Emirate Airlines to become Largest Operator Wide-body Aircraft by 2015

Emirates Airlines, Dubai’s flagship carrier, is on track to become the world’s largest operator of wide-body aircraft by 2015, Boston Consulting Group said Thursday.

The largest carrier by international traffic is forecast to grow its capacity by 9 to 12 percent annually through to 2015, the research group said in its report ‘Middle Eastern Megacarriers: Gaining Altitude’.

Emirates has “nearly tripled capacity and passenger revenues over the past five years, adding 32 new destinations while improving aircraft utilisation, load factors, and yields,” analysts wrote.

“The specific growth rates will depend on how quickly the airline retires some of its older aircraft — to become the world’s largest operator of wide-body aircraft.”

With a fleet of 157 aircraft and the largest A380 operator in the world, Emirates currently flies to 114 destinations in 67 countries.

Despite Emirates’ cash margins decreasing from 28 percent to 23 percent during the past five years, BCG believes that the performance compares better than other international airlines.

Emirates is not the only carrier in the Middle East that is expected to see strong growth over the next five years. Airlines in the region are expected to triple their passenger capacity over the next 20 years, according to BCG.

Passenger flows to and from the Middle East are expected to increase by another 45 million passengers over the next five-year period, from 2010 through 2015.

“Because the Middle Eastern megacarriers have been early developers of the region as an important hub for long-haul routes—and because they enjoy significant cost advantages—they are well positioned to compete aggressively with more financially constrained carriers,” said Rend Stephan, Partner & Managing Director in BCG, Middle East.

Middle East airlines saw a 9.7 percent increase in demand in July, outstripping the 8.9 percent capacity increase, the International Air Transport Association (IATA) said earlier this month.

Qantas Airways Plans Expand Flight Service to Asia

Qantas Airways Ltd. Chief Executive Officer Alan Joyce switched the airline’s focus to Asia with plans to start two new carriers, betting on the region’s growing prosperity to end losses at international operations.

Australia’s largest airline will form a Japanese budget carrier and an Asia-based full-service unit, while handing some Europe services to British Airways, it said in a statement today. Qantas will also order as many as 110 Airbus SAS A320s, including 78 of the revamped neo version, it said.

The Sydney-based carrier will cut 1,000 jobs and delay the delivery of six Airbus A380 jets under its plan to reverse A$200 million ($209 million) in annual overseas losses. Qantas intends to pare its reliance on the Australia-Europe route after losing market share to Emirates Airline and because of rising demand in Asia.

“The growth is going to come from Asia,” said Nachiket Moghe, an analyst with Morningstar Inc. in Auckland. “The passenger numbers from there continue to grow strongly and airlines need to position themselves for that.”

Qantas fell 0.3 percent to A$1.525 at the 4:10 p.m. market close in Sydney, after earlier gaining as much as 4.9 percent. The stock has fallen 40 percent this year compared with a 10 percent drop in Australia’s benchmark S&P/ASX 200 index.

The airline’s budget unit Jetstar will form a low-cost carrier in Japan with Japan Airlines Co. and Mitsubishi Corp. Jetstar Japan plans to start domestic flights from Tokyo’s Narita and Osaka’s Kansai airports by the end of 2012 with a fleet of Airbus A320 jets. It will operate 24 planes within its “first few years,” Qantas said. Jetstar already has ventures in Singapore and Vietnam.

Singapore, Kuala Lumpur

Qantas hasn’t decided where to base the new Asian carrier, which will have a different brand, Joyce told reporters in Sydney today. Singapore and Kuala Lumpur are potential hubs for the venture, in which Qantas will likely have a large minority stake, he said.

“As a nation we used to fly over or via Asia, on our way to Europe,” Joyce said. “Now, we fly to Asia, both for business and relaxation.”

The Asia-Pacific region will be the most profitable aviation market this year, helped by economic growth in countries like China and India, the International Air Transport Association forecast in June.

On European routes, Qantas will scrap services via Bangkok and Hong Kong. Instead, it will focus on flights via its Singapore hub using A380s. British Airways will take travelers from Bangkok and Hong Kong to London and lease some slots at Heathrow from Qantas.

Qantas will offer voluntary redundancy packages as it cuts jobs, Joyce said. A cabin-crew buyout announced in June attracted about 400 workers.

‘Intend to Fight’

Qantas’ long-haul pilots union and a labor group representing check-in, clerical and information-technology staff criticized the plans for the cuts and the new carriers.

“We intend to fight this,” the Australian Services Union, the largest employee grouping at Qantas, said in an e-mailed statement today. “The ASU believes significant numbers of its members will ultimately be affected by this announcement.”

