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Jan 6, 2017

Emirates growth issues less of a crisis than poor public reading skills?

Emirates may have the world's largest fleet of A380s and 777s, but will a trade war change that?

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There are 92 Emirates A380s in service today
There are 92 Emirates A380s in service today

The undeniable fact that Emirates is facing a growth barrier as a global airline is one matter, but the reading comprehension problem that has attended some recent fair and accurate articles about its future might tell us more about the state of public discussion than it does about the variability of aviation activity.

By far the best of the stories has just appeared on Bloomberg. There is no way that a reasonably literate person would conclude that this means it is about to ‘go broke’ or cease flying, and so forth, despite the tabloid noise that is being magnified by social media.

There are risks that could wipe Emirates out, although they would involve the collapse for any of a number of political or financial or religious schism reasons of the UAE, and the Arab world, that surrounds its Dubai hub and the rival but smaller Etihad hub of Abu Dhabi, just down the at times terrifyingly driven 99 kilometres that separate each city.

The Bloomberg story doesn’t venture into those external factors, which in all seriousness, should be properly treated, and quite possibly dismissed in part, in separate reports. So far, serious in-depth analysis of the critical issues in the Middle East has not been a feature of popular western news and analysis reporting.

The triumph of click driven media has stupidified social discourse and created a new media constituency of narcissistic users largely disengaged from the geo-political events that are going to define and most likely confine their lives.

If the Middle East were to plunge considerably deeper into mayhem and chaos than it has the consequences for air travel would be of trivial concern beside the massive damage and ruin this would bring to hundreds of millions of even more lives than have been damaged so far.

Putting aside those unmentioned nightmares the Bloomberg story makes it obvious Emirates has every prospect of remaining for the foreseeable future,  a huge, high quality, and far reaching airline operating the world’s largest fleets of Airbus A380s and Boeing 777s.

But possibly not of Boeing 777-Xs, for which it has ordered 150, or about half the total orders for the type so far, should it be excluded from flying to the US as a Trump administration penalty for being too successful.

(The ME3 carriers, Emirates 150, Qatar Airways 60, and Etihad 25, have Boeing by the testicles with 235 of the 306 orders placed for the higher tech version of the 777 family, which is due in service from 2020. The support for the 777-X family by US carriers to date is zero orders, and their actual support for the current 777s has been pathetically small.)

One factor not mentioned in the Bloomberg report is the replacement component of those massive Airbus and Boeing orders placed by Emirates. The airline has said that 25 of the current tranche of 50 A380 orders are to replace aged A380s that first began entering service in 2008. In the course of the next 10 years it is likely that up to 100 of the giant and popular Airbuses will be replaced by new A380s, and later in the next decade, those jets may have lengthened fuselages, a modified wing, and newer technology engines, just as the A380s Emirates is currently putting into service can fly further and fuller than those it started acquiring nine years ago.

The standard 777s Emirates continues to put into service today are significantly more efficient than its oldest 777s, and as any jet gets ‘older’ and racks up pressurization cycles, the costs of its upkeep to essential safety standards rises to a point where replacement becomes more economical than refurbishment.

The most pressing issue regular Emirates flyers will likely notice today is that of congestion and increasingly obvious dysfunctionality at Dubai airport. That transition to the vast new Dubai World Central airport a quarter of the way to Abu Dhabi can’t come soon enough.

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20 thoughts on “Emirates growth issues less of a crisis than poor public reading skills?

  1. David Howard

    Emirates is on a crash course of ego backed spin control. Everything is always painted rosy in the sand pitt. Premium revenue has nose dived, travel demand is way down on world insecurity and economic uncertainty. Their costs are too high for a sustained survival. Wrong fleet of oversized planes and whilst the passengers may love the A380 it will be Emirates’ coffin. Disposal of the A380 is going to be a fleet manager’s nightmare. Running A380s with 65-75% loads is a recipe for economic failure. They need an airport that will operate 787 sized fleet to give some flexibility but it is too late for that. Wait for Etihad and Emirates to merge into one as a last minute attempt to save it . Dubai needs to talk really nicely to the people in AUH

  2. Dan Dair

    I suspect (but do not predict) that the presidency of DJT will either be a worldwide disaster, or will be one of the most innocuous of all time.!

    DJT seems to understand nothing of how the interdependency of nations work, not anything about the ‘you scratch my back’ culture of getting what you want by allowing another nation to get what they want.?

