Emirates ponders route cuts in ‘tough year’566 views
DUBAI: Emirates president Sir Tim Clark says the first half of 2016 has been “tough” for the airline as it grappled with ongoing currency fluctuations, political uncertainties and security concerns.
“Look at what’s happened since June to the pound, as well as the rupee and dollar,” he said to reporters at the World Passenger Symposium in Dubai. He anticipates load factors in the mid 70s/low 80s for the last quarter.
“There are some strong points and quite weak points. We have cut flights from certain African countries and we’re reflecting on a number of destinations and having a look at where it’s not worth to travel – there aren’t many of those – but we could cut frequencies and possibly cities if it carries on.”
In a revenue-boosting move, Emirates introduced charges for seat selection on Economy class special and saver fares this month and Clark said it would focus more on its distribution channels.
“I want to see a shift more into the B2C world,” he said. “What you’re seeing here today is a shift, recognising that the online world rules. If you don’t do that, you’ll lose revenue.” In his opening address, he said the industry needs to innovate more and break away from “fatalistic legacy experiences”.
Emirates will not delay its deliveries, however, with 44 aircraft coming between this month and December next year. The retirement programme of older A330s, A340s and B777-200s will also continue and all will be gone by February next year.
IATA economist Brian Pearce said a pick-up in protectionism and debt problems could contribute to a low-growth future but that the airline industry fundamentals remain good and up to 7.2 billion people are forecasted to fly by 2035.
“There’s a decent chance we’ll see a relaxation of regulations which could see passenger markets treble.”