Transport Minister Anthony Albanese said the job losses were “regrettable.” He said he plans to enforce rules governing Qantas, such as requirements for a majority Australian ownership, a main operation base within the country and a board two-thirds comprised of local citizens.

Restructuring Costs

The restructuring will cost at least A$350 million, Chief Financial Officer Gareth Evans told reporters in Sydney today.

The company’s forecast for pretax earnings between A$500 million and A$550 million in the 12 months ended June is unchanged, it said. Qantas reports audited earnings on Aug. 24.

Qantas will delay six on-order A380s by at least five years, with deliveries only starting in the year beginning June 1, 2018 at the earliest. The airline will have 12 of the double- decker planes by the end of 2011. Two more will be handed over before June 2018. The airline will also upgrade nine Boeing Co. 747-400s by the end of next year.

On Americas routes, Qantas will switch its South American flights to Santiago from Buenos Aires to boost cooperation with Oneworld partner LAN Airlines SA. The Australian carrier also intends to develop its partnership with AMR Corp.’s American in the U.S.

“We cannot fly our own aircraft to every port, but we will get our passengers wherever they want to go,” Joyce said.

Emirates Airlines Adds New Flight Service to Copenhagen

Emirates airlines launched today its non-stop daily service to Copenhagen, thus entering into the brand new territory of Scandinavia.

Aboard the inaugural EK 151 from Dubai were Richard Vaughan, the airline’s Divisional Senior Vice President, Commercial Operations Worldwide; Salem Obaidalla, Senior Vice President, Commercial Operations, Europe ‘&’ Russian Federation; Pradeep Kumar, Senior Vice President, Cargo Revenue Optimisation ‘&’ Systems and Luc Delcomminette, Vice President, Arabian Adventures.

Their guests on the first flight included Claus Rubenius, founder of RUBENIUS; Jens Lund, Chairman of the Danish Business Council in Dubai; Lars Oestergaard Nielsen, Managing Director, Maersk Kanoo (UAE) and an international media group.

“Copenhagen brings a new and exciting dimension to the Emirates’ network,” said Richard Vaughan, Emirates’ Divisional Senior Vice President, Commercial Operations Worldwide. “Emirates’ passengers from Scandinavia no longer need to travel to Germany to join our flights. They can travel directly from the Danish capital all the way to the Far East and Australasia, via our ultra-modern hub in Dubai”.

The Dubai-Copenhagen route, the airline’s 114th destination, will be served by an A330-200 in a three-class configuration. Up to 17 tonnes of cargo can be carried in the belly-hold of each flight.

“This new link opens up Scandinavia for Emirates on the cargo side too,” said Pradeep Kumar, Emirates’ Senior Vice President, Cargo Revenue Optimisation ‘&’ Systems. “We have been sending in freighters to Gothenburg in Sweden since 2003, but this additional channel, feeding into our vast and efficient network, will be welcomed by importers and exporters by offering more frequencies and cargo capacity.” In the cargo hold going into Copenhagen today were garments, fruit and vegetables from the Indian subcontinent. On Emirates’ first flight out of Denmark, pharmaceuticals are being exported to Australia and the Middle East, along with seafood bound for the Far East.

After touching down in Denmark under the command of Danish Captain, Lars Schoyen, Copenhagen Airport arranged for a water cannon salute before the VIP delegation joined a welcoming reception inside the terminal. Teddy Zebitz, Emirates’ Area Manager Nordic Countries, led the proceedings, attended by Sheikha Najla Al Qassimi, the UAE’s Ambassador to Sweden; Per Tangsgaard Jensen, Danish Consul General to Dubai, Copenhagen Airports and other guests from the travel, business and aviation sectors.

“The route is great news for the many Danish and Scandinavian businesses that are operating in the growth markets of Southeast Asia, India, and Australia. It will also help attracting both business travellers and tourists to Denmark,” said Carsten Noerlund, Vice President, Sales and Marketing, Copenhagen Airports.

“Emirates daily route, via Dubai, opens up South Asia, Australia and Oceania for Denmark and southern Sweden. It gives businesses here significant benefits and will facilitate their access to new markets and encourage further internationalisation,” said Lars Bernhard Joergensen, CEO of Wonderful Copenhagen and chairman of the route development programme, Copenhagen Connected.

Emirates Airlines Launch Flight Service to Malaysia With A380 superjumbo

Emirates Airline said on Tuesday it was to add Kuala Lumpur, the capital of Malaysia, to its list of destinations served by its A380 superjumbo.

The giant plane will start services to Kuala Lumpur on December 1, the Dubai-based carrier said in a statement.

