Emirates sees strong passenger demand
SYDNEY — Emirates president Tim Clark said the rare combination of higher oil and a stronger dollar, which usually move in opposite directions, represented a “double whammy” in terms of their impact on costs but that passenger demand remained strong.
“We have very strong summer bookings at higher prices,” Tim Clark told reporters at an airlines summit in Sydney, adding Emirates was monitoring those trends for any sign higher ticket prices were hurting demand.
Global airlines body Iata on Monday downgraded its profit forecast for the industry, citing higher oil and labour costs, but also said yields, a proxy for air fares, were expected to rise 3.2 per cent this year. Iata has cautioned that rising fares as airlines seek to make up for higher costs could temper growth in demand.
Clark, however, said he had not seen any sign of this yet and that the airline had managed to raise prices for the summer without hurting bookings. “The velocity of growth (in bookings) exceeds what we had seen last year,” he added.
Clark also said Emirates’ US business had returned to growth after being hit by curbs on carrying large electronic devices in passenger jet cabins last year. However, Emirates said it had no current
plans to expand the so-called “fifth freedom” flights to the United States, services which have irked some US airlines critical of the
Dubai-based airline’s growth. “Fifth freedom” flights are ones where an airline from one country operates between two different countries. For example, Emirates operates two such flights between Milan and New York and between Athens and Newark. “Fifth freedom” routes are not central to Emirates’ business,” he added.
Pilot, plane availability
Clark downplayed talk of a global pilot shortage, saying availability was back to normal.As for aircraft availability, Boeing is on schedule to deliver the first upgraded 777X in June 2020, he said.
Clark also said he expected to make a decision soon on engines for the carrier’s latest order of Airbus A380 superjumbos. The planes are due for delivery from 2020.
The General Electric and Pratt & Whitney Engine Alliance venture powers most Emirates A380s, but it lost out to competitor RollsRoyce on the latest deliveries.
Clark said the Rolls-Royce Trent 900 engines on its A380s has shown good performance on maintenance since being introduced to the Emirates fleet 14-15 months ago. However, Emirates has delayed some A380 deliveries to allow Rolls-Royce to fix a fan blade problem.
Emirates, which recently announced the launch of premium economy services in a challenge to rivals, plans to install up to 56 of the seats on the double-decker A380s using a bespoke seat design to be sub-contracted out to seat makers, Clark said.
LONDON — Emirates aircraft are synonymous with luxury, offering premium-class passengers shower on board while cruising at 30,000 feet. Now the carrier wants to give some legroom for those flying coach.
The world’s biggest long-haul airline outlined details of a new premium economy seat that it plans to help stem “leakage” of passengers who can’t afford business, but want a more comfortable ride to competing airlines.
The carrier is introducing the seats on all of its new A380 and 777s from 2020 and plans to retrofit the seats onto some aircraft already in its fleet, Emirates president Tim Clark said. The Dubai-based carrier’s A380s will have about 56 such seats in the front of the bottom deck of the aircraft while the 777s will have between 26 and 28.
Premium economy seats have arrived in recent years in carriers from Singapore Airlines Ltd to American Airlines as customers want more space and frills for a little extra, but aren’t willing to fork out for business class. Emirates is taking steps to combat the encroachment of competitors on its routes, including the introduction of new low-cost carriers.
Sleeperettes
“We’re going to recognise that premium economy is something that is here to stay,” Clark told reporters in Sydney on Monday. Emirates has “noticed much more leakage out of our mainstream passenger demand into carriers that have it.”
The seats, which he described as “sleeperettes”, will have a pitch of about 38 inches, up to 6 inches more than the current economy product, and will come with better service and food and a private toilet. Emirates is still in talks with various seat manufacturers to come up with a new design. There will also be a reduction in the number of seats in each row.
“The groundswell of opinion from the segments which are telling us that they are prepared to pay more for a more comfortable seat with more legroom with a degree of exclusivity,” Clark said.
As space in economy class be-
comes ever more constrained, airlines have devised a more spacious cabin product for passengers priced out of business class but determined to get more bang for their buck. Called “premium economy,” this section of added frills between coach and business aims to address a widening gap that has emerged between those cabins.
On almost every airline with premium economy, the biggest lure is increased seat pitch and width, typically along with nicer food and tableware, a larger entertainment screen, a fancier amenities kit, and occasionally, a more generous baggage allowance.
American Airlines was the first US carrier to introduce the cabin on its Boeing 787-9, with 21 seats in a 2-3-2 across layout, far roomier than the 3-3-3 arrangement in the back of the plane.
In 2015, Singapore Air brought its premium-economy version, offering champagne, a broad selection of wines and food, a bigger TV and seats that were as much as 1 1/2 inches wider. Regional competitors Cathay Pacific Airways Ltd. and Qantas Airways Ltd. had the same offering before as customers want more comfort on ultra long-haul flights.
Clark ruled out the premium seats having hard-back shells as is the standard in business class which he said other carriers had scrapped because they were cannibalizing their business-class sales. Fares for these seats won’t be anything like business class pricing with the product being advertised as a supplement to economy, he said.
“We can see the take up, it’s obvious to us that we need to do something,” Clark said. “The difficulty is getting the mathematical point correct, you’re trying to trade people up from economy, not down from business.”