Interview: Paul Griffiths, Dubai Airports CEO

Dubai Airport CEO Paul Griffiths outlines how COVID will continue to impact strategy, and how he is confident its role as a major hub is secure in the recovery.

Rush Transcript:

Wes Charnock:           Hi everyone and welcome to the CEO interview for the Air Transport Community Week. I'm Wes Charnock, editor in chief of Routes. And today I'm delighted to be joined by Paul Griffiths, the CEO of Dubai Airports. Paul, thanks very much for joining us today.

Paul Griffiths:             Great pleasure.

Wes Charnock:           Thanks for being with us. And so to the questions, how's the airport fairing so far in 2021 with the Coronavirus pandemic?

Paul Griffiths:             Well, I think fortunately the traffic seems to have stabilized, albeit down at a significantly lower level than we saw in 2019. But of course we've gone through some dramatic adjustments of our business over the last year. And I think we're pretty confident that as the traffic builds, even if it's slowly at first, there will be a resurgence in traffic towards maybe Q3 or Q4. And if that's the case, then I think we will bounce back very quickly thereafter. But we've maintained a level of liquidity, which enables our business to continue to finance itself until we get to that point.

Wes Charnock:           Okay, perfect thank you. In terms of that demand that still exists, what's driving that demand? Is it VFR, leisure, business? And when the return comes, what do you think is going to be most important then?

Paul Griffiths:              I think the problem at the moment, of course there are so many heavy restrictions on travel that it's only people that are able to travel between two points and have the need to travel that are actually taking advantage of the limited movement that's available. And I think once the vaccine rollout in more countries proceeds to an advanced level, then you'll gradually see more bilateral arrangements open up between countries. Which will enable more and more people to get on an airplane, just like we used to a couple of years back.

Wes Charnock:           Yeah, that's the dream, yeah. And in terms of your airline partners, obviously Emirates is a big part of the story there. How closely do you need to work with your airline partners at the moment to keep in contact and keep them informed and vice versa?

Paul Griffiths:              Well, I'm always a great believer that airports wouldn't exist if it wasn't for our airline customers and their customers. So we keep incredibly close to them. And I think it's incredibly important that during this period of extreme stress in our industry, that we are sharing the pain. We made some very quick moves, right at the beginning of the pandemic to structure deals with all of our airlines to make it more commercially viable for them to start services as and when the traffic suggests that those services are in demand.

                                   And that's more important than our two major home-based carriers here, Emirates and Flydubai. I think there'll be early leaders in the recovery and Dubai has positioned itself as a strong and safe destination for people to come and visit. And as we saw, when we had the travel corridor in place as a bilateral arrangement between the UK and the UAE last November, the demand was very, very significant. And we believe with the UAE, Israel and the UK, the three most advanced countries in the vaccination program, that we will be able to get to pretty quickly, a bilateral arrangement which will open up flights between our two countries within a short period of time.

Wes Charnock:           Perfect, thank you. That'd be very exciting. In terms of your airline mix. As I said, obviously UK's a huge part of the story there. Do you anticipate with more startups in the region, et cetera, that airline mix changing over the next few years as more competition maybe comes into the market?

Paul Griffiths:              It may be possible, but it really depends on the landscape that we see. So many airlines have taken the opportunity to retire some of their older, less fuel efficient fleets, that the shape of the industry may be different. Which will drive a different pattern in demand. However, I think we're pretty confident that the bulk of our traffic will continue to be our two home-based carriers. We may see some more low cost and startups, but I think that's more likely to be at Dubai World Central, our second airport here in the city.

Wes Charnock:           Yeah, sure. And in terms of obviously, you and Emirates are interdependent in terms of the network they operate there. In terms of those network points that maybe you're not at serving the moment or you're serving with a lower frequency. When the recovery hopefully does start, I know you mentioned the UK, which network points do you think are a major focus for you both at the moment?

Paul Griffiths:              Well, I think clearly India is a major market for the UAE and the connecting traffic between India, Europe, and the US is obviously very important because of where we're geographically located. Now, the difficulty at the moment is India and the US are not particularly far up the curve of vaccination. So I don't know when that will come back. But that's obviously a key market recovery, as is Europe, France, Germany, apart from the UK, which obviously is a major market for us. Those are all very, very important markets. But with previously something like 260 destinations being served from DXB, we do stand at the heart of the world with a huge number of the world's population being within four hours of flying time of Dubai. That our role as an Intercontinental hub I don't think will be diminished when we emerge from the other side of the global pandemic.

Wes Charnock:           Well, that brings me nicely to my next question, which is, I hear lots of theories in the industry. One of the theories I hear is that people will be less inclined to travel through hubs because of safety fears. And they'd rather travel point-to-point post COVID certainly for a while. That's not something you anticipate affecting your business model in the recovery?

Paul Griffiths:              I don't think so because at the end of the day, the commercial reality of that will be very different I believe. There are many city pairs, even with small, long range efficient aircraft, it would just not be economically viable to have a direct service. So I think the role that we sit here between the convergence of Europe, Africa, Asia, and the Indian sub-continent is pivotal in maintaining all of those different connections. I mean, you're never going to get a direct service on a single airplane between Perth and Conakry or Lagos and Cambodia. The traffic just isn't there, even with the smallest long-haul airplane. So the convergent power of hubs to deliver so many city pair possibilities through an Intercontinental hub like DXB, I'm convinced will remain the prevalent business model for the foreseeable future.

Wes Charnock:           Perfect. Well, that's all my questions. So thank you very much for your time today, Paul, and best of luck with your business in the recovery.

Paul Griffiths:              Thank you very much, Wes, good to talk to you.

Wes Charnock:           Thank you very much. Thanks, goodbye.