Emirates’ partnership with Malaysia began in October 1996 when the airline launched its services to Kuala Lumpur via Dhaka.

By 2006, the airline connected Dubai and Kuala Lumpur non-stop and today operates 21 non-stop flights a week between these two important cities.

The Emirates A380 arrival will be the first scheduled A380 service to Malaysia by any airline, the statement added.

Richard Jewsbury, Emirates’ senior vice president, Commercial Operations Far East & Australasia, said: “Emirates has always been committed to Malaysia and the launch of the A380 on the route follows strong and increasing demand, not just from business travellers, but leisure travellers as well, boosting Malaysian tourism.”

Trade between Malaysia and the UAE has expanded more than three-fold over the last decade from $1.16bn in 2000 to $4.59bn last year.

The airline’s fleet of 15 A380s operate on services from Dubai to London Heathrow (double-daily), Manchester, Paris Charles de Gaulle, Toronto, Seoul, Bangkok, Beijing, Jeddah, New York, Hong Kong, Sydney, Auckland and most recently Shanghai.

The A380 announcement comes as Emirates Airline remains frustrated in its efforts to launch the superjumbo to India.

Emirates celebrated the opening of the new terminal at the New Delhi airport last year by flying in a A380 but he plane has not returned since.

India’s government has not acted on requests to change regulations that bar overseas carriers, including Emirates and Deutsche Lufthansa, from flying aircraft bigger than the Boeing 747 into the country. That rules out the A380.

The two airlines are eager to tap India’s growing travel market with the A380, the world’s biggest passenger aircraft.

Emirates Airline Daily Flight Service to Johannesburg with Airbus A380 Superjumbo

Dubai-based airline Emirates will offer a daily service into Johannesburg on the A380 superjumbo from 1 October 2011.

Emirates’ first scheduled A380 service to Africa comes after a surge in the number of South African travellers flying with Emirates – with passenger numbers up 12 percent.

“We have enjoyed a successful partnership with South Africa since launching services in 1995, and now connect our Johannesburg, Cape Town and Durban gateways to our vast global network through 42 non-stop flights each week to Dubai,” said Tim Clark, President Emirates Airline. “The very positive trends we have witnessed over the last 12 months will only be boosted by the arrival of our flagship A380 aircraft, which has set a new benchmark for air travel.”

“Our A380 demonstrates the future of aviation – both in terms of passenger experience and environmental sensitivity,” he added. “By launching the aircraft to Johannesburg, we are further underlining our commitment to serving South Africa and we anticipate very strong demand from leisure and business travelers keen to experience its unique features and unparalleled levels of comfort in the air.”

The 489-seat Emirates A380 offers 14 Private First Class Suites, 76 lie-flat beds in Business Class and 399 seats in Economy Class. First Class passengers have access to two Onboard Shower Spas, while all premium passengers on the upper deck can socialise at 40 000 feet in the Onboard Lounge. Beverages and bar snacks are served once the aircraft reaches cruising altitude – all the way until descent.

The A380 service will operate daily as EK761, departing Dubai at 04h40 and arriving at O R Tambo International Airport at 10h50. The return flight, EK762, departs Johannesburg at 14h10 and arrives in Dubai at 00h10 the following day.

The arrival time of the A380 in Dubai will offer passengers from South Africa convenient connections to an extensive range of destinations within Europe, which following the 1 June launch of Geneva and the Copenhagen launch on 1 August, will stand at 27.

Emirates currently operates a three times daily service to Johannesburg, a double-daily service to Cape Town and a daily service to Durban; while the airline’s fleet of 15 A380s operate on services from Dubai to London Heathrow (double-daily), Manchester, Paris Charles de Gaulle, Toronto, Seoul, Bangkok, Beijing, Shanghai, Jeddah, New York, Hong Kong, Sydney and Auckland.

Emirate Airlines Group Concerned Other International Flight Destination as Increase Passenger Number and Earning

Dubai-based Emirates continues to cause concern for other international airlines as it announces a 14 per cent increase in passenger numbers and a 52 per cent jump in profits. While other carriers are being hammered by rising fuel prices, the Middle Eastern carrier appears to be weathering the storm remarkably well.

Competitors have been accusing Emirates and its neighbouring UAE airlines of effectively being subsidised for some time now and are also worried that fleets of superjumbos based in the Gulf will draw traffic away from their hubs. Emirates currently has an order for 90 additional Airbus A380s with the European manufacturer. Airline experts are warning that once in service this fleet will force a radical restructuring of the industry.

