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Flexibility keeps Emirates afloat despite industry hardships

By Vision Reporter

Added 8th December 2009 03:00 AM

EMIRATES Airlines is surviving the effects of the global economic downturn by adopting flexible policies. This has enabled the airline to keep its operational costs down without reducing its fleet, laying-off staff or compromising its on-board services.

EMIRATES Airlines is surviving the effects of the global economic downturn by adopting flexible policies. This has enabled the airline to keep its operational costs down without reducing its fleet, laying-off staff or compromising its on-board services.

By Ssebidde Kiryowa
and Joe Nam in Dubai


EMIRATES Airlines is surviving the effects of the global economic downturn by adopting flexible policies. This has enabled the airline to keep its operational costs down without reducing its fleet, laying-off staff or compromising its on-board services.

Nigel Page, the senior vice-president for commercial operations in charge of Americas and Africa, speaking to The New Vision in Dubai, said the airline has managed to keep costs down 60%, while keeping the standards up.

This has helped them remain financially viable, realising an 18% increment in overall passenger numbers and posting a comparatively small profit at the end of the financial year.

“We had a tough time, but we have hit our target in terms of passenger numbers. Our aircraft, service and staff are our biggest investments. While other airlines have reduced services, we have instead introduced new ones like satellite phones and catering even in economy class.

“Although there has been a general decline in passengers traveling first and business classes, there is a boom in the economy class,” Page said.

The global economic crisis is taking a heavy toll on the global aviation industry. The International Air Transport Association (IATA) warned in September that airlines would suffer a total loss of $5.2b or twice as much as estimated earlier.

This would be the sharpest decline in revenues in over 50 years.

The reasons, IATA says, lie in “a ‘poisonous’ combination of high prices and falling demand.”

Over the last six months about three dozen strong players have stopped or suspended operations. Among them is Russia’s AiRUnion, Britain’s XL Airways UK and Italy’s Alitalia. Others have suspended less profitable routes or laid-off staff.

Page, however, said Emirates had taken a different approach of allowing cabin crew to take leave rather than letting them go altogether.

“When you lay off staff, the cost of re-hiring them in better times is enormous.”

But he admitted the airline is not coming out of the global economic crisis unscathed.

“Like most airlines, it has not been easy. The average yield is down. We are keeping our heads just above the waters.”

Emirates employs over 40,000 people from 140 countries.

Comparing Emirates with British Airways (BA), which was severely affected by the crisis, Page was quick to add that Emirates Airline’s survival of the crisis had a lot to do with their markets as well.

“BA’s long haul routes are mainly in the Americas. Naturally, they were affected. On our network however, the traffic flow is concentrated in the Middle East, Far East, Europe. In Africa, the traffic has not been affected at all.”

Consequently, he revealed, Emirates is keeping a trained eye on the African market to deliver value. To emphasise the growing significance of the African market, Page said the only two new routes they had launched this year were in Africa, direct flights to Durban, South Africa and Luanda in Angola.

About a fifth of the airline’s destinations are in Africa. They fly to 18 destinations on the continent. Two of those are cargo flights while the rest are passenger flights.

Page said the Ugandan market was growing in significance to the airline due to the trade between the two countries. This has prompted the airline to introduce a plane with a bigger capacity on the Entebbe-Dubai route. The Boeing 777 – 300 has a seating capacity of 364. Previously, the airline operated an Airbus A-333 with a capacity of 237 on the route.

Emirates recently ordered 58 A380s from the European corporation Airbus. The largest passenger airliner in the world, the A380 seats 525 people in a typical three-class configuration or up to 853 people in all economy class configurations. The airline already operates five A380s on European, Australian and American routes but none yet in Africa because of smaller airports, shorter runways and fewer taxi ways.

Emirates flies from Entebbe to Dubai daily but enroute Addis Abba. That still ranks considerably low compared to Nigeria and Kenya with two daily flights and South Africa with 5 daily flights.

Page said the volume of trade between countries of their flight destination and Dubai is usually a contributing factor to the traffic on a particular route. He said they hope to introduce a daily direct flight to Dubai in the near future as the volume of trade between Uganda and the United Arab Emirates grows.

Flexibility keeps Emirates afloat despite industry hardships

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