FlightGlobal.com
Home
Premium
Archive
Video
Images
Forum
Blogs
Jobs
Shop
RSS
Email Newsletters
You are in:
Home
Aviation History
1987
1987 - 2153.PDF
AIR TRANSPORT Emirates prospers despite slump DUBAI The business turndown in the Gulf resulting from lower oil revenues, the consequent reduction in the number of expatriate workers, and the insecurity stemming from the Gulf War, has caused a decline in the demand for travel to the region which has put a number of established airlines under pressure. Business is boom ing, however, for Emirates Airlines, the recently created Dubai-based carrier. Founded with support from the Dubai royal family and headed by Shaikh Ahmad bin Saeed al Maktoum, the airline started flying two years ago this month, with services to Bombay, Delhi, and Karachi (reflecting the high propor tion of Asian expatriates among its clientele). Last year saw the start of services to Colombo, Dhaka, Amman, and Cairo, and this year the route network has been expanded with the addi tion of services to London, Istanbul, Frankfurt, and Male (capital of the Maldive Islands). Last year, its first full year of operations, the airline carried 287,762 passengers (with a load factor of 58- 2 per cent), 9,862 tonnes of freight, and more than 330 tonnes of mail. But in the first six months of this year alone 195,858 passengers were carried—one third more than the 140,192 in the same period for 1986. Emirates' profits in the first half of this year exceeded the total for the whole of 1986, although the airline would not give any figures. Both of the new European services are performing strongly, suggesting that the results for the second half of the year will be even better than for the first six months. The airline's daily London- Dubai service began on July 6, and in its first two months of operation Emirates carried 11,478 passengers—nearly half the total traffic on the route. On its new Dubai- Istanbul-Frankfurt service, which began in early August, the airline has already captured 50 per cent of the total traffic. The airline is especially Two-year-old Emirates has become the first Middle East operator of the Airbus A310-300 pleased at the London results, which are better than it had expected. "London has been the big test," Emirates says. "It is the most competitive aviation marketplace in the world." In line with its route expan sion, Emirates has been upgrading its fleet. The airline began with one Boeing 737 (leased from Pakistan Inter national Airways), one Boeing 727, and one Airbus A300. However, it has just received a new Airbus A310, and another is scheduled for delivery in November. ' Moreover, the airline has a 279-seat Airbus A300-600R on order for deliv ery in November next year, and an option on a second A300-600R for possible deliv ery in 1990. While Emirates Airlines has gone from strength to strength, its major local competitor, Gulf Air, has been under pressure. The airline carried 2,589,697 passengers last year, 10 per cent down on 1985, and made a $5 • 6 million loss (compared with a profit of $12-7 million in 1985). The regional economic downturn and the laying-off of expatriate workers by the Gulf states have been the major reasons, according to Gulf Air, although competi tion from the new Dubai- based carrier may also have been a factor: Gulf Air suspended its own London- Dubai services just a month before Emirates Airlines started operating the route. In addition, Gulf Air has been hit by severe price-cutting by airlines fighting to retain their market share. In a bid to ease the pres sures, Gulf Air has launched a rationalisation programme which includes the return of a leased Boeing 747 to Scan dinavian Airlines System and which might entail the sale of its two Lockheed TriStars. Gulf Air's TriStars were recently refurbished, and a decision will be taken this month on the acquisition of new aircraft, possibly Boeing 767s. New services to Nairobi and Dar-es-Salaam also start this month. The airline hopes they will benefit from the Gulf's traditionally close ties with east Africa. Dubai, an important stop over point on Far Eastern routes, is also served by PIA, Air Lanka, and several Euro pean airlines, all of which have also been feeling the squeeze. British Caledonian Airways concedes that traffic to the emirate has "suffered with the general business decline in the region." Much of this has been offset by a strong demand for travel to and from the Far East. Never theless, cargo and passenger traffic levels to and from Dubai remain "perfectly satisfactory". British Airways also admits that it "would like more passengers than., we are currently getting" on the Dubai route. • Emirates Airlines appears to have escaped the downward trend in the region for three main reasons. First, it has undertaken intensive market ing and advertising cam paigns. Second, it has laid great stress on providing an exceptionally high standard of inflight services. Emirates' new A310s have only 181 seats, in a three-class layout. The third factor in Emirates' success must be that it is new and small, and has been able to match its operations closely to market conditions. In contrast to Gulf Air, it has been unen cumbered by an operation developed when demand was stronger. Gulf Air, however, does have one major advantage over the newcomer which could severely hamper Emirates' continued expan sion. As a long-established carrier, Gulf Air has an excel lent network of feeder routes within the Gulf, and Emirates Airlines is encountering major political obstacles establish ing one of its own. Gulf Air's shareholders include the governments of Oman, Qatar, Abu Dhabi, and Bahrain, and they are proving extremely reluctant to grant landing rights to their com pany's major local competitor, particularly when Gulf Air is under such financial pressure. Emirates Airlines—and the Dubai royal family—have been working hard to resolve the problem, however, con centrating their efforts on the two Gulf Co-operation Coun cil states which are not Gulf Air shareholders. It is under stood that agreements are imminent for the start of services to Kuwait and to Dhahran in Saudi Arabia. FLIGHT INTERNATIONAL, 24 October 198
Sign up to
Flight Digital Magazine
Flight Print Magazine
Airline Business Magazine
E-newsletters
RSS
Events
