Emirates, flydubai are set to dominate the skies
Over 79,000 trade visitors. Deals totalling over $113 billion. Emirates introduced an all-new first class cabin product with updated business and economy class offerings. A litany of widebody and narrowbody orders, led by Emirates with the 787-9 and 787-10 and flydubai signing for up to 225 Boeing 737 Max aircraft.
And that was just the 2017 edition of the Dubai Air Show.
Dubai Airports will likely report 2017 as another recordbreaking year for passengers handled and will remain in the top spot for international traffic as it steamrolls towards the 100 million passenger mark.
Naysayers have, for many years now, forecast an implosion of things around the GCC. Even with the Saudi-led blockade of Qatar, the region is rife with burgeoning opportunities.
So, what will 2018 hold? In short, bellwether airline Emirates will dominate headlines for a number of reasons.
Chief among these will be the re-introduction of key routes into the US, where several schedules were reduced due to the travel ban and laptop/electronics ban. Since these restrictions were lifted, the airline has seen a return to robust demand on its US services and it stands to reason therefore that Emirates will reinstate double daily flights to key hubs like Boston and Seattle, for example.
Equally, it is for this economic boon to the US as well as the UAE that the Trump Administration has rightfully cast aside the inane whining of various US carriers who falsely accuse Emirates and others of being beneficiaries of state aid.
Yet, it is crippling ironic that Emirates and flydubai are two of Boeing’s biggest customers with orders worth over $100 billion for 777s, 777Xs, 787s and 737Max — these directly create US jobs in the wider aerospace sector and supply chain. President Trump can see that. He can also see US airlines, notably Delta, who prefer to create jobs in Europe by buying subsidised Airbus airplanes — thereby directly harming US jobs that he promised to create.
Little wonder then, the unproven allegations from US airlines about superior GCC airlines has fallen by the wayside as President Trump has failed to entertain their inaccuracies.
To that end, GCC airlines will continue to enjoy the Open Skies pact in place with likely zero interruptions.
Emirates will equally work much closer with flydubai. Qantas’ exit from Dubai will free up much needed gate space, so don’t be surprised to see flydubai also move over to Terminal 3. Not only will this slash minimum connection times for passengers, but both airlines will also be able to leverage the strength of each other’s network more widely.
For its part, flydubai’s relentless growth points to two key elements. The first is that the introduction of the fuel-efficient 737 MAX 8 family will allow the airline to fly further and deeper into Europe, opening up new markets, stimulating demand, slashing fares and allow the airline to cut its operational costs.
Secondly, with flydubai firming up its deal for 175 Boeing 737 Max (all variants) with 50 further options means that it has firmly thrown down the competitive gauntlet not just to Air Arabia, but to other would-be low cost carrier pretenders in the GCC.
Air Arabia only has a token handful of planned A321neos arriving in 2019 — more than two years after flydubai exploits its advantage with its 737Max. Air Arabia will still be operating inefficient and gas-guzzling A320ceos by the time most of flydubai’s fleet becomes exclusively 737 Max dominated — and so, they’ll find it harder to compete against its Dubai-based neighbour.
SaudiGulf Airlines hasn’t made any impact at all and is in fact struggling to survive, while flynas and Jazeera Airways, alongside SalamAir have shown nowhere near the amount of potential they claim, while the Saudi government backed flyadeal doesn’t seem to have a sustainable business model without state support.
This is why flydubai will crush its rivals. The all-new cabins on its 737 Max fleet shows just how far product and customer desires have evolved and flydubai has got their first. Everyone else is vying for the “also-ran” status.
Critically, the development of Al Maktoum International/Dubai World Central will become a bigger focus area for Dubai in the next year. Expanding its footprint and work starting on the second runway must now be matched with more airlines operating out of the facility.
Congestion down the road at Dubai International may force some to look at DWC as an alternative, particularly as roads and hotels en route to DWC are improving all the time.
But once Emirates and flydubai move there, both carriers will unlock their strategic frequencydriven potency. The beneficiaries — i.e., us passengers, will allow for better connections across the globe with two of the world’s fastest growing airlines. The writer is chief analyst at StrategicAero Research. Views expressed are his own and do not reflect the newspaper’s policy.