five innovation and business computing awards for its Big Data programmes since April 2013. Gulf Air was also the first in Bahrain to introduce private cloud computing in its IT operations. This new data innovation is already showing results. In 2013 Gulf Air’s online call centre raised sales 12% and frequent flyer enrolment was up by over 118%. In April 2014 the Bahraini parliament gave preliminary approval for a move to grant a 30% subsidy to the airline on the fuel it uses. These moves will help ensure the carrier remains competitive as construction work is carried out at its main hub.

Long & Short

BIA continues to attract interest from international carriers. Czech Airlines used the Bahrain International Airshow, held in January 2014, to announce the launch of flights to Bahrain beginning in the first quarter of 2015. More recently, Cathay Pacific has announced an increase in the number of its flights between Bahrain and Hong Kong. The addition in March of three more flights per week creates a daily connection between the two financial centres. Turkish budget carrier Pegasus announced in 2014 it would begin seasonal flights to Istanbul’s Sabiha Gokcen Airport. In conjunction with the airport expansion, Bahrain’s Cabinet also mulled a host of incentives to encourage more airlines to add Bahrain as a destination.

Asian Markets

The expansions will allow the airport to better reach markets in Asia, an important part of the airport’s growth strategy. “We are currently in the final stages of deciding our route strategy,” Mohamed Yousif Al Binfalah, CEO of Bahrain Airport Company, told OBG. “What is now very clear is that Asia is where we can attract new airlines and increase our connections to underserved destinations.”

The Gulf sits at a strategic location for international air traffic, relatively equidistant from the booming business centres of East Asia and the financial and political centres of Western Europe. However, BIA is also a key airport for short-haul flights. Riyadh and Dubai can be accessed within a 45-minute plane ride while Doha is only 20 minutes by air. Furthermore, BIA’s catchment area includes the Eastern Province of Saudi Arabia, according to Bahrain Airport Company. As such the firm puts the total population of the airport’s catchment area at 3.2m people. Upgrades should also allow Bahrain to better position itself as a hub for Saudi air travellers as well. In 2013 some 54m air passengers moved through Saudi Arabia’s 27 airports.

In 2010, Skytrax Global Airport Awards ranked BIA as the number one airport in the region, ahead of both Dubai and Abu Dhabi. BIA is expected to sit comfortably with similar expansion projects in the region, such as the new Doha airport, which opened in April 2014.

Racing Ahead

Sporting events are helping to drive passenger traffic. Bahrain’s annual Formula 1 racing event sees the total number of travellers to the kingdom swell, and BIA opens special border control lanes to cater to race visitors. Looking ahead, Qatar is set to host the 2022 FIFA World Cup, which may have knock-on effects for demand at BIA. If the 2022 World Cup in Qatar receives a similar number of visitors to Brazil’s 2014 World Cup, access to a second airport will be important. Indeed, Qatar’s World Cup bid recognised the need for a 40-km causeway linking the two states to facilitate such added capacity. Under the terms of the bid, 40% of the causeway is to be finished by 2018. When it is completed, Bahrain will be able to act as an alternative entry point to both Saudi Arabia and Qatar.

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The Report: Bahrain 2015

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