Sheikh Ahmed bin Saeed al-Maktoum, the airline’s chairman, admitted that the carrier’s growth was likely to upset the competition. He added that the market was there and that Emirates would continue to grab its share because it had the right product with which to do so. He went on to say that the airline intended to concentrate on Asia and the Americas.

A number of European and North American airlines have already voiced their concerns about Emirates’ rapid expansion. Germany’s Lufthansa has requested that landing slots are denied to the Dubai giant when a new airport opens in Berlin. Last year, Canada refused to grant permission for greater access to Emirates and Etihad.

Tim Clarke, Emirates’ president, has shrugged of complaints from competitors pointing out that if they used the energy they were putting into attacking his airline into running their own companies, they would probably make some money.

Emirates Airline Plans to Increase flights to Australia to 100 Flight Weekly

Dubai flag carrier Emirates Airline hopes to increases its flights to Australia to 100 a week, after seeing a 52 percent rise in profit for the year to $1.5bn.

The Arab world’s largest airline currently operates 70 flights a week to Australia but sees opportunity for further expansion, said chairman Sheikh Ahmed bin Saeed al-Maktoum.

“We are entitled to operate about 85 flights to Australia under the bilateral, When we meet that I am sure that we try to bring it to 100,” he said.

Emirates would require permission from Australian travel authorities to increase capacity.

“I hope Australia will not mind because it is good business for both of us,” Sheikh Ahmed said.

Emirates, which saw off surging oil prices and political unrest to post a 25 percent rise in revenues for 2010 of $14.8bn, has drawn fire for its ambitious expansion plans. Rival western carriers claim Gulf airlines use unfair subsidies and state funding to finance aircraft deals and draw long-haul traffic into their hubs.

Canada’s refusal to grant new landing rights to Emirates and Etihad spiralled into a diplomatic row between the two countries last year.

In Germany, national carrier Lufthansa has lobbied its government to deny Emirate’s additional landing slots at Berlin’s new airport, while British Airways has also criticized the Dubai carrier’s expansion plans.

Emirates took delivery of eight new aircraft during the year, including seven of its flagship A380s. The airline has a further $13.4bn worth of aircraft on order and plans to increase its fleet to eventually include 120 A380s superjumbos.

Capacity between the UAE and Australia has surged over the last decade, with Emirates operating just four flights a week to Australia when it launched the route in 1996.

In February Australia’s competition watchdog cleared the way for the country’s no.2 airline Virgin Blue to tie-up with Abu Dhabi’s Etihad Airways for five years, giving Virgin Blue a firmer footing in its plans to expand on international routes.

Emirates said it carried 31.4 million passengers in 2010 and its passenger load factor stood at 80 percent for the 12 month period.

Emirates Airlines Group Reported Earning Rise 51 percent

The Emirates Group has reported record yearly profits, defying a tough economic climate to generate a $1.6 billion net profit in 2010-11.

The figures show a 51.9 per cent increase in profits from the previous year, and make this the 23rd consecutive year of profit for the group, which includes the airline Emirates as well as travel service provider dnata. In a statement, the group said it had continued to “push the boundaries of aviation, questioning the norms and advocating for open and fair competition.”

His Highness Sheikh Ahmed bin Saeed Al Maktoum, the chairman and chief executive of the Emirates Group, credited the company’s success to its ability to adapt to the changing conditions. “Despite unforeseen challenges in the form of political instability and shocking natural disasters we have managed, through sheer determination, nimbleness and quick thinking, to produce our best ever result,” he said.

“With political instability across parts of the world coming to the fore in the second half of the year, Emirates was able to swiftly adjust flight schedules, redeploying aircraft to balance the network and optimise revenue,” added Sheikh Ahmed. “The airline’s notable ability to drive revenue, in the midst of an unstable business environment, enabled it to partially shield itself against a dramatic increase in fuel prices in the second half of the year.”

The Emirates Group’s revenue grew by 26.4 per cent year on year, reaching $15.6 billion in 2010-11. The airline Emirates recorded revenues of $14.8 billion, showing growth of 25 per cent on the previous year.

Emirates provide short and long haul flights to over 100 destinations worldwide and specialises in business and cheap flights to Dubai, Egypt and other Middle Eastern hubs.

Emirates Airlines Order More Airplane for Increase Flight Place Destination

Emirates Airlines plans to fly to more places and order more planes, ignoring claims of unfair competition from rivals, the airline’s chairman said on Tuesday.

The airline’s aggressive expansion has been criticised by European carriers who say the Dubai-based company and other Gulf carriers are effectively subsidised, provoking fears that Gulf-based superjumbos will draw traffic from their hubs.

Emirates, which is state-owned, will soon fly to “several hundred destinations” from 111 locations now, Emirates’ Chairman Sheikh Ahmed bin Saeed al-Maktoum said after the airline reported a 52-percent jump in 2010 profits.

