Emirates Airline to take Dh1 billion hit during Dubai airport runway upgrade

The 80-day programme of work will start on May 1, with Emirates taking the brunt of reductions in flying, with the airport authorities saying earlier this week that 26 per cent of traffic would be cut during the runway work.

Emirates Airline said it would take a Dh1 billion hit to revenue for the duration of runway repairs at Dubai International Airport.

“Emirates Airline will continue to serve all of its worldwide destinations during the 80-day period of runway upgrading works at Dubai International starting May 1,” the carrier said.

The repairs take place from May 1 to July 20.

The Dubai carrier said it would “reduce flights to over 40 destinations and change timings on some of its flights”.

“As the biggest operator at Dubai International accounting for about 50 per cent of traffic, of course we have had to take the biggest hit in reducing flights,” said Tim Clark, the airline’s president. “There will be an impact on our revenues to the tune of approximately Dh1bn. However, we understand the need for this upgrading work to be done.”

Emirates said it would ground 20 aircraft next month and 22 in June and July.

The carrier said that business would be “as usual” during the period. On routes that Emirates plans to reduce frequency, it will compensate for the capacity by using bigger aircraft.

“Emirates has the advantage to use its A380 fleet to increase capacity on routes where reductions in frequencies occur to temper any financial impact, particularly on high yield American and European routes,” said Saj Ahmad, the chief analyst at StrategicAero Research.

With a Dh1bn hit to absorb, it is likely that there will be added pressure on Emirates in the second half of the year to recoup that cost – whether by fare sales or other offers.

“Emirates will be keen to offset lost revenue during the runway works as quickly as it can to avoid burning cash,” Mr Ahmad said.

Previously Mr Clark said that the selection of those particular months “were not by accident but by design”.

May was traditionally the slowest month of the year for Emirates, and Ramadan, a slow period in the Islamic world, will fall in July.

Runway work will be completed in time for the busy Eid Al Fitr.

The airline said that it planned to conduct engineering, maintenance and upgrading of its grounded fleet during the period.

For its cargo operations, Emirates plans to move to the new Al Maktoum International at Dubai World Central (DWC) on May 1.

Airlines operating out of Dubai International will be required to either reduce their operations during the repairs period or move to DWC.

Lufthansa said in February that it had decided against moving its operations to DWC during the repairs. Instead, the German airline will reduce flights.

Dubai International overtook London’s Heathrow as the largest airport in the world in terms of the number of international passengers for the first two months of the year.The airport recorded an 11.7 per cent increase in passenger traffic in February to more than 5.6 million – the seventh consecutive month of double-digit growth.

selgazzar@thenational.ae

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