Emirates more A380’sBack to Forum
Anonymous9 Jun 2010
Pretty amazing order in such pressed economic times.
Clearly, they have a strategy to take business from other Airlines?
These Aircraft can not just be for the growing Indian or china markets.
They are encroaching into European destinations more, increasing capacity & frequency. Clearly, they intend & are taking business from the European Airlines.
The Asian Airlines like TG MH, & even SQ, are all seeing customers avoid Asia altogether, on the Europe to Australasia region. they are cutting back capacity, whist EK & EY are maximising theirs!
Slow but steady take over’s of others business!10 Jun 2010
The future lies in China and India. As more and more business (and consequently others) people travel between these countries and USA/Europe/South America, A middle eastern airlines (or Indian) has an advantage from tine zone perspective to interconnect if one is willing to have a stop while paying much less. SQ thrives on this kind of interconnection. Indian airlines ha no management desire/capacity to take that market. hence enters Emirates.10 Jun 2010
In and out of Australia, as well as 10 daily flights to Dubai, Emirates offers four daily flights to New Zealand, and one each to Singapore, Kuala Lumpur, and Bangkok, as en-route stops, but with full traffic rights.
They are a very large factor in the Australian market, and carried approximately 174,000 passengers in the latest month for which I have figures to and from Australia.
By contrast, BA carried less than 20,000.10 Jun 2010
I was in Sydney for 2 months just returned.
I also Made a trip to Auckland Air NZ, but returned on the Emirates A380. This was completely full in economy, Business!
i was pretty stunned to see all within 90 minutes, most of AKL airport was working to enable 3 Emirates flights, Brisbane, Melbourne A345’s & the A380 to Sydney. All these flights then went onto Dubai…quite a grab of the AKL & Australia market, not forgetting that these flights mostly are by-passing Asia.
Many on the passengers were returning to Europe, clearly Not on Asian carriers or even stopping in Asia.
This is perhaps why, with Etihad & Qatar as well, that SQ, TG & MH have had some a decline in custom, and are scaling back services.
Qantas seem to be doing well, & their PE & business on the A380 well regarded & popular, with BA’s reputation & traffic getting lower (as reported in BT Magazine).
With Emirates new A380’s, as well as the forging into new European gateways, they are taking custom from other Airlines, & tourism out of Asia when flying to Australasia directly from the middle East.
Their strategy seems quite blatant, at the cost of other Airlines…22 Jun 2010
I read with interest Emirates’ plans with regard to the expansion of their fleet, but also note the detail contained therein.
The latest A380 orders will see the final examples delivered in 2017, just three years before the planned retiral of the earliest joiners of its fleet. Indeed, 58 Emirates aircraft are due to be retired in the next few years, maintaining the carrier’s modus operandi of regular renewals, so some of the new aircraft ordered will replace some of those.
It’s also interesting to look at the current route network, and also at some of the quotes coming from Maurice Flanagan and Tim Clark on their wider plans.
Firstly, the current A380 web includes Jeddah, just 3 hours from Dubai. As the Middle East and India continues to develop, it seems likely that Emirates see relatively shorthaul routes supporting A380 service on a point-to-point business travel basis, if yields will justify them.
Secondly, for a city such as Manchester to be looking forward to A380 service in the very near future, there’s a strong suggestion that the market Emirates are looking for is, among others, the Ryanair trader-upper; discretionary leisure travellers bundled up and treated to Jumeirah rather than Barcelona for the weekend, as opposed to an obvious attempt to wrest market share on a route (or from a catchment) which is not notable for particularly high-yield Business and First (currently) connecting traffic in global terms.
And thirdly, Flanagan and Clark are (I believe jointly) on record saying that they hope to use A380s to increase capacity on routes which are currently constrained by limited slot availability – Heathrow being an obvious example. Which, of course, could be read in three ways: that either all LHR services will switch to A380 to take market share; that all LHR services will switch to A380 to absorb generic market growth; or that all remaining LHR services (of a reduced number) will become A380 to maintain capacity, whilst slots are sold at a profit to take into account the reduced requirement for them with fewer, more efficient operations, and smaller aircraft are redeployed onto thinner routes.
There’s also, fourthly, the small matter of outstanding orders for 70 A350s, an aircraft type which has yet to fly. Given the delays experienced during the development of the A380, and the fact that Tim Clark threatened to cancel his A380 orders during those delays, followed by similar delays to the Boeing 787 Programme, it’s really anyone’s guess how deliveries of those A350 airframes might progress at this stage, notwithstanding any other external global or regional political and economic pressures.
Effectively switching out of some of those orders though, and into the known-quantity of the A380, but doing so by placing a headline-grabbing order before the deletions are announced, would make a certain amount of commercial sense for both the airline and the manufacturer. I have no reason to suggest that that’s the plan, but it’s certainly one that can’t be ruled out. It’s been done many times by others before.
So, whilst Emirates is undoubtedly ambitious, and whilst they have already clearly demonstrated their ability to grow rapidly, I remain somewhat more measured in my response to their latest moves and don’t definitively see them executing a game plan to take over the aviation world at the expense of other established players, with the confidence that some/many others do.
Finally, the current Australia & New Zealand situation is, to my mind, something of a red-herring. Loads are good, driven by pricing that reflects the fact that the A380 would otherwise be sat on the ground burning, rather than earning, money in Australia.
As a commercially-astute operator however, Emirates would be out of there in a flash if it could be flying the aircraft longhaul, rather than fighting a shorthaul price-war across the Tasman that makes no-one any real money. Remember that the population catchment for Auckland is a grand total of 1m people, and for the whole of North Island (which would rely on an onward NZ connection and would therefore value interlining etc) is just 3m. Of course there’s inbound traffic to consider, but if the service was demonstrably better than the incumbents; if it was valued more richly by passengers or if the route itself was a guaranteed cash-cow, then surely the fares would be at market-levels and not so deeply beneath them.
Yet here, many thousands of miles away, their presence in the Antipodes is reported regularly, proving fairly conclusively that their investment in PR is reaping rewards.
Does it make any difference to Air France or Lufthansa’s loads though? Not one jot beyond the Middle and Far East.
And are BA’s passenger numbers out of Australia relevant (or Virgin’s for that matter)? No, they’re not. BA’s revenues between the UK and OZ are driven by the Joint Services Agreement with Qantas and it’s no particular secret that BA (and Virgin) maintain their own services beyond the Far East for reasons of PR and commercial prestige (see Emirates SYD-AKL above for another example of said concept) rather than by virtue of them being particularly lucrative when considered in isolation. They’re not even particularly efficient from an aircraft utilsation point-of-view, unlike (to at least a certain extent) the EK example from Sydney.
So, whilst Emirates might be dynamic and rapidly cementing its position in World civil aviation, there are enough hints and tips from within, as well as external uncertanties without, to suggest that domination is not in any way assured or even desired and that the effect on incumbent operators is not nearly as causal as some seem to perceive.22 Jun 2010