Emirates will shift aircraft to destinations in Malaysia, Oceania and Africa as the airline eyes alternative growth markets after eliminating 25 weekly flights to the US in the fallout from president Donald Trump’s travel restrictions.
Planes on US routes usually fly more than 80 per cent full in the summer season but are now “percentage points” less than that, hurting the flights’ profitability, the Emirates president Tim Clark told media yesterday. The airplanes might be redeployed to markets ranging from countries in the Pacific to Africa and Europe, he said.
Emirates can reinstate the capacity if the US relaxes H-1B work visa and general entry rules, helping traffic, Mr Clark said.
“Unintended consequences need to be dealt with by the US,” as it is also losing out on “pretty robust and powerful spending” capacity of families making leisure visits from the Middle East, he said.
The carrier outlined plans on Wednesday to scale back capacity as of May on five of the 12 US routes it serves – cutting 25 of the 126 weekly flights it operates – citing the country’s tightening visa restrictions and a ban on carrying personal electronics from some locations, including Emirates’ Dubai hub.
Yesterday Mr Clark said the decision to cut flights was a temporary response to a clear drop in demand, and does not signal a desire by Emirates to halt its expansion in the world’s largest aviation market.
“This is not a permanent arrangement … I do not see this as a paradigm shift,” he said. “Obviously our plans remain in place and we are as bullish and as confident about the US markets as we have been.”
Mr Clark declined to detail how much of a financial hit Emirates has taken over the past three months, but he described the fall-off in passenger demand as “significant”.
Emirates does not provide fin¬ancial details solely for its US oper¬ations. The Americas region, which also includes routes to Canada and Latin America, generated US$3.3 billion in revenue, or 14 per cent of total sales, in the fiscal year ending March 2016, according to Emirates’ last annual report.
The cutbacks will mean twice daily Emirates flights to Boston, Los Angeles and Seattle will fall to once a day. Daily flights to Fort Lauderdale and Orlando will be trimmed to five per week.
“It is not something that Emirates does lightly when it starts pulling capacity out of markets that it’s spent millions of dollars developing and operating,” Mr Clark said.
“So when it gets to this, suffice to say they are falls which cause us to make those kinds of changes.”
Chief commercial officer Thierry Antinori outlined plans in 2013 to serve 15 US cities by 2018, and Mr Clark predicted three years ago that the market would become one of Emirates’ three largest sources of revenue.
Emirates’ traffic growth rates have already been fading. The carrier posted its first annual revenue decline in a decade for the 12 months ended March 2016, and sales since then have been hurt by lower oil prices, reducing Middle East business travel as well as terrorism attacks in western Europe, Turkey and North Africa that have discouraged tourism.
The airline will debut its new A380 Onboard Lounge next week at the Infinite Possibilities stand at the 2017 edition of the Arabian Travel Market (ATM) that runs from April 24 to 27.
Inspired by private yacht cabins, each seating area on Emirates’ A380 Onboard Lounge will have a table and window view. The lounge has capacity to accommodate up to 26 passengers at a time, including eight seated.
Emirates will this year launch a series of new cabin products and enhancements for its A380 and Boeing 777 fleets.
Source: m.thenational.ae