    IF the ME3 were to cancel their B777 orders because of US access issues, those airlines have other options;
    They can buy A350-1000/1100’s instead.
    2 of them can utilise their subsidiary/associate airlines to fly into the US anyway.! If that works-out for them, I’m sure Emirates wouldn’t be far behind them in aligning themselves (one way or another) with another airline which does have existing US access & ‘milking the tits off of it’.? (to somewhat use the vernacular)

    The B777 is the only jewel in Boeings crown.
    Everything else they make is no better, or worse than the Airbus competitor.
    The A350 is capable of challenging that status.
    Should the ME3 decide to go for A350’s instead of B777’s in the future, what’s left of Boeing could really be put-on-the-skids.
    The B787 won’t return on it’s investment for at least ten years,
    The B747 production is winding-down because it’s no-longer a commercially viable airframe,
    The B737 needs massive upgrades or replacing with a new design to compete with current & future A320/321’s Money which Boeing doesn’t seem to have.
    If the B777 was to show any sign of lacking a future (because the ME3 pulled their collective orders for two-thirds of the currently-proposed production), what would the prospects be for other airlines pulling-out too, or for Boeing to have to sell those production slots at similar loss-making prices to what Qantas bought it’s B787’s at.?

    And the starting-point of this rant isn’t about what Boeing might, or might not do,
    but about what the actions of the incoming president might have on the economic viability of Boeing & the consequent job-prospects for a million or more US citizens.?

  3. comet

    I believe the lack of effective aviation regulation in the United Arab Emirates is a threat to its airlines.

    The regulators, the royalty and the airlines are all too close. Safety is not being properly regulated. Crews are being stretched to the limits. Safety is compromised. Crashes more likely. And crashes can kill an airline. Just ask TWA.

    1. Tango

      Emirates is interesting as they staked the whole operation on VLA.
      Qatar on the other hand has a wide sized fleet.
      You are never going to see a stretched or NEO A380.
      Its moving to 777/A350 on the high end and the mix of 787 and A330 on the low end.
      What is funny is the 747 may outlast the A380.

  4. George Glass

    The A380 is a dead duck. The non-Emirates aviation industry is,and has been for along time, right and Emirates is disastrously wrong. Why they have persisted with such a ridiculously expensive airframe will make an interesting PhD project in 20 years time. Four engine aircraft are finished.Thirteen tons of Jet A1 an hour and two too many engines are a recipe for disaster. Unless you are subsidized………. Or dont care about making a profit……As many of us have been saying for years.The fat lady is clearing her throat.

    1. Ben Sandilands

      George,
      I took your views and those of others seriously enough some years ago now to ask for a proper analysis from a number of sources. Two things emerged. The proper comparison of the economics of twin engined jets and the A380 required the latter to be as tightly loaded as the former. That meant a 787-8 with 337 seats versus an A380 with more than 750. It was all but impossible to make the economy seats in the A380 small enough to match the dimensions of the Dreamliner, since you ended up with passenger’s feet not reaching the floor on the main deck if you tried to do it 11 across because you had to raise the seat rows because of the shape of the cabin at shoulder height. This might be the key to the yield premium for A380s, but only if demand remains high, and growth sustains applying larger jets, any larger jets, to a larger part of typical networks.

      The other issue was trying to take off with a full payload at a field temperature in the high 40s, something that imposes regulatory penalties on the performance of heavy big twin operations, but not four engined designs.

      I don’t think we can expect heat affected airports, and their number grows each year, to cool down in our lifetimes, although the economic argument for air travel at anything like current levels might. For the remainder of our lives, I think the problem for Emirates, and other ME carriers regardless of how many twins or quads they fly, will be the continued relevance of their hub locations. That could all go very wrong, no matter how many engines there are on their jets.

      If the muppets that have ruined the flying experience for the vast bulk of passengers in 777s, A330s and 787s, and no doubt A350s in due course, by jamming people in until they are in bone pain and unable to even fit into the dunnies, continue to prevail I think people will start to fly less, not more.

      That’s a bigger issue, at least from where I try to sit, than people getting worked up by the dead duck that might end up being around for longer than some of its critics.

    2. Karl Nielsen

      @George Glass

      The main handicap of the A380-800 is the low aspect ratio of the wing and the short body. Rectify these short-comings — in addition to new engines with at least a 20 percent lower specific fuel consumption — and you’d have something far more competitive than the A350-1000 and 777-9. It’s interesting to note that most observers seem to be oblivious to the enormous aerodynamic efficiency of the A380 double decker fuselage and that even a modest stretch would have much lower wetted area per square metre of cabin than any other aircraft (i.e. the wetted area of the fuselage accounts for a large part of the skin friction drag of an aircraft).

