Grand opening: New terminal and low-cost carriers support expansion


After almost a decade of construction work, the Midfield Terminal Building (MTB) at Abu Dhabi International Airport (AUH) is in the final stages of development. The 742,000-sq-metre structure will significantly increase the airport’s capacity, serving as the gateway to Abu Dhabi for tens of millions of passengers each year. Designed by US architecture company KPF, the building’s illuminated interior will be visible from the motorway over 1500 metres away. Inside the new structure, passengers will pass through a departure hall with a 52-metre-high ceiling supported by long-span leaning arches. From the air, approaching aircraft will see an x-shaped structure with stands placed along four crescent-shaped axes. The MTB won International Airport Review’s 2019 Innovative Design Project award and has also been recognised with a number of other prizes for its architecture and building information management.

By the Numbers

The MTB will have the capacity to handle 45m passengers per year and 8500 passengers per hour through 49 aircraft gates. It has been designed to achieve a connection time of just 45 minutes – including baggage transfer – and will have 154 check-in desks and 44 self-service kiosks. The airport will have approximately 29,000 sq metres of retail and food and beverage outlets, while the airline lounges will span over 27,000 sq metres. The terminal building will also include a three-star transit hotel with some 200 rooms.


It has taken over 50m man-hours to create the MTB. Abu Dhabi Airports invited tenders for the construction in February 2011, while also undertaking the refurbishment of Terminal 1 and boosting the existing capacity at AUH by 7m annual passengers. By November of that year Abu Dhabi Airports had received six tenders from joint ventures involving international firms and Emirati contractors, and in February 2012 the Abu Dhabi Executive Council approved the construction. The new project was commissioned in response to the high levels of air traffic, with AUH seeing aircraft movements grow at a compound annual growth rate of 12.9% from 2007 to 2012, spurred by the rapid expansion of UAE government-owned flag carrier Etihad Airways, and the development of Abu Dhabi as a business and leisure destination. In May 2012 it was announced that the $3.2bn construction contract for the MTB had been won by a joint venture composed of Consolidated Contractors Company, Turkey’s TAV Construction and UAE-based Arabtec Construction. TAV’s Ali Haydar Ozak, a member of the joint-venture board and TAV’s director for construction in the Abu Dhabi area, has been with the project since 2012. “There are almost no straight lines in this terminal and it is full of new concepts and custom-made components, with hundreds of on-site pieces fitting together on the job,” Haydar Ozak told OBG. In late 2019 most of the construction had been completed, with ongoing testing, and fire and safety certification taking place at the terminal, while the area around the site was still due to be landscaped before the official opening.

Flag Carrier

The MTB will give Etihad Airways a new home and allow its passengers to enjoy a smoother arrival and departure journey. The four wings of the building will considerably reduce the time between touch-down and Customs by reducing taxiing time on the airport’s parallel runways.

The building will come on-line after a number of years of fiscal restraint that have seen state-owned enterprises cut costs in response to the fall in oil prices in 2014. Its opening was set to coincide with greater public spending on oil and gas, industry and infrastructure across the emirate in 2020, although a renewed period of low oil prices in the first half of the year amid the Covid-19 crisis will likely see smaller government outlays. The MTB, meanwhile, is still expected to begin operations in the near future.

Etihad Airways should start to use the MTB midway through its five-year transformation programme that was designed to put the carrier on a more sustainable financial footing. In October 2019 Reuters reported that an executive of the airline said that Etihad Airways was expected to become profitable again by 2023. The airline carried 17.5m passengers in 2019, with a seat load factor of 78.7%, compared to 17.8m and 76.4%, respectively, in 2018. Losses in 2019 were reduced from $1.28bn to $870m.

“We have significantly simplified our business and we are running a leaner organisation that is focused on growing Abu Dhabi. Stimulating the emirate’s inbound tourism is a key driver of our business,” Vijay Bathija, vice-president of commercial strategy and analytics at Etihad Airways, told OBG.

Passenger numbers for 2019 suggest that the MTB will have spare capacity to absorb the impact of future expansion, either in Etihad Airways’ offering or in the number of international airlines using AUH as a destination. While long-term growth is expected, the onset of the Covid-19 pandemic in the first half of 2020 saw flight suspensions globally, negatively affecting passenger volumes.

As of late 2019 Etihad’s fleet count was 106, with an average aircraft age of 5.7 years. Over that year, the airline purchased eight new craft: three Boeing 787-9s, four Boeing 787-10s and one Boeing 777-200 freighter. It also purchased five new Airbus A3501000s, 26 Airbus A321neos and six Boeing 777-9 aircraft, which will be brought into service over the next few years. However, in February 2020 the airline announced that it was selling 38 aircraft to investment company KKR and leasing firm Altavair AirFinance in a deal estimated at $1bn, with 16 to be leased back to Etihad Airways upon purchase.

Low-Cost Flying

In October 2019 Etihad Airways indicated its plans to tap into a new target customer base, announcing it was entering a joint venture with Sharjah’s Air Arabia to create a low-cost airline named Air Arabia Abu Dhabi to be based at AUH. The following month Air Arabia placed a $14bn order for 120 new Airbus A320 aircraft. Preliminary details on planned routes released in December 2019 indicated that the new carrier will partly focus on linking the UAE to the Indian market and neighbouring countries, following the collapse of India’s low-cost Jet Airways in 2019 and Etihad Airways’ cancellation of a number of routes to this market that same year (see overview). The new airline was scheduled to commence operations in the second quarter of 2020. Although it looks likely that this timeline will be delayed by the Covid-19 pandemic, in mid-April a spokesperson for Air Arabia said the airline was making preparations for a near-term launch.

In March 2020 European low-cost carrier Wizz Air announced that it would launch operations in the emirate after finalising an agreement with Abu Dhabi Developmental Holding Company. The joint venture – which will be 51% Abu Dhabi-owned – was set to begin operating from AUH in the second half of 2020 with three A321neos aircraft, though this too may be pushed back by the Covid-19 pandemic. Over the longer term the airline plans to expand its fleet to some 50 aircraft by 2030.

These moves are likely to increase price competition in the UAE. Indeed, the GCC’s population has not had access to the same kind of low-cost, flexible air travel common in Europe, though some airlines are frequently referred to as budget carriers, such as Emirates’ sister airline flydubai.

However, low-cost airlines are not always the cheapest option for passengers in the region. For instance, a May 2018 report from Gulf News noted that average prices on Etihad Airways and Emirates were $0.10 and $0.11 per km, respectively, compared to $0.19 per km on flydubai. It should be noted, however, that these averages may have changed since the publication of this piece.

Airport Businesses

In addition to serving as a node for passengers, the new MTB will be home to Etihad Airport Services, which is made up of ancillary companies handling baggage, catering, ground handling, cargo and logistics; Etihad Aviation Training, which taught some 18,319 cabin crew trainees 1231 different courses in 2018; and Etihad Airways Engineering, an aviation maintenance, repair and overhaul services provider. The new terminal will also provide fresh opportunities for retailers and food and beverage outlets.

The opening of the MTB closely follows the decision of Abu Dhabi authorities to transfer government ownership of a dozen state-owned entities, including Abu Dhabi Airports and Abu Dhabi Ports Company, to Abu Dhabi Developmental Holding Company in July 2019. Abu Dhabi Developmental Holding Company’s mandate is to guide the development of these companies by enabling them to achieve excellence in terms of performance, productivity and quality, in line with the Abu Dhabi leadership’s vision.