Dubai: Emirates Group's dnata, which provides airport and travel services in over 30 countries, has no immediate plans for a public listing despite the IPO trend currently sweeping the UAE and GCC
Instead, the focus remains on expanding cargo operations and growing its presence at Dubai’s Al Maktoum International Airport (Dubai World Central). This also includes the construction of a new warehouse for dnata Logistics in Dubai South, the home base for the $35 billion DWC passenger terminal.
“We are just about to break ground for a warehouse in Dubai South for dnata logistics. So that's getting ready for the future, but also something that we need with the massive growth of cargo today,” said dnata CEO Steve Allen. Further details about the new warehouse will be announced soon, he added.
As for the IPO, Allen said, “We are trying to build the best company we possibly can. And if they decide to IPO, that's what we will do.”
He added, “We have a strong balance sheet right now. We are paying regular dividends to the government. We don't need some of the injections of capital to be able to survive in any way. So, it's not holding us back.”
DWC design to run into 2025
“We (dnata) are invested in the current infrastructure and facilities, but, we are actively involved in the planning for the new airport,” said Allen.
The master plan for the new DWC passenger terminal, set to open in 2033, was unveiled earlier this year. According to Allen, the new hub is currently undergoing a detailed design phase that will run into 2025.
"The design phase will likely extend into 2025, but that doesn’t prevent us from starting the build phase in parallel. The macro-level groundwork has already begun. We have started flattening the earth and are examining the requirements for the underground facilities,” he stated.
That said, Allen said dnata continues to invest in the facilities at Dubai International Airport (DXB). “We recently made a global order of $210 million of ground service equipment, and a lot of it will be for Dubai,” he said.
‘The star has been cargo’
The company’s airport operations division recorded 1.5 million tonnes of cargo handled during the first half of the financial year, up by 18% due to the global buoyant demand for air cargo services. “We are seeing significant growth on the cargo side globally. I could pinpoint places like the UK, in particular, which has been very strong for us from a cargo perspective. Europe has been strong as well. I think we've seen the biggest growth here in Dubai,” he stated.
“We have been trading from east to west, north to south, but also with the growth of Dubai itself. Cargo reaching Dubai as its ultimate destination has been a major boost for us,” Allen said. According to Boeing's 2024 World Air Cargo Forecast (WACF), the biennial overview and long-term outlook for the air cargo industry, the global freighter fleet is to grow to 3,900 jets over the next 20 years, including production and converted jets. The report said demand will be boosted by e-commerce and geographically shifting supply chains.
Airport services
dnata’s other divisions—airport services, travel, and catering—have also shown solid growth, reflecting strong demand for passenger travel. The company’s airport operations division remains the largest contributor to its revenue with Dh4.8 billion, a 15% increase compared to last year, as its airline customers’ operations continued to pick up, particularly in Australia, Singapore, the UAE and the UK. Across its operations, the number of aircraft turns handled by dnata increased by 2% to 391,365.
Allen said, “The aviation market is growing around 7% for airport services, and we're aligned with that. We're pleased to be expanding our overseas business as well.”
Airport Handling S.p.A, dnata’s majority-owned subsidiary, recently secured a seven-year ground handling license at Rome Fiumicino Airport (FCO) after a long legal battle, with a €20 million investment in this key overseas location. “That (FCO) will be a major growth location for us, one of our biggest overseas airports,” stated Allen.
dnata has also grown its US presence, adding Raleigh-Durham to its over 20 airport locations. Further international expansions are expected in the second half of the year, said Allen.
In-flight retail a relatively new model where airlines outsource all onboard retail operations to a provider like dnata. “We handle everything—ordering, inventory, menus, cabin crew training, point-of-sale machines, and revenue collection, then share the profits with the airline,” he stated. “The key to this success is data. By analysing purchasing trends on specific routes and times, we can better predict what passengers want and ensure it's available. This improves revenue and enhances the passenger experience by reducing stockouts,” he said.
While in-flight retail is popular among low-cost and ultra-low-cost carriers, Allen said dnata is discussing similar options for economy cabins on other airlines.