      What is clear, therefore, is that the current 80 metre wing span limit is a massive impediment for true VLA aircraft. If a revolutionary next generation A380 would be allowed to have a wingspan of 100 metres when parked (i.e. folding wingtips would further increase the span to 110 metres-plus at take-off), the massive economic advantages of twin-engined and/or quad powered VLA double deckers would be allowed to be played out to the detriment of smaller single deck wide-bodies.

      Now, it was not possible to design such a wing for the initial A388 with year 2000 state-of-the-art technologies. In fact, perhaps one could view the A388 as a “prototype” for the shape of things to come. Now, with CFRP composites and carbon nanostructured materials that are just now reaching a sufficient technological readiness level, it’s possible to put a massively improved wing on the A380. As most airports (outside the US and Australia) seem to be undergoing continuous upgrades and redevelopment, it only seems natural that from, say, the early 2020s there would be a new ICAO Code G (100 m wingspan) and new larger aircraft stands with a box-size of 100 m x 100 m that would, little by little, be made available for airlines choosing to operate hugely efficient VLAs.

      So, how should the A388 be upgraded?

      Wing
      1) The current aluminium A380 wing should be redesigned as a composite one.
      2) Inboard of the outer engines the re-designed composite wing should have the same outer mold line as the current wing.
      3) Outboard of the outer engines, the “new” wing should have an aft wing spar having slightly more sweep in order to accomodate a wingbox extension to 100 metres.
      4) By adding two 6 meter folding wingtips, this new A380 would have a total wingspan of slightly more than 110m.
      5) Now, aspect ratio is wing span squared divided by wing area.
      6) Wing aspect ratio for the A388 is (79.8 m)squared/845 m2 = 7.54
      7) Wing aspect ratio for a next generation A380 having a wingspan of ,say, 110 metres and a larger wing area of about 915 m2 would be: (110 m)squared/915 m2 = 13.22
      8) That’s a 75 percent increase in aspect ratio and, therefore, a roughly 35 percent reduction in induced drag, which would translate roughly to a 35 percent trip fuel burn reduction alone for just the wing improvements.

      Fuselage
      1.) The A380 has the same fuselage frame spacing as the A350 (i.e. 25 inches).
      2.) The A350 has a very similar cockpit/forward-fuselage design as that of the A380 (i.e. aluminium panels, unpressurised nose wheel bay design etc.).
      3.) The A380 fuselage could be “carbonised” in much the same way as the A350 is constructed. Thus , it would still retain the metallic cockpit section (i.e. Section 11), centre fuselage (i.e. MLG bays, centre wingbox design etc.), and the entire composite empennage section from the current A388 (i.e. including the current composite horizontal/vertical stabilisers).
      4.) The next generation A380 could incorporate three models in a “family”: A380-900 with a length of 8o metres; A380-1000 with a length of 90 metres; A380-2000 with a length of 100 metres.

      Conclusion
      A 100 metre A380-2000 would have a 60 percent larger cabin than the current A380-800. With a very high aspect ratio wing (i.e. aspect ratio increased by a massive 75 percent), engines that would have at least a 20 percent lower thrust specific fuel consumption than the current engines on the A388, and a composite re-designed fuselage and wing (leading to significant weight savings), you’d have a massive VLA that would have roughly a 10 percent lower trip fuel burn and a roughly 45 percent reduction in fuel burn per seat over that of the A380-800.

      Addendum
      The current sized A388 could be replaced by an A380 derived twin family (i.e. 700 m2 wing area, wing span of 90-plus metres – incorporating folding wingtips in order to retain the current ICAO Code F requirements. The new VLA twin family (i.e. A370X) could consist of a 70 metre long A370-800, a 75 metre long A370-900 and an 80 metre long A370-1000. MTOWs for all models should be around 450 metric tonnes. Only the short model dash-800 would have 8000 nm range, with the larger ones especially suitable for transatlantic and intra-Asian routes.

    3. Mark Skinner

      George,

      Emirates’ figures seem to say the opposite. Furthermore, Dubai, and the other Gulf States have less in the way of financial resources than Australia. In fact, the Australian superannuation sector alone has more money to invest.

      Rather, we might want to ask why it is that Australian super funds have almost zero interest in investing in Qantas?

      Put another way, if Qantas and 787s were the way forward, why aren’t investors falling over themselves?

      The Emirates figures don’t show any unfair commercial support from governments, merely that those governments are prepared to invest at commercial rates, based on Emirates’ strategy.

