Bahrain considers building new airport terminal, Transport Minister says

Bahrain is evaluating a greenfield project to develop an international airport terminal that will replace its existing hub in the next decade, as the kingdom targets an increase in arrivals amid plans to boost tourism and air connectivity in the country. The new airport would have a capacity of between 40 million to 50 million annual passengers and would replace the Bahrain International Airport after the existing hub reaches its maximum capacity by 2035, Mohammed Al Kaabi, Bahrain's Minister of Transport and Telecommunications, told The National on the sidelines of Routes World in Manama. The ministry last year awarded Netherlands Airport Consultants a contract worth 541,900 Bahraini dinars ($1.4 million) to conduct a feasibility study for the greenfield airport project. "We are studying what the future needs are for the construction of a new airport, to be located in the north of the country," Mr Al Kaabi said. "Work on this airport will start when we reach the limits of the current airport's capacity." The maximum capacity of the existing airport is about 14 million annual passengers. "This year we will handle about 9.5 million passengers, so we have about 15 years to plan. It is important to plan for the future and put scenarios outlining what is needed for the infrastructure," he said. "We are also evaluating the financial model. Will the government handle the project entirely or enter into partnership with the private sector? All options are on the table." The plans come as Bahrain seeks to develop its non-oil sectors, including aviation, tourism, hospitality and logistics, to diversify its economy from oil. The 210,000-square-metre passenger terminal at Bahrain International Airport opened in 2021 with an investment of $1.1 billion. By the year's end, the hub will have been used by 43 airlines connecting to 65 destinations in North America, Europe, Africa, Asia and the Far East. Bahrain has a pipeline of more than $30 billion in investment projects focused on logistics and tourism, the country's Economic Development Board said this month. The economy is projected to grow 3 per cent in 2024, up from 2.4 per cent last year, the Ministry of Finance said. This is driven mainly by non-oil sectors, as the government accelerates efforts to diversify its sources of revenue and economic sectors away from hydrocarbons. Bahrain's economy expanded by 1.3 per cent annually in the second quarter of this year, led by a 2.8 per cent growth in its non-oil sector, a Ministry of Finance report said this month. The transport and storage sector was the highest growing among non-oil activities, increasing by 12.9 per cent year-on-year. Bahrain, which is among the Gulf region's more indebted economies and smaller oil producers, has introduced reforms to make doing business easier, create more jobs and attract foreign investment to boost economic growth. Bahrain International Airport aims to connect to 100 new destinations by 2026, as part of its national air connectivity plan, Mr Al Kaabi said in a speech at the Routes World event in Manama last week. That ambition "underscores our dedication to expand our network, increase connectivity and strengthen Bahrain's position as a regional and global aviation powerhouse", he added. "This endeavour goes beyond numbers. This is about enhancing accessibility, driving economic growth and offering travellers more choices with better services." Bahrain Airport Company is seeking to attract more airlines to the hub and is exploring new markets in the East and West, including cities in Africa and the US to be served by flag carrier Gulf Air. So far this year, the airport operator has attracted Red Wings Airlines, Smartwings, Fly Jinnah, AJet and Azerbaijan Airlines, with plans to add five more airlines, Bahrain Airports Company chief executive Mohamed Al Binfalah told The National. The 10 airlines are expected to start operations by the end of this year, he said. Bahrain International Airport is forecast to handle more than 10 million passengers in 2025, up from a target of 9.6 million this year, he added. The airport handled 4.6 million passengers during the first six months of 2024, an increase of 12 per cent compared to the same period last year. It welcomed 8.7 million passengers in 2023. The airport could have grown further were it not for the global aviation supply chain issues that have delayed plane deliveries to many airlines, reducing their capacity at a time when travel demand remains strong. "Having the assets in place would have boosted the number of passengers that could have been served," Mr Al Binfalah said. Gulf Air plans to expand its network by 25 per cent in the next five years, subject to the availability of jets, global supply chain issues and economic downturns, Jeffrey Goh, chief executive of Gulf Air Group Holding, told The National. It currently flies to about 60 destinations. "That will be a substantial chunk of the progress from where we are today to the 