Feb 11, 2013

Emirates A380 hub, right jet, right place, right time

It is reasonable, looking at the new A380 hub at Dubai, to predict that in 10 years time, Emirates will be a much stronger brand in Australia than Qantas.

Ben Sandilands — Editor of Plane Talking

Ben Sandilands

Editor of Plane Talking

Fully operational today, the Emirates A380 hub at Dubai

The video casts, and the numbers, coming out of the Emirates A380 hub at Dubai today are dazzling.

As Emirates president Tim Clark, said on the occasion of the 20 berth A380 ‘concourse A’ facility now being fully opened, the giant airline will grow its revenue between 18-20% this financial year, ending 31 March.

Clark didn’t give away any profit guidance in his reported comments, that while no doubt also stellar, will reflect the impact of fuel costs, in a currency which is pegged to the USD.

Concourse A can simultaneously handle 20 of the 31 A380s currently in service with Emirates, all of them offering at least 489 seats, with the premium seats on the upper deck and the 399 or more economy seats on the lower deck all accessed directly from the lounges or general boarding gates.

The capacity and efficiency of the A380 hub should improve the passenger experience of Dubai airport, which can at times seem drastically overcrowded, and as Clark has hinted at times both recent and past, Dubai’s airport infrastructure is critical to its efficient use by Emirates, which has a further 59 A380s on firm order and is discussing additional orders, perhaps of larger capacity versions of the giant Airbus, to bring total orders for the type to 130 units.

Part of the answer to this problem is clearly the second more distant Dubai airport which is being built in stages to become the world’s largest aviation centre, not only taking flights by most of the other 125 or so airlines that use the current airport but large scale maintenance, overhaul and repair or MRO facilities for all comers.

Ultimately, the current airport will become something like a 99% Emirates airport, with cameo appearances by the jets of closely associated carriers, such as Qantas, which in its soon to be finalised business relationship with Emirates, will rotate its twice daily A380 services to London, one each bound to or from Sydney or Melbourne, through Concourse A from 1 April.

Emirates is not just the world’s largest operator and buyer of A380s, but Boeing 777s (most of the newest ones being -300ERs with some -200LRs). It has started it own big jet food chain, in that routes that begin as A330 or A40 services migrate upwards to the capacity of 777s, and when those hit the limits of slots available at airports like London, Paris and in due course Sydney, are in turn replaced by the biggest Airbuses.

It is from the perspective of Emirates an enormously successful business plan, as the A380s and 777s can fly non-stop between Dubai and anywhere on the planet with the right runway non-stop, but according to Clark, with the exception of Papeete in Tahiti.

Emirates does fly a small number of routes where it makes intermediate stops, for example between some Australian cities and ports in Asia, and to Auckland and Christchurch, because in each case, there is an opportunity to make money out of passengers or air freight on specific routes.

There is a massive geo-economic strategy at play in Dubai in that it has sought, so far with immense success, to make itself a global aviation and maritime hub, and attract investment in high value industries through tax free, or nearly tax free, financial arrangements.

Dubai is Singapore, writ even larger, with enormous geographically convenient growth centres at hand in central Asia, eastern Europe and most of Africa and the Middle East.

The premise of this strategy is that economic growth brings jobs and a quality of life and opportunity that will bring lasting stability.  Despite some relentless criticism down the years, and frequent forecasts of economic disaster, the plan, as spectacularly made apparent at Concourse A, is working.

But, but … will the Qantas-Emirates business partnership work?  It will undoubtedly work for Emirates, but it also means that Emirates, which was ferociously slandered by Qantas managements present and immediately past, has now been embraced as the replacement for Qantas flown services between Australia and Europe, and places Qantas in its anglo-centric world view, never gave much recognition to, for anyone flying to or from Brisbane, Adelaide and Perth.

The Qantas Emirates deal is open to the criticism that it is a cop-out by Qantas, and suits an apparent agenda to shrink the full service international brand to a core operation, and leave the risk and rewards of developing entirely new sources of inbound leisure and business flying to this country to Emirates.

It also seems to make the assumption that displaced Qantas customers, including to places in Asia served on the way to Dubai by Emirates, will obediently now take their business to Emirates.

This may not be the case, and if it is the assumption, it is insulting. There is no doubt that in its A380s Emirates is an outstandingly attractive competitor, but its 777s are a different matter in that the same amenity or spaciousness of product found in economy and business in the A380s is not available in the Boeings.