  5. George Glass

    Ben,
    1) Passenger comfort is an interesting concept but has been abandoned many times in the past in the face of commercial reality.Remember the Captain Cook lounge in QF B747s?Airlines will pack ’em in till the customers stay away .Hasnt happened yet.
    2) Hot and high performance is a red herring.Answer;dont go there.The great circle is shorter via Hong Kong and Singapore.
    3)Flight planning and Fleet choice 101. Four engines are required for a) thrust for takeoff ,b) redundancy.The advent of 100,000 pounds plus thrust engines with negligible failure rates changed that a long time ago.
    4)Aircraft can get too big.Many airports actually dont like having a bunch of 500+ A380s arriving simultaneously.Dubai, I reckon ,is there already. Point to point is the future.
    The A380 was a “courageous” project from day one pushed for all sorts of non- commercial reasons as a Pan European nation building exercise.Its a mistake.
    Neither Boeing or Airbus will ever design another 4 engine aircraft.

    1. Ben Sandilands

      George,
      I take your point about the reliability of contemporary jet engines. However that doesn’t change the situation between DXB and LAX and SFO, where the A380 can still take off with max payload (as configured) for a 16 hour or so flight and the 777-300ERs it replaced couldn’t, because the rules are the rules are the rules.
      The rumor for some time concerning the Qantas A380s is that the DXB-LHR leg will be cancelled, releasing two A380s that will be put on the Hong Kong route where there are in effect no more slots, and Qantas needs a helluva lot more seats than it puts in its A330s. CX has already responded to the lack of available capacity by upscaling its A330s to 777-300ERs in some cases, and apparently will make its limited Australia-Hong Kong slots all A350-1000s or 777-300ERs in the next few years.
      Since CX has unofficially indicated that all its jets will become high density LCC type formats in economy in coming years, that will certainly test the market appetite for a bigger Y class seat in this case in Qantas A380s if the rumor, which comes from within Qantas, comes true.
      Airbus has hinted to some of the tech media that come 2030s, it will be looking for radical power solutions that won’t fit into the current formats anyhow. These will involve on board generation of electrical power and a storage buffer for emergency power if the prime generator goes kaput. It seems to me, but what would I know, that 2030 might be a shade optimistic for such a radical E-fan based approach. But 2030 is I think past sunset time for me anyhow. Airbus must be on to something, because you get similar indications, although with less discussion, from Boeing, notably in the studies that were inadvertently made briefly public some years ago, of the detailed N+3 study it had done for NASA in conjunction with Georgia Tech.
      The only wrinkle in the Qantas rumor of late is that it might also be considering resuming SIN-LHR flights, presumably with more than just the first eight 787-9s it has committed to, but if you watch them carefully, they do mention versions of the A350 and 777-X in passing now and then. Probably to keep Airbus sharpening its pencils, and reminding Boeing not to take them for granted.

  6. 777 Steve

    Ben, the moment TC started talking up the 380 in the press regarding its profitability, its reliability and of course its popularity, the cynic in me came to the realisation that the reality was rather different. Fast forward 3-4 years and the metric hasn’t changed, yes on a hot day you can fill it up to go from DXB-LAX, the trouble is EK are not only struggling to fill the seats, they are struggling to do it profitably.
    Hubris, particularly Clarks has put EK into a position where the 380 isn’t the driver to growth anymore, it is now more than anything a noose that is squeezing the life out of a once agile and vibrant organisation, an organisation that has grown fat, slow and unresponsive to changes in the business landscape.
    The bigger picture at EK is not a great, multiple layers of ineffective managers, many of whom are appointed for no other reason than their nationality. Meanwhile the operation suffers from chronic under resourcing and inflexible work rules, individual initiative is a foreign and threatening concept to incompetent superiors who given their own woeful oversight and poor performance are doing everything in their power to deflect and protect their crumbling little empires.
    Throw into this mess a management mantra that rewards one department for saving $10, whilst this saving and process will actually cost another part of the organisation $40 to implement, which gives a little insight into the mess that is now EK as a business.

    1. Uwe

      The cynic in me tagged that on the 777 better than sliced bread talk years ago.

  7. George Glass

    KN,
    Interesting hypothetical.But why would you sink more cash into an airframe that already is never going to make a return on invested capital? Four engines are twice the maintenance and twice the fuel burn. Everybody but Emirates has come to the same conclusion about the A380.Its a dead duck.

    1. Ben Sandilands

      George,
      It’s nowhere near twice the fuel burn and I’m sure you know that when you add up the thrust of four engines at takeoff or cruise adjusted for the average seat distance values for what are very different sized jets comparing four against two, the total power for the higher thrust and harder working twin engined side of the ledger versus the quad is higher.