“I’m sure this will make a lot of people unhappy but the market is there to grow. Airlines in Europe don’t want to see us there because we are giving them competition. But we get good market share because of the product,” he said.

“We have big plans. We will operate more to North and South America and also Asia,” he added.

Sheikh Ahmed indicated that Emirates would announce new aircraft orders at the Dubai Airshow in November.

Dubai has led the charge in a war of words between North American and European carriers and their Gulf rivals over subsidies, export credits and landing rights, blaming their woes on “parasitic” taxes.

“If they spend as much time running their business as they do trying to run us down they might make even more money,” Emirates president Tim Clark said last year.

The UAE failed to gain greater access for Emirates and Abu Dhabi’s Etihad Airways in Canada last year, leading to tension between the two countries.

Meanwhile, German airline Lufthansa (LHAG.DE) has asked that Emirates be denied landing slots at Berlin’s new airport.

Emirates is the largest customer for the Airbus (EAD.PA) A380 superjumbo and has so far ordered 90 of the aircraft. It plans to increase its fleet to eventually include 120 A380s, from the 15 it currently flies.

That could turn the European aviation market upside down.

“If Emirates continue to execute as they have done they will force a restructuring of the industry simply by deploying the 90 or so A380s they have on order or in service,” Sudeep Ghai, a partner at London-based Athena Aviation, said.

“Expect other markets to start making even more protectionist noises than they have been in defence of their local carriers.”

Emirates Airlines Reported Full Year Profit Increase 51.2 percent as Premium Travelers Traffic Growth

The parent of Emirates Airline on Tuesday reported a 51.2% rise in full-year profit as the world’s largest international carrier by traffic saw business from premium travellers return to pre-crisis levels.

The Dubai-based airline shrugged off the impact of turmoil in the Middle East and North Africa as traffic through its hometown hub surged, with double-digit gains in both passenger and cargo volume.

Emirates’ rapid expansion and huge order book–at $66 billion it accounts for 10% of outstanding commercial business at Airbus and Boeing Co. (BA)–makes it a key barometer of the global airline industry.

The airline’s operating margin of 9.9% in its fiscal year to Mar. 31 topped almost every other large international airline, and the record earnings saw a four-fold rise in the bonus paid to staff to an equivalent of 12 weeks pay, pushing labor expenses up 20%

“We are fortunate to be based in the Middle East where regional passenger seats grew by 17.8% compared to a global 8.2% growth,” said Sheik Ahmed Bin Saeed Al Maktoum, chairman of the state-controlled group.

Sheik Ahmed said profit would have been AED1 billion ($272 million) higher had it not been for the increase in oil prices, with fuel expenses last week accounting for a record 43% of operating costs.

Transfer traffic through Dubai accounts for around 60% of the airline’s total business, with passenger numbers up 15% to 31.4 million over the past year, and cargo rising almost 12%.

Emirates and rivals such as Abu Dhabi-based Etihad Airways and Qatar Airways have capitalized on their geographical location to use new long-range aircraft to funnel business through their hubs.

Nigel Page, Emirates head of the Americas, said the airline has leveraged changing trade patterns to capture business, with flows to and from Africa now going through the Gulf rather than via European airports.

The Americas was Emirates’ fastest-growing region last year with revenue up 37.9% while sales in its largest geographical area of operations–east Asia and Australiasia–rose by 30.9%.

Business in the Gulf and the Middle East was still up 14.2% despite regional turmoil which saw flights to Tunisia temporarily halted, while Libyan services remain shuttered. Flights to the Ivory Coast resume on May 12.

Page said the regional problems had actually helped Dubai’s financial recovery after its own debt crisis as companies relocated staff to the emirate.

Emirates Group reported net profits of AED5.46 billion in 2010/11 compared with AED3.62 billion a year earlier, with revenue–which includes its airport and travel arms–up 29 at 53.1 billion.

The airline unit’s passenger seat factor, a key measure of capacity utilisation, rose to a record 80%, from 78.1% in the year before, with profit rising to $1.5 billion from $964 million on a 25% rise in revenue. Capacity rose 15.8%.

Emirates expect delivery of six Airbus A380s and 13 Boeing 777 planes this year, while four new routes will be added: Geneva, Copenhagen, Buenos Aires and Rio de Janeiro. It is the largest operator of both aircraft types.

Last week, Sheik Ahmed said the government-owned airline is in no hurry to sell shares to the public. He said the decision on whether to launch an initial public offering rests with the government, but ruled out any IPO in either 2011 or 2012.

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