Emirates poised to bid for Atlanta route

Emirates Airline may fill route gap left by Delta. Courtesy Boeing

DUBAI // Emirates Airline is considering a service between Dubai and Atlanta, Georgia, in place of Delta Airlines, which last week signalled its intention to withdraw from the route next year.

The airline said: “Our route planners are now closely studying the opportunity for Emirates to fill in the gap when Delta exits the non-stop Atlanta to Dubai service.”

In an escalation of the row between US and Arabian Gulf airlines over an “open skies” policy, Emirates said that the withdrawal by Delta, the most vociferous of the American critics, was a “political move to position Delta as a victim of the Gulf carriers, which is laughable considering Delta’s size and profitability”.

On Wednesday, Delta said it would stop its service, the only direct flight between Atlanta and Dubai, next February, because of “overcapacity and competition from subsidised Arabian Gulf carriers”.

But according to studies conducted by Emirates economists, the Atlanta to Dubai route was a cash generator for Delta, the world’s most profitable airline.

“Our studies indicate that the route was a highly profitable one, with an estimated route profitability of over US$10 million (Dh36.73m) a year, or a route net margin of 7 per cent.

“These are conservative estimates [which] mean Delta’s route was generating a return way above that of the global airline industry,” Emirates said.

A spokeswoman for the Dubai airline said: “Delta effectively has a monopoly on the Atlanta to Dubai route, because they can carry Fly America traffic that is protected from non-US carriers, and enjoy high seat loads and yield on the route.

“By any airline’s standards, these are lucrative conditions and hardly reason to cease the Atlanta to Dubai service.”

She suggested instead that Delta’s exit was for other reasons. “Perhaps it is because they wish to redeploy their aircraft on other trans-Atlantic routes that have even higher yields, due to the anti-trust immunity Delta enjoys with its alliance partners. In which case, Delta should admit that its goal is to make even more money, and leave the Gulf airlines out of it.”

The average seat load on Atlanta to Dubai has been consistently more than 85 per cent, according to the American department of transport, which indicated that demand or overcapacity was not the issue, Emirates said.

“Considering that over 55 per cent of the traffic that Delta carried on the route connects in Dubai to or from destinations in India, Afghanistan, Iraq, and other cities in the Gulf, it is also disingenuous for Delta to point the finger at Gulf airlines for carrying traffic to the USA that does not originate in their hub city,” Emirates said.

Any plans by Emirates to fly between Atlanta and Dubai would be fiercely resisted by the Americans.

Richard Anderson, Delta’s chief executive, was outspoken in his criticism of the Gulf carriers, which he linked to the September 11 terrorist attacks in 2001.

Emirates flies to 10 other cities in the US.

Atlanta is also the global hub for Delta, which would lobby local and federal aviation authorities to prevent Gulf airlines getting take-off and landing slots.

Emirates’ estimates of the Atlanta route finances are based on a combination of Delta’s published fares, and simulated operating costs to fly a Boeing 777-200LR – the aircraft Delta uses on the route, based on Emirates’ own experience of operating the aircraft type between Dubai and the US.

As a yardstick, the forecast by the International Air Transport Association for global airline profit margin this year is 4 per cent