Unique position offers huge on-tap market
WITH its hub at a
geographical crossroads,
Emirates has been clever
about leveraging the
benefits of its unique
location. Dubai is more
or less midway on both a
north-south and east-west
axis, letting the airline tap
into markets of 1,5 million
people within a three-hour
flight, 2,5 million in six
hours and up to five billion,
some two-thirds of the
world’s population, in eight
hours. The advantages
for network building are
obvious.
Serving 41 cities in 80
countries, Emirates flies as
far north as Scandinavia
(Oslo will be added to the
network from September)
and as far south as Cape
Town and Sydney. It serves
the numerous points on
the US west coast and just
as many in China. All the
big-volume, global aviation
nodules are served.
In terms of network size,
the airline ranks among
the world’s top five and its
significance as a transit
carrier, without a heavy
dependence on alliances, is
widely acknowledged.
As an example, the South
African route, comprising a
total of six daily services a
week out of Johannesburg,
Cape Town and Durban,
recorded a million
passengers between April
2013 and March 2014.
According to Fouad
Caunhye, regional manager
Southern Africa commercial,
the vast majority, 700 000,
moved on from Dubai to
other points on the network,
illustrating Emirates’
strength as a transit carrier.
The remaining 30% either
ended their journey in Dubai
or stayed over for a short
period before resuming
their travels onward.
Fouad points out that
network size is influenced
by multiple factors such
as passenger demand, the
economy of the destination
and how it ties in with a
portfolio of points that
generate critical mass.
Often the importance of a
port lies in this contribution
to the network rather than
in its point-to-point value.
Further, rising demand does
not always necessitate
additional frequencies but
can be accommodated with
equipment.
Emirates currently has
US$99bn (R1 040bn)
worth of aircraft on order,
including 150 B777s and
50 A380s.
Though capacity is
constantly reviewed,
conditions for expansion on
the South African routes are
currently not optimal. While
distressed currency makes
South Africa attractive to an
inbound market, it dampens
outbound, says Fouad.
Beyond Dubai, South
Africans are using Emirates’
network to travel to Europe,
their historic stomping
ground and one that is
served less frequently by
European carriers than it
was a decade or so ago. In
addition, Emirates’ multiple
Indian routes and 120
weekly services are much in
demand by South Africans.
Further, China has proved
to be the local Emirates
office’s good-news story –
12% of the airline’s traffic
to China emanates from
South Africa. Additionally,
the south-east Asian routes
are doing well with South
African custom, drawing
new leisure segments for
Emirates. Daily flights to
Phuket are attracting quality
holidaymakers; Vietnam
services carry a noticeable
amount of incentive
groups and some 60-100
adventure travellers each
month; and the Maldives
is proving an encouraging
niche market.
“Emirates is still young
and ambitious but does
not want to garner market
share at any cost,” says
Fouad. “We want to
maintain our position as a
top-five airline in the next
five years, assist Dubai
in achieving its 20-million
tourism target by 2020
and boost our fleet, while
generating sufficient profits
to stretch our business
horizon to another healthy
10 or 20 years. We will
grow as much as global
demand grows.”
Dubai’s success as a
tourist attraction, financial
and business centre has
played its part too. In 2013
Dubai recorded 11 million
hotel guests, up 10,6% on
the previous year, and has
targeted 20 million tourists
as its goal for 2020. With a
direct, indirect and induced
value to the Dubai economy
of AED 75bn (R215bn),
tourism far outweighs the
oil industry’s contribution
to GDP.
The 2020 aim is to triple
this contribution to AED
215-230bn (R616-659bn).
Etihad Regional expands into Europe
THE launch of Etihad Regional
in January considerably
expanded the number of
European points available to
Etihad Airways’ passengers.
The new carrier represents
a partnership between Etihad
Airways, headquartered in
Abu Dhabi, and Switzerland’s
Darwin Airline, based in
Lugano with a major hub in
Geneva. Etihad Airways has
acquired a 33,3% stake in
Darwin Airline, which, in turn
has become the UAE carrier’s
seventh equity alliance partner
and fourth partner in Europe.
Other European alliance
partners, notably airberlin
and Air Serbia, will feed
passengers into the Etihad
Regional network.
At the time of the launch,
James Hogan, president
and ceo of Etihad Airways,
explained the airline’s network
strategy of building strong
regional partnerships to open
markets. “Etihad Regional will
provide a unique opportunity
to strengthen vitally important
regional networks and
connect them to the rapidly
expanding global network of
Etihad Airways. We will choose
partners, as we have done
with Darwin Airline, that share
our passion for delivering
an outstanding service to
travellers, with greater choice
and more convenience.”
According to Xenia Adamou,
gm of Etihad Airways South
Africa, Etihad Regional
currently offers year-round
flights to 18 destinations in
Europe – including secondary
destinations on partner
networks. By mid-2014,
Etihad Regional will have
added 18 new destinations
to its network which will
include the seven European
gateways served by Etihad
Airways – Geneva, Amsterdam,
Paris, Düsseldorf, Belgrade
and Zurich (commencing in
June) and Rome (commencing
in July). To facilitate this
expansion, the regional carrier
is to lease four ATR 72-500
aircraft, which will boost its
regional fleet to 12. They are
scheduled for delivery between
April and June.
Etihad Airways’ international
network, now serving 80
passenger destinations, will
this year add nine new hubs,
among them Jaipur; Los
Angeles and Dallas; Zurich;
Perth; and Phuket.
According to Xenia, network
points beyond Abu Dhabi most
in demand by South Africans
include London, Paris, Munich,
New York and Mumbai.
Frequencies to Munich and
New York were increased to
double-daily this year. Moscow
and Dublin are growing in
popularity, and both will also
be increased to double-daily
services in the near future.
Etihad operates a daily Abu
Dhabi-Johannesburg service
using A330-200 aircraft but
has no plans at present to
increase frequencies to South
Africa or serve additional
South African points.
Xenia says: “We already
offer extensive coverage
within South Africa through
our codeshare partnership
with SAA.”
As part of its growth strategy,
Etihad recently announced the
creation of the Etihad Aviation
Group.
This new structure will
manage the diversification
of operations outside core
airline business and marks
the transition from a singleentity
airline to a wider global
aviation group.
Dubai accommodation levy
THE Tourism Dirham is a
new accommodation fee
levied in Dubai on all hotel
and apartment hotel stays
since the end of March. Set
at a scale of AED7 (R20) to
AED20 (R57) per room per
night depending on grading,
the revenue goes towards
marketing and development
of the Emirate’s tourism and
trade sectors.
The fee is collected by
hotels at check out.
A grace period applies:
the fee will not be imposed
for stays between March 31
and June 1, provided the
accommodation was paid in
full before February 23.
