By Tim Clark
While Emirates Airline will continue its extraordinary expansion this year, there will be plenty of turbulence along the way.
For Emirates, 2015 has been a year of considerable growth, and we won’t be slowing down in 2016.
We added six new destinations in 2015, and we uplifted frequencies and added capacity to 40 cities. Our first Central American destination, Panama City – which launches in February 2016 - will uncover a network of over 20 Central and South American cities. It also closely follows the Panama Canal expansion, and we look forward to bringing markets closer than they have ever been before and supporting the country’s booming tourism industry.
In 2015, we expanded our A380 network even further with four new destinations, and layered on more A380 services to nine other existing points, clearly demonstrating the popularity of our flagship wherever it’s deployed. We also introduced our two-class A380 with the capacity to carry 615 passengers on high density routes such as Copenhagen and Bangkok. With 20 new A380s to arrive next year, the A380 will be introduced on even more destinations, offering greater choice for our customers.
In 2016, we will also embark on an ambitious fleet retirement programme that will balance out the influx of new aircraft that we will be receiving in the next two years, including the 36 aircraft that we will take in 2016.
But the year was not without challenges.
Regional conflicts continue to disrupt our operations. We are keeping a close watch on developments, pressing for greater accountability across the industry to share knowledge and intelligence – which underpins our relentless focus on safety. The Russian jetliner incident over Egypt’s Sinai region has forced aviation stakeholders to address security issues at an industry-wide level. Consequently, we will carry on navigating alternative flight paths to circumvent areas of conflict.
Last year also saw an escalation of unprecedented protectionist campaigns waged against us in the US, and some parts of Europe. Delta Air Lines, American Airlines and United Airlines are seeking to stem the tide of progress by accusing Emirates of being subsidised and competing unfairly. European carriers are pressuring governments to put in new EU-wide policies to protect themselves from competition.
We have made our position clear: we are not subsidised, never have been and never will be. We compete on the same commercial fundamentals as any other airline. When carriers like Emirates are executing a well-documented, highly visible, transparent business plan to the world and taking advantage of the US Open Skies treaties, you can’t suddenly change the rules and lobby the government for protection. But that’s exactly what is happening. We ask the Big 3 to step up and start competing on the fundamentals – product and service. And we hope the US government will come to a resolution soon.
In our Dubai hub, airport and airspace congestion is nearing gridlock, with traffic growth showing no signs of a slowdown as we ramp up our fleet and network in the coming years. Authorities in the UAE and GCC are working hard to find solutions and I am confident we will begin seeing progress in the next two to three years.
Concourse D will offer some relief for our growing capacity constraints; when it’s ready, Emirates will fully take over Concourse C to derive every last bit of efficiency from our operations and maximise the slots available to us.
Growing Dubai’s connectivity will be vital in the coming years, leading up to EXPO 2020; the Dubai government is tirelessly working on infrastructure enhancements, with a special focus on the aviation sector, all paving the way for Emirates to carry 70 million passengers a year.
The plunge in fuel prices has been a double-edged sword: on the one hand lowering operating costs, but on the other impacting global business confidence and market volatility. For many businesses, it is tempting to enjoy the benefits of cheaper fuel and take the foot off efficiency initiatives. At Emirates, we continue to invest in new fuel-efficient aircraft and technologies, because we know that is key to long-term sustainable growth.
The strength of the US dollar against major global currencies continues to erode our profits and, reflecting the sluggish global economic environment, air cargo traffic continues to flatline. However, we still have much to be optimistic about. We have been able to respond nimbly to external challenges, because our business foundations are strong. Maintaining that agility will be vital in the upcoming year.
Emirates’ strategy remains unchanged – we will focus on our own organic growth, connect city pairs that make sense for tourism and business, while offering an outstanding value proposition for our customers.
As we have always done, we will plough through the bumps in the road, and we look forward to an exciting 2016.
Sir Tim Clark, President of Emirates Airline.
Well done Sir Tim Clark and congratulations on the wonderful work that you are doing. Your decision in selecting the A380 is the wisest decision that you have made for Emirates Airlines.