Perhaps it will be in the future. Emirates itself is very aware of the competitive challenges of other airlines on routes not just to Australia but Asia. The Qantas-Emirates partnership is a gold plated opportunity to already strong operators in the Australia market such as Singapore Airlines and Cathay Pacific, and the more recent entries into the Australia stakes by Etihad and Qatar Airways, to intercept the pass from Qantas to Emirates and make their own dash to the try line instead.

The biggest benefit to Australia in the strength of Emirates comes from its understanding and embrace of new sources of travel to this country from eastern Europe, from secondary even tertiary cities in western Europe, from Africa, and from central Asia.

But Emirates will have to compete furiously with other airlines for those new markets, and to be blunt, they were never markets that anyone in executive power in Qantas ever showed the faintest idea of recognising and understanding since the Australian icon was floated in 1995, and earlier.

It isn’t unreasonable to predict that within 10 years Emirates will not just be much stronger in the Australian market than it is now, but it’s flights will predominantly be full of non-Australia originating travellers, attracted to one-stop services via Dubai from Slovakia,  the rest of the UK and France and Germany beyond London, Paris and Frankfurt, and from Petersburg and Sochi not just Moscow among other cities.

Within a decade, Emirates, and perhaps Singapore Airlines, could be stronger brands in Australia than Qantas.


Leave a comment

6 thoughts on “Emirates A380 hub, right jet, right place, right time

  1. Bill Parker

    “A380s and 777s can fly non-stop between Dubai and anywhere on the planet with the right runway non-stop, but according to Clark, with the exception of Papeete in Tahiti.” Is that so?

    Maybe not Perth for the A380. We have the runway but not the airbridge so unless the passengers are expected to climb up and down some external stairs, that’s WA (“Wait Awhile”).

  2. patrick kilby

    Good analyis Ben and one which I am sure QF is aware of and is earnestly hoping for some luck vis as vis 789s coming on time, and some opening up of a protected East Asia which it is is pushing on. I suspect QF will focus on the Asia Century and let Emirates cover Europe except for London and maybe a couple of (German?? or French if they open up??) ports with 789s.

    In terms of predictions (as bloggers here occasionally make bleak ones)by around 2020-2025 we should see QF international with 24 A380s (mostly to the US but also to SA and Latin America and UK); 10-15x789s for long range continental Europe and US; 10-15×787-10s for Asia.

  3. Achmad Osman

    I have flown the big E over the years and have no issues with the service – except in one case, where the B777 had what appeared to be a domestic pitch. Not great for an 8 hour flight. My big issue is the long wait at Dubai and flying at very odd hours. Landing at Dubai at 00:00 and waiting around for a 04;00 flight is not pleasant in anyone’s language.
    I have since switched to direct flights when-ever possible and which is a better experience especially no that the planes are no longer as full with punters streaming to Emirates and Etihad.

  4. patrick kilby

    Do note though Achmad there are plenty of connections there with >3 hours before 3.00am and also an EK A380 (QF badged) late at night out of Syd into Dubai at 5.00am for a 7-8am connections – no problems with that. It is the time of arrival not the time of transfer which is the big issue here.

  5. keesje

    If the successful alliances from the nineties mean anything, Australia will prodominantly be served by red tails. It makes sense from a branding, costs; crew bases, salesnetwork and operational efficiency standpoint. QF would service DXB from all Australian places with suitable equipment and frequencies. And do its own Asian and Pacific operations.

    Is essential the products of QF and EK have the same customer value. Doesn’t mean they have to be exactly the same ( local flavors are appreciated by passengers), but a passenger won’t complain if he end up in a QF or EK machine unexpectedly. lt must be seamless. Both e.g. 4 class cabins, seat dimensions, lounges, FF benefits etc.

    As I said before QF has a hole in their fleet composition and I expect them to fill the 300-350 seat long haul gap ASAP. Boeing caused them enormous damage so I gues Leahy’s team is working out scenarios. Just A350s would be to few too late.. Likely QF will do creativity sessions with EK fleet managers.

  6. Aidan Stanger

    Ultimately, the current airport will become something like a 99% Emirates airport, with cameo appearances by the jets of closely associated carriers, such as Qantas, which in its soon to be finalised business relationship with Emirates, will rotate its twice daily A380 services to London, one each bound to or from Sydney or Melbourne, through Concourse A from 1 April.

    I think that’s unlikely to be the ultimate situation – once the agreement expires, what would EK gain from extending it? If EK ultimately gets 99%, the 1% will be those at the very top of the market, willing to pay a super premium to enable their luxury/supersonic services to directly connect with all EK flights.

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