Emirates is looking to South America, the only continent besides Antarctica it currently does not fly to, as it continues to chalk up double-digit growth figures and healthy profits.
The Dubai-based carrier, which in late April reported a 22% increase in traffic and a 30% rise in revenues for the year ending 31 March to 29.8 billion dirhams ($8.1 billion), plans to grow by another 15% in the new fiscal year. Executive vice-president commercial operations worldwide Ghaith Al Ghaith says the focus this year is extending the network to new far-flung destinations such as Houston and São Paulo, which can only be reached from Dubai using the airline's new Boeing 777-200LRs.
"What is significant here is our new plans to go to South America. That is a new frontier and builds on the success of what we've done in America and Australia with the long-haul operation," says Ghaith. He points out that Brazil is the world's third largest emerging economy after China and India and that Emirates "will be one of only a few airlines that operate to all three of these new economies".
He is confident the new São Paulo service, which will begin in October, will be successful and lead to more flights to Brazil and elsewhere in South America. "Argentina is on the cards," Ghaith reveals. "South America is opening a new continent of opportunity for us."
He adds Emirates, as part of its balanced approach to network expansion, will not open more than one route to South America this year, but will add flights in all directions from Dubai. It will take advantage of newly available traffic rights to Australia and will add flights to Africa, China, Europe and the USA.
Emirates only began serving Beijing last year but will add a second flight this year as well as a second flight to Shanghai. "To me China is a huge opportunity. We will consider even more flights," Ghaith says. "Africa will continue to be a focus for us. We'd definitely like to do more to Africa this year."
In the USA, Emirates has been eyeing Los Angeles and San Francisco for several years but last year opted to instead add a third daily flight to New York, and this year selected Houston as its second US gateway. "We only could add one route to the USA and we chose Houston," Ghaith explains. "The West Coast is definitely on for next year."
He complains Emirates does not have enough new aircraft to launch more routes: "Dubai has become the centre of the world really. As a network planner you can pick any city and say fly to this place and it will work. Failure is very strange."
In its last fiscal year Emirates grew capacity by 23% and expanded its network from 85 to 89 destinations. Record profits of 3.1 billion dirhams were generated at the airline, boosting profits for the Emirates Group by 24% to 3.5 billion dirhams. Airbus A380 delivery delays have pushed the capacity expansion figure down to 15% this year, but Ghaith says it will go back to about 20% in 2008-09 as the A380s finally arrive.
The first of 47 A380s will be delivered in August 2008 and be used to boost capacity to New York, London and Australia. The carriers recently added four more A380s to its orderbook. "Extra capacity isn't an issue," Ghaith says. "If you add 100 seats we can fill them no problem. We have many markets underserved now."
India and some regional markets are particularly underserved but this could change if bilaterals open up, allowing Emirates and competitors to add service. "Here we were born from the open skies environment. Even if it [regional open skies] hurts us we will learn to deal with it because down in our hearts we feel it's good for us. A lot of airline executives are not honest. They look at themselves in the mirror and say it's not good. But open skies is good for every country."
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Source: Airline Business
