Emirates was unable to convince Airbus to upgrade the A380, forcing it to buy smaller jets requiring a recalibration of its super-hub model.
Tuesday 30, April 2019
(Bloomberg) –Emirates is reviewing its route network as it grapples with slowing economic growth and the demise of the A380, a plane that is been the cornerstone of its strategic thinking for almost two decades.
Tim Clark, the President of Emirates, said that Dubai-based Emirates has spent the past nine months knocking down the network to establish the optimum route profile both for itself and is now close to the end of that exercise.
After establishing Dubai as the leading interchange for flights linking cities around the globe, Emirates is finding it tougher to find profitable new routes, especially with sluggish Persian Gulf economies weighing on margins.
“We have not been growing at the pace we used to because of geopolitical issues in the region and elsewhere, but that is given us time to take stock of what the network is going to look like in five to ten years and what the fleet fit in that network and the type of aircraft is going to be,” Clark said.
Emirates dropped the A380 from its long-term plans after Airbus and engine maker Rolls-Royce Holdings declined to invest in the double-decker, leaving a choice of buying the same aircraft or walking away, Clark said.
In February, the airliner resolved to purchase 70 A330neo and A350 wide-bodies while cutting its A380 order to 14 planes from 53. The two-engine jets will offer fuel savings but carry fewer people, complicating the Emirates operating model, which is built around waves of mass departures that are closely timed to maximise the scope for transfers between flights.
Though all Emirates routes are under the microscope it remains possible that the airline could seek to operate more controversial fifth freedom routes to the US, in which flights originating in Dubai pick up passengers in a third country before taking them on to the US, added Clark.
Clark said that Emirates will become far more integrated with short-haul sister company FlyDubai, though there are no plans to merge the pair. The carriers have begun attaching their flight code to each other’s services and are rationalising their networks to avoid duplicating routes.