Emirates airline expects to restore its full prewar seat capacity by the end of the year as travel demand through Dubai rebounds after months of disruption caused by the Iran war.
The Dubai airline is currently operating at about 95 per cent of its February capacity and has returned to almost all of its destinations, Adel Al Redha, Emirates' deputy president and chief operations officer, told The National on Tuesday.
“At about 95 per cent, you're almost there,” he said at the Arabian Travel Market. Emirates expects to reach its prewar capacity “by the end of the year” but there are a "few places where we haven’t increased the frequencies", he added.
Emirates has declined to disclose the financial cost of the disruption caused by the conflict. But Mr Al Redha said the airline still expects to report a profit for the current financial year.
“I expect the airline to be profitable,” he said. “Not to the level as we were expecting it, but we've been doing fine. Emirates has been adapting to the situation. We have our aircraft ready to be deployed, we have our crew are ready to be utilised. So, our level of readiness has been really high.”
Demand for travel to and through Dubai has increased, with the airline reporting strong bookings in July and August, while expecting a further rise in September. “We're seeing September demand is coming, we’re seeing so much demand is coming,” Mr Al Redha said.
Fuel prices affect performance
However, the disruption has hit Emirates’ financial performance to an extent. Mr Al Redha said the airline’s overall numbers had been affected by changes in passenger levels over the past six months. Higher fuel costs and longer flight paths caused by airspace restrictions have added to the airline’s operating expenses.
Fuel typically accounts for about 33 per cent to 35 per cent of Emirates’ operating costs. “The fuel cost has been the higher element of our operation caused due to the disruptions ... the price escalations and price variation from one day to another day,” he said.
“We know all airlines, including Emirates, have been exposed to a higher fuel cost because fuel prices have gone up. We have been exposed to rerouting or due to closure of some airways, having to fly longer route, which is costing us more fuel.”
Airfares unpredictable
Asked whether rising jet fuel prices would lead to higher airfares, Mr Al Redha said: “I know there have been adjustments in the fares. All airlines have been subjected to that due to the higher operating costs. Moving forward, I wouldn't want to predict anything.
“For the past six to eight weeks, there have been much fewer escalations [in the conflict]. So, we are seeing some sort of stability in terms of escalations and that is reflected also on the demand and traffic.”
Mr Al Redha said Emirates’ commercial teams are managing fare adjustments in response to the rising fuel prices and operational disruptions.
Increase in demand and new routes
Meanwhile, demand is starting to pick up for Emirates across several major markets, including the UK, Europe, the Far East, India, the US and Canada, Mr Al Redha said.
The airline carried 8.7 million passengers in July and August, up from 4.7 million in March and April. That is on a par with the number of passengers carried last summer, said the airline, which does not post monthly traffic figures. The carrier currently flies to 138 destinations, with a new route to Helsinki to be launched on October 1.
Berlin and Tehran routes
Mr Al Redha said any decision to resume direct Tehran services would be left to the authorities and would depend on future reviews and demand. “I think it’s premature to talk about it now,” he said.
He also declined to commit to a start date for Emirates’ planned service to Berlin, saying internal reviews and terms still needed to be completed.
A380 phase-out by 2040
Meanwhile, Emirates is also preparing for the eventual phase-out of its Airbus A380 fleet. Mr Al Redha said the aircraft was expected to remain in operation until about 2040.
“There will be a phase-out because we can only operate the aircraft up to a certain limit because it becomes very difficult to maintain it, very expensive to operate it. And we have taken that [phase-out] into consideration, by introducing the Boeing 777X into the loop,” he said.
“But obviously, the 777X will not be able to take over the capacity of the A380, and that is a shame. That's where you know we're sad not to have this aircraft operate with us forever.”
Emirates currently operates 116 superjumbos, with about 90 in service and the rest undergoing maintenance or upgrades, Mr Al Redha added.
The airline has received 27 Airbus A350 aircraft so far, with the 28th expected imminently, out of a total order of 73. It also has more than 300 Boeing aircraft on order, Mr Al Redha said. The airline will use the A350 for flights to Helsinki next month, and then to Larnaca, Malta, Nairobi and Hamburg from late October, followed by Mauritius in November.
Emirates has now completed retrofitting work on 104 aircraft, bringing the number of planes featuring its latest cabin products and premium economy to 137. That figure is expected to rise to 155 by the end of December.