100 destinations connectivity [plan], subject to the caveat of aircraft availability and the economic climate," he said. "But we feel confident that, all else being equal, we would be doing our part as the national aviation group in the kingdom to connect Bahrain to more parts of the world and for more parts to be connected to Bahrain." The country this year has made "huge progress" on performance metrics related to its 2022-2026 tourism strategy, which aims to diversify the kingdom's economy, Sarah Buhiji, chief executive of the Bahrain Tourism and Exhibitions Authority (BTEA), told The National . The tourism strategy aims to increase the total number of visitors to Bahrain for tourism to 14.1 million visitors by 2026, increase the average daily visitor spending to 74.80 Bahraini dinars and increase the average number of tourist nights in the country to 3.5. The number of visitors rose by 25 per cent year-on-year in 2023, BTEA said, without providing overall numbers. The number of tourist nights rose 46 per cent and tourist revenue increased 32 per cent. The tourism sector's contribution to GDP was 7 per cent in 2022, as per the latest BTEA figures. The planned single unified tourist visa for the Gulf will also help boost Bahrain's tourism arrival numbers, she said. The authority declined to provide specific targets. "The first few years of providing the visa will be the honeymoon period, it's going to be something new and something everyone wants to explore," Ms Buhiji said. Bahrain aims to attract tourists from source markets including the Gulf, China, UK, Germany and India, she added. Gulf Air recently launched routes to the Chinese cities of Shanghai and Guangzhou. Air cargo operations are also a vital part of the airport’s expansion plans. Bahrain is progressing on the development of the Express Cargo Village at the airport, officials said. The $30 million first phase is already operational, with major logistics players such as DHL, Aramex and FedEx among the companies based there. "We are in the process of preparing to launch phase two. The estimated investment there is $32 million and we expect to make an announcement of that in December," Mr Al Binfalah said. Current tenants want to expand their operations when phase two begins, with new tenants to be added. "We will be attracting a minimum of six more customers to set pace at the airport. This will be part of phase two," he said. Once completed, the Express Cargo Village will span 250,000 square metres. The kingdom is also investing billions of dollars in transport projects to improve its rail, maritime and logistics capabilities, Mr Al Kaabi said. The projects in the works include a national rail network and link with neighbouring Saudi Arabia; a metro line and projects to expand the logistics zone at Khalifa bin Salman Port. The Gulf countries agreed to complete their railway project connecting major cities in each of the six member states by 2030. In Bahrain, the long-proposed King Hamad Causeway linking the island with Saudi Arabia is still in the feasibility study stage. "For us in Bahrain, 2030 is not feasible because as an island we need to link through a causeway, so we are looking at the connection with Saudi Arabia, which is strategically very important," Mr Al Kaabi said. "It is important for the flow of cargo and will boost job creation and trade." It is an "expensive project and we need to ensure it will have a return on investment, especially that it will be built by the private sector", he added. Bahrain is also investing $2 billion in its metro lines, according to the minister. "We qualified the companies for the metro but there is no deal signed yet, we're still reviewing the project," he said. "The study is already concluded, the routes are already designed, these are 29 kilometres and 29 stations. What we need now is to validate the route based on future urban planning. There are new towns that will be built and we need to ensure that the metro will serve not just current but also future areas." Construction will take about five years and will begin once the study is concluded, he added, without providing dates. That investment is in addition to 24 million dinars over the next five years on public transport. In terms of maritime projects, Bahrain is working with APM Terminals, the international maritime operator, on logistics. "There is a strategic plan in the next five years for how we can boost and promote cargo and logistics when it comes to Khalifa bin Salman Port. We are working on two or three projects at the moment," he said. This includes the expansion of the current logistics zone, which has been 90 per cent leased, and there is scope to make it bigger by 30 per cent, he said. Other projects include deepening the shipping channels to attract bigger vessels.

Bahrain considers building new airport terminal, Transport Minister says

Planned hub will have a capacity of at least 40 million annual passengers, as the country aims to become global destination for travel, tourism and logistics