Emirates boss shuns airline alliances

Middle Eastern airline Emirates has no interest in forging alliances with other carriers as it pushes ahead with its strategy of opening new routes to funnel traffic through its hub at Dubai, president Tim Clark said.

Many international airlines are lining up to join alliances such as SkyTeam, oneworld and Star as they seek to broaden their route networks and attract new customers.

But hugely profitable Emirates has no interest in linking up with existing partnerships, Clark told Dow Jones Newswires, as it perceives being alone as a strength.

Airlines that choose to belong to alliances "may do so because they believe their survival depends on it," he said. "Maybe their managements don't believe they can go it alone, or they believe that there are huge cost and revenue synergies, and that their problems of profitability will be resolved," he said.

However, he added: "If they want to join us, I don't mind."

Emirates has become something of a pariah among the big legacy carriers in Europe and the US that have accused it of unfair and predatory commercial practices that have allowed it to mop up their customers. They argue that Emirates benefits from direct and indirect aid from the government of Dubai, for example, through subsidised fuel and landing fees, low infrastructure costs and cheap financing.

Clark, who was in Paris to "put the record straight" on what he sees as a concerted campaign of denigration by European airlines, dismissed these claims, saying that Emirates is transparent. "If anyone can ever prove we have benefited from one euro of subsidy, I will resign the next day," he said.

Competitors are angry because they see Emirates making money on routes that they have ignored, he said.

For example, Emirates has made big inroads into Africa, and has identified massive potential for traffic between that continent and China. Emirates' planes on African routes that other carriers have ignored, such as to Luanda, Tunis and Lagos, are more than 80 percent full, Clark said.

"I can see China to Africa traffic on my radar screen because there's huge demand for Chinese products in Africa and huge Chinese interest in Africa's mineral wealth. Anyone who can't see that shouldn't be running an airline."

Clark said Emirates would pursue its ambitious network expansion in other parts of the globe. The airline has launched six new destinations since April, and has over 202 aircraft on order, of which 62 were ordered in the six months through September, including 32 Airbus A380 superjumbos. The additional capacity will more than double its fleet size in coming years.

Clark brushed aside accusations that Emirates' voracious appetite will create overcapacity in the industry, saying that the company needs the planes as quickly as possible to feed the new routes that it plans to open. Besides, he said, 70 aircraft will be retired over the next four years.

Emirates currently has a service to Moscow, and St Petersburg "is on the radar screen," Clark said. Opening up a route to Kiev in Ukraine is also on the cards, he said.

Clark said Emirates is continuing to talk to Boeing Co about its next generation of wide-bodied aircraft with the capacity of the current 777. "We want a plane that can go non-stop to the west coast of the US in a 16 1/2-hour trip with a 45 to 50-tonne payload and with a fuel burn improvement," he said.

Emirates would like the new plane to be about the same size as the current 777, he said. "It could be composite or aluminum-lithium, I don't mind. These days, I'm not sure which is the right way to go."

Boeing has encountered major delays in developing its new 787 Dreamliner, which relies more on weight-saving composite materials than any previous commercial aircraft.

Clark said Emirates has no interest in starting up a low-fare long-haul airline, though he acknowledges that a strong business case can be made for being able to operate an 850-seat A380 between London's Stansted airport and Melbourne, Australia, with fares at a fraction of the cost of those on the legacy carriers.

Clark said the second half of Emirates' financial year that ends on March 31, 2011 "is looking very good." Forward bookings through March "are "extremely robust," both in economy and premium cabins, he said.
(Source:www.cargonewsasia.com)