Emirates is targeting major markets in Australia, India, China and the US to expand its new parcel delivery service, as it unlocks new revenue streams and maximises the use of its wide-body fleet.
The Dubai-based airline will start package delivery for Australia by the end of April and India in the “next few months” to tap into the Asian economy's $8.6 billion outbound courier express parcels market, Dennis Lister, senior vice president of product and innovation at Emirates Skycargo, told The National.
The “massive” Chinese market will be next, followed “eventually” by the US and then the rest of Emirates' global network of 148 destinations in the long-term by leveraging the belly-hold of its mammoth fleet of passenger aircraft and dedicated freighters.
“The goal needs to be wherever Emirates flies, we can have connectivity for passengers and for parcels in the long-term,” Mr Lister said on the sidelines of the Iata World Cargo Symposium in Dubai.
“We want to be everywhere on the planet and to be the largest integrated door-to-door parcel delivery entity on a passenger fleet, cross-border, in the next three to five years.”
Earlier this month, the world's biggest long-haul airline launched the Emirates Courier Express service, transporting packages from an initial seven markets including the UAE, Saudi Arabia, Bahrain, Kuwait, Oman, South Africa and the UK. The parcel delivery time of under 48 hours serves B2B (business to business) and B2C (business to consumer) users.
Emirates Skycargo
Emirates, which operates the world's biggest fleet of Airbus A380s and Boeing 777s, flies nearly 248 wide-body aircraft to 150 destinations. “Just like passengers, packages will travel from origin to destination directly,” Emirates said in its April 2 statement.
Beyond tariff turbulence
The parcel delivery service will help boost the airline's profitability, unlock more growth opportunities as it takes delivery of more aircraft and “future-proof” the business.
“The reason we built this is creating a sustainable revenue for the company. As we expand the fleet out, we're getting a lot more planes, we have to ensure that we are actually in a position to generate our revenue stream, which means innovating on products,” Mr Lister said.
Emirates Courier Express launched during a time of heightened uncertainties, fears of a global recession and an escalating US-China trade war unleashed by President Donald Trump's tariffs on its trade partners.
However, the airline is taking a long-term view on its new service and is confident in the logistics industry's demonstrated ability to recover from geopolitical crises and the Covid-19 pandemic.
“No one really knows what's going to happen with this changing policy on tariffs, that's the reality,” Mr Lister said, and that the logistics industry has a history of weathering the storm of various challenges.
Mr Lister said the airline is developing the service as it builds for the future and beyond US tariff turbulence.
“We can't look at the next six months. What we build in five, 10, 20 years out, the brand we're building will live forever,” he said, with the Dubai airline shifting its focus to future trends.
China remains the “world's factory” and has generated “massive interest from big customers”, the airline has invested heavily in technology, people, infrastructure and partners for its courier express project, Mr Lister added. Products such as pharmaceuticals and medical devices will be a priority amid the need for the transport of critical goods for people who need them quickly, he added.
Emirates Skycargo expansion
More broadly, Emirates is expanding its air cargo operations to meet strong growth in demand as it operates at full capacity.
Emirates Skycargo plans to double its capacity to 21 dedicated freighters by 2026, Badr Abbas, divisional senior vice president for Emirates SkyCargo, said on the sidelines of the Iata World Cargo Symposium in Dubai. It has 10 dedicated freighters and six wet-leased Boeing 747s.
Emirates is currently evaluating a new freighter plane order, choosing between the Boeing 777X freighter version (known as the 777-8F) and the Airbus A350-1000F.
The airline plans to add 20 new freighter destinations in the “coming few years”, Mr Abbas said. Emirates Skycargo announced the launch of a weekly freighter to Narita International Airport in Japan starting from May 24.
It flies to 38 freighter destinations, in addition to the belly-hold of passenger aircraft to 148 destinations.
The “booming” e-commerce sector, as well as demand for transport of pharmaceuticals and perishables by air, is driving the cargo division's growth, he said.
To position itself for future growth, Emirates SkyCargo is working closely with the Dubai government that is investing in Al Maktoum International Airport to build the “world's largest cargo hub” that will have capacity to handle 12 million tons of cargo annually, he said.
