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Sun 8 Jan 2017 08:26 AM

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Despite the many challenges in aviation, global appetite for travel remains resilient

Beyond global politics and socio-economics, digitisation and disruptive technologies will play a key role in defining the aviation industry and Emirates airline’s future

Despite the many challenges in aviation, global appetite for travel remains resilient
Flying high Clark says Emirates business fundamentals are solid.

Last year was one of considerable growth for Emirates as we continued to steer our course despite prevailing socio-economic and political headwinds around the globe.

We added seven new passenger destinations in 2016, focussing on countries and regional economies that have demonstrated robust growth, like China, Myanmar, Vietnam and the US. We brought our ever-popular A380 onto 11 more destinations, and its success is a testament to our product’s tremendous appeal wherever it’s deployed.

By the end of 2017, we will have over 100 A380s flying to trunk routes like Sydney, as well as secondary points such as Prague, with many more destinations in the pipeline.

The aggressive fleet retirement plan we embarked on in 2016 has resulted in Emirates becoming the only airline in the world to operate an all Airbus A380 and Boeing 777 fleet, offering our customers a superior onboard experience and further enhancing our environmental performance through state-of-the-art, modern aircraft.

Emirates is set to take another 28 aircraft in 2017, and we will continue to work hard to enhance our products on our existing fleet, as well as on our next generation aircraft.

The road ahead, as always, is littered with challenges, but we always look for the silver lining.

At Emirates, our house is in order financially and our business fundamentals are rock solid. But as a global airline, we are not immune to sluggish economies, shifting consumer confidence and protectionist political landscapes. Why? Because these factors impact our ability to serve customers in markets where we are denied access, and also impact our customers’ demand for travel, and their travel patterns.

Happily, the global appetite for travel remains resilient. In spite of all that has happened throughout 2016, be it terror attacks, laggard economic growth, or social unrest, people still want to travel. Consumers merely recalibrate their travel plans.

In 2017, we will keep a close eye on developments in the UK and US, as well as in Europe where a number of key political milestones will take place in France, Germany and the Netherlands. We already see signs of a shift from the mainstream political status quo, which is accompanied by the danger of inward-looking policies that appeal to populist sentiment.

Any potential shift away from liberalisation would be bad news for consumers, businesses and us. After all, Emirates is a product of multilaterism and liberalisation. Our business model from the beginning has been about connecting the world through the geo-centricity of Dubai, embracing competition, and tapping on global opportunities to offer consumers more travel options and better value for their money.

In the US, rhetoric from the Big 3 continues to intensify, with hopes that the new administration will reverse America’s long-standing open skies policy. We have made our position clear — we compete on the same commercial fundamentals as any other airline. In addition, we have always advocated the economic benefits of competition and international air connectivity, and we continue to engage the US on this issue through the UAE government.

On the economic front, low oil prices through the year have continued to curtail the trading landscape.

The global oil and gas industry has been heavily impacted, as have our neighbouring economies in particular, and this has also negatively impacted demand for corporate travel. In addition, the strong US dollar continues to eat away at our revenues. In spite of all these challenges, we remain optimistic and are turning our focus to look at pockets of opportunity around the globe, recreating consumer segments, and shifting our operations where we see strong demand.

Beyond global politics and socio-economics, we also see other forces of change that will shape the industry in 2017 and beyond. We are in an era where digitisation and disruptive technologies will play a key role in defining the industry and Emirates is adapting quickly to ensure we are ahead of the curve. The digital and consumer revolution is already happening — around us, to us and hopefully with Emirates driving some of it. We are exploring a number of avenues in partnership with some of the best universities in the world. So watch this space.

Regardless of all of the external drivers transforming air travel, we will continue our undiluted focus on our core strategy, concentrating on our own organic growth, connecting city pairs that make sense for our customers, while offering them an outstanding value proposition while they discover the world.

I am ever an optimist, and I truly believe that aviation is a force for good. With these fundamentals in place we will rise above all of the uncertainty of today and come out stronger tomorrow.

Sir Tim Clark, president, Emirates airline

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