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Dubai, once a humble refueling stop, is crossroad to the globe

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The gimmicks to attract attention and passengers — a $1 million raffle, a chance to win a Porsche 911, or a monthlong shopping festival — are still there but are hardly needed anymore. Travelers from around the world no longer need to be lured to this parched former trading post on the edge of the Persian Gulf.

From its humble beginning as a refueling stop for travelers with no desire to linger in an inhospitable corner of the Arabian Peninsula, Dubai's airport has recently overtaken Heathrow Airport in London as the world's busiest international air travel hub. Just a decade ago, Dubai ranked as the 45th-largest international hub.

Dubai's rise as a modern crossroads connecting East and West — with the name of its hometown airline, Emirates, adorning the jerseys of the world's best soccer teams and sponsoring Formula One car racing and the United States Open — is a tale of globalization and ambition, and an audacious bet on the future of air travel.

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Now, families from India and European backpackers roam through the airport's soaring terminals, with water cascades and fake palm trees, duty-free stores and high-end boutiques, as athletes from Iran and tourists from Russia look for their next flight in this cosmopolitan oasis.

With few natural resources, barely any oil of its own, only 168,000 Emiratis and average temperatures exceeding 100 degrees Fahrenheit from May to September, Dubai has taken on a hazardous gambit.

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But what Dubai lacked in climate it more than made up in geography. Situated within eight flying hours of two-thirds of the world's population, Dubai has set up a global hub that can connect virtually any two cities in the world with just one stop. And despite the last economic downturn, it has stuck with grand plans to build a second airport that will eventually dwarf its existing one in the next decade.

Since the 1980s, when its rulers decided to turn the city into a tourist destination, Dubai's biggest developments include two of the world's largest shopping malls — one with a huge aquarium, another with an indoor ski slope — the world's tallest tower, Burj Khalifa, measuring 2,717 feet, and artificial palm-shaped islands that can be seen from outer space.

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But the cornerstone of the strategy was creating a new airline and building an aviation infrastructure around it to support its growth.

"The airline is the linchpin of Dubai's success," said Jim Krane, a Gulf expert at the Baker Institute for Public Policy at Rice University, and the author of "City of Gold: Dubai and the Dream of Capitalism." "Air travel can make or break Dubai, and its economy is wholly dependent on it."

Dubai received 67.3 million passengers in the 12 months through February, according to the Airports Council International, jumping for the first time ahead of Heathrow's 66.9 million international travelers, and Hong Kong's 59.9 million. It trails Hartsfield-Jackson Atlanta International Airport and its 95 million passengers, though many of those are domestic passengers. Given Dubai's growth rate, it should also overtake Atlanta within a few years.

Runway repairs have temporarily slowed traffic at Dubai's airport, but it should cement its lead over Heathrow by next year.

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Emirates was set up in 1985 with a $10 million grant from the government of Dubai and a pair of Boeing 727 planes. The catalyst was a decision by Gulf Air, the region's main carrier at the time, to cut back on weekly flights between the United Arab Emirates and Pakistan because of a dispute over traffic rights.

The carrier grew rapidly thanks to open skies policies that favored the development of the aviation sector and a business-friendly environment for foreigners.

It helped too that the chairman and chief executive of Emirates, Sheikh Ahmed bin Saeed al-Maktoum, is also chairman of Dubai Airports, president of the Dubai Civil Aviation Authority, and chairman of Flydubai, a low-cost carrier. He is also the uncle of the current ruler of Dubai, Sheikh Mohammed bin Rashid al-Maktoum.

To attract tourists, Dubai created a monthlong shopping festival offering discounts and deals on global brands and cheaper fares and hotel rooms.

A report by the CAPA Center for Aviation, a consulting firm, said Dubai's growth was "inexorable," thanks to its aggressive airline expansion, few restrictions on international flights and large public investments.

"Dubai lies at the heart of a global travel nexus, linking Asia-Pacific to Europe and Africa," CAPA said.

Five years ago, the global credit crisis brought Dubai near bankruptcy. But the city has recovered its drive, helped partly by a $10 billion bailout from neighboring Abu Dhabi, and a return of investors from the Middle East and Eastern Europe.

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Dubai's government planners expect traffic to hit 100 million passengers in 2019, at which point the current airport will reach its maximum capacity. By then Dubai will be tackling a much bigger project, a second airport with five parallel runways, and an annual capacity of 120 million passengers. Dubai World Central-Al Maktoum International Airport is expected to cost about $80 billion and should be completed in the middle of the next decade.

Its capacity could reach 200 million by the middle of the century, said Paul Griffiths, the chief executive of the government-owned Dubai Airports.

"We keep recasting our capacity goals because the demand we are forecasting keeps going up," he said.

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Dubai's success has rattled its rivals, particularly airlines in Europe and the United States, which have complained that traffic was being siphoned from their hubs.

They are also concerned by a recent decision from the United States to set up an immigration clearance facility in Dubai similar to the one in Abu Dhabi, which allows passengers traveling to the United States to clear immigration before boarding.

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After Dubai won the bid to host the World Expo in 2020, fueling another round of frenzied construction, some have expressed concern. The International Monetary Fund warned about the risk of a new real estate bubble and the extra financial risk that would pose to government entities.

Emirates has also spawned a pair of rivals in the Gulf region, Etihad Airways in neighboring Abu Dhabi and Qatar Airways, which have mimicked its strategy and threaten to take away some of its traffic.

Still, tourists are back. At 2 a.m. on a Friday, for instance, the airport is teeming with travelers.

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"It's a little shiny, and a little flashy, and it's definitely Dubai-style but I like it," said Marius Verscheure, a French petroleum engineer, who was recently waiting for a flight on a two-hour layover between Kuala Lumpur in Malaysia and Paris.

"It's big but you don't feel overwhelmed by the size."

Contact World Economy

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