Amid a slowing global economy, it is perhaps unsurprising that Emirates Airline president Tim Clark sees “difficulties” on multiple fronts.
There are issues with demand in South America, and the collapsing peso in Argentina. Asia faces problems, with the unrest in Hong Kong hardly helping. And in Europe, a damaging Brexit threatens to have an “arresting effect on demand”, Clark warned at the World Aviation Festival in London.
“Going forward the global economy is likely to contract, or its rate of growth will slow. That will have an effect on the demand for travel,” says Clark.
Yet his outlook remains overwhelmingly positive. “We’ve kept our heads above water,” he proclaims. “I am pleased with our performance to date and I think our first-half results will reflect that in a few weeks’ time.” Emirates appears to have taken even the six-week long closure of one of Dubai airport’s two runways in its stride.
Clark sees reasons to be cheerful. Brexit or no Brexit, he notes that the UK market has remained incredibly strong. “We’ve been growing our business here by about 6-8% every year, despite the problems and the currency depreciation.”
Emirates now runs six Airbus A380s a day into London Heathrow and three into Gatwick, “and they’re all running at 93% [capacity] – and don’t forget each of these Gatwick A380s are 615-seaters”, Clark points out. Out of the 22 countries in Europe that Emirates serves, the UK represents 20% of the airline’s production and 55% of its profits, making it the “jewel in the crown”.
Other key markets are also proving resilient, and there are plans to increase capacity to the USA, and the number of airports in the country served by Emirates.
Yet, mindful of challenges on the horizon, Emirates is preparing for leaner times. It recently underwent a root-and-branch network review. “The assessment of that was the Emirates network is a robust one. It has real value; it will continue to develop value.”
However, the airline has taken action to tweak its operations in Asia and the Middle East, based on where the integration of subsidiary Flydubai can open up new smaller-capacity routes on Emirate’s behalf. “That’s been going apace, and quite successfully now,” he says. “Where you see flatter growth in terms of production and new aircraft coming in, it’s the result of seeing where we can integrate… the network of Flydubai into ours a little more smartly.”
Efforts to optimise through artificial intelligence and digital platforms have, says Clark, enabled Emirates to retain and reduce costs per seat-kilometre even as the network has grown. The result is a significant rise in yield per seat over the past few years.
In terms of the airline’s fleet, the A380 will still be flying with Emirates until the mid-2030s, notes Clark, but the oldest two to three aircraft “are starting” to be retired. “We will use bits and pieces of those for work that we have to do on the other aircraft,” he adds.
Of the on-order 777X, he says: “We expected it in June next year, which is not likely to happen now, but it’s going to be a beautiful aircraft.”
Premium economy is also coming to the airline. Although this is something that its competitors have offered for some time now, Clark is confident that its own version will still impress: “As it’ll be premium economy Emirates-style, it’ll be pretty good.”
Source: Cirium Dashboard