Emirates Airline, the largest international airline in the world, will suspend 25% of its flights over a period of 45 days between April and May. This will affect passengers who travel through the Gulf hub.
Due to the closure of Dubai International Airport’s south runway due to maintenance work, the airline had no choice but take this drastic measure. This will make the airport only one runway.
The airline stated that the closure of the runway would affect “a significant number” of scheduled Emirates flights. “Many Emirates flights are going to be cancelled, re-timed, or the aircraft used will be changed.”
A spokesperson for Emirates did not specify which routes would be affected. An earlier report by Routes Online, an industry specialist, had indicated that nearly 500 flights were being cancelled from Emirates’ weekly schedule. This was for 111 routes. The affected services list included several routes that were likely to be cancelled completely during the 45-day period. This included the daily direct flight between Dubai, Newark and Dubai. The airline spokesperson stated that “no routes are being suspended entirely during the runway closure period.”
Reduced frequency on many routes will mean fewer seats, which could lead to higher ticket prices. Emirates’ decision to replace some Boeing 777 aircraft with larger Airbus A380 aircraft will reduce the impact.
A spokesperson for the airline declined to comment on the impact that the runway closures would have on its financial results for the year. She stated, “We aren’t releasing details about the financial impact of this runway closure at the moment.”
Recent experience suggests that it may be substantial. Dubai International Airport had one runway for in 2014 to allow maintenance on the airport. Emirates had to ground 19 planes during this period, and reduced its overall capacity by 9%. 41 destinations were also affected. It lost $467 million in revenue due to the disruption.
Emirates was operating 231 aircraft and carrying 49 million passengers in that year. Since then, it has grown to 268 aircraft. It carried over 58 million passengers last year. According to the airline, 48 of its aircraft could be grounded due to the April-May runway closure.
Although revenues may be affected, industry observers believe that the airline will still have the opportunity to concentrate on the profitability of its routes while the runway is closed.
“Emirates has always focused its growth strategy on increasing market share and presence. Michael Stanat, global operations director at SIS International Research, stated that Emirates has now achieved scale around the world and that boosting utilization as well as profitability are its top priorities.
Analysts believe that disruption to Emirates’ services will be inevitable due to the necessity for runway maintenance. Dubai International is unlike other international airports. It has flights that land and take off around the clock. This means there is no downtime to plan maintenance.
Dubai has a second airport. However, the logistics of moving certain flights to Dubai World Central (DWC), may prove too complicated for the airline. This is especially true since many of its passengers fly to Dubai to connect with onward flights.
The spokesperson stated that they had evaluated the feasibility of moving flights to DWC. However, the decision was not made to do so. “Our business model is still focused on DXB, which offers international connectivity and efficient hub.”
To minimize the impact, however, the airline chose a quieter time of year. The April-May period is not part of the main travel seasons in either the northern or southern hemispheres. It also coincides with Ramadan which is a time when there is less demand for flights to the Middle East.
John Strickland founder of JLS Consulting, an aviation consulting firm, says that they have chosen a time when there is a bit more leisure and business travel. This should reduce the impact. They are doing all they can to minimize the impact.
After the runway maintenance work is completed, the airline will make other changes to its route network and the aircraft’s schedule.
Emirates has announced that it will launch additional flights to several African destinations starting in June. These include Casablanca in Morocco, the commercial hub of Casablanca in Morocco, and four capitals in West Africa: Conakry, Guinea, Dakar, Senegal, Abuja, Ghana, Accra, Ghana, Guinea, and Conakry, Guinea. Additional flights will be offered to European cities throughout the summer. In addition, the Airbus A380 will be deployed on these routes to increase capacity on flights to Boston, Massachusetts, and Glasgow in Scotland. Emirates will be reducing its service to Santiago, Chile and Sydney in Australia.
This could spell trouble for Emirates. In 2016/17, profits plummeted, but recovered somewhat in the 2017/18.
Stanat stated that there are other indications that the Dubai airline market might be over-saturated. Virgin Atlantic recently reduced flights to Dubai because of