      On Boeing’s original figures for the A345 versus 777-200LR, which were comparable airframes in terms of ULH mission, the total fuel burn of each type was about the same. The former didn’t need an extra or separate team to maintain each of the twin engines under ETOPS rules either.
      My understanding is that if you were to get approval to operate a large Airbus or Boeing wide body twin to ETOPS 330 minutes the compulsory replacement of key components and the increasingly strict operational conditions definitely eat into the efficiency margin such jets would enjoy at say ETOPS 180 minutes. Which is why there are either no, or very few, ETOPS 330 operations today even though both Airbus and Boeing offer that option and have certification to produce such aircraft dependent on national safety agency approvals.
      If you were to compare an A380 configured for 800 seats against a 787 configured for less than half that number, even in the tightest fit out imaginable or legal, you don’t get a bankable fuel cost bonus. However if you were to average the yield per seat on a currently configured EY or EK jet against a smaller twin with a lower proportion of premium seats I think the comparison might be ‘interesting’. Of course the future of ‘premium’ versus ‘as cheap as…’ may change the market to such an extent that your predictions all come true.

  8. George Glass

    I dont have exact figures but ball park for the A380 is 13 tonnes per hour average,bit more at the beginning of the flight , bit less at the end and around 330 kg to carry an extra tonne over the journey.It is payload limited out of Dallas for Sydney and routinely blocks out seats to carry the fuel required.A B787-9 will start the flight at around 7 tonnes an hour and finish it at around 4.5 per hour with a full load on the same sector. The variable is how many punters you can cram in.You do the math. I know which aircraft will be here in 10 years time.

    1. Ben Sandilands

      George,
      The A3880 burns far more fuel than a 787 but can carry far more passengers. You would need more than two 787s for every A380 to carry the same number of people in a higher density format over the same distance. That means finding twice the number of slots.

      Every jet now in major route service would be load limited out of DFW to SYD except the 777-200LR. The 777-300ERs are load limited out of Dubai on very hot days on some routes when the A380 isn’t. Provided you have the passengers needed to fill the seats (and at the right yields) that can be fairly important. I think the real business of being an airline is a bit more complicated than looking at a small jet like the 787 and saying it burns less fuel than a large jet like an A380. They both need the same number pilots, and they both fill a single slot at either end of a trip. Last year international traffic on some major routes like those from Australia and other parts of Asia grew by 5-7 percent, as they have now for a number of years. The 787 will be too small to be useful for very much in 10 years time, and eclipsed by bigger Boeings and Airbuses. It will also be avoided like the plague by those of us who are normal sized adults with hip bones, because there will be alternatives.

  9. comet

    The Boeing 787 was a debacle from the start.

    I don’t believe it will ever make a profit for Boeing.

    So as far as Boeing’s accounts go, they would have been better off staying with the 767 until they could sell no more (when Hawaiian bought the last unit), and then made nothing. Boeing would have been better off making nothing.

    1. derrida derider

      Now it is true that both the A380 and the 787 were mistakes in the sense that they may never repay their development costs. But that money is spent so the relevant questions for continuing with both is whether you can shift ’em at less than the unit cost of production alone. Development costs are sunk costs.
      The 787 clearly is doing that, maybe because of the “cost effective” loadings that Ben decries (cheer up – think of the jobs in fabrication shops all over the world you are buying with your crushed hip bones and unwiped bum).

      It may or may not be true for the A380. It’s unclear, possibly even to Airbus itself. But given growth and slot constraints you must expect it to get sales above the cost of production in the future. In that sense it will make a profit then, and that no doubt is why production continues regardless. But until then Airbus are not going to be too interested in pouring much money into further development of it, no matter how cost-effective that might be from the engineering POV.

  10. George Glass

    Last post on this thread because its going round in circles.
    You cannot,repeat cannot, make a four engine aircraft more efficient than a twin unless it has a huge advantage in payload.Two engines means twice the maintenance.Fuel burn per passenger kilometer cannot,repeat cannot, be better than a twin with comparable payload. That is why the B777-X is a game changer.All Yield Management departments in all airlines around the planet , except Emirates , came to that conclusion a long time ago.And,if you can, talk to an engineer about their dispatch reliability. Its woeful.It may,(may!) have a role on sectors under 9 hours into capacity constrained hubs but only maybe. London to a brick Airbus cancels the production line within 2 years.

    1. Ben Sandilands

      Not sure if George is still in the room, but Scott Hamilton of Leeham News and Comment has done some interesting number crunching on Emirates.
      https://leehamnews.com/2017/01/12/is-emirates-in-trouble/?utm_source=dlvr.it&utm_medium=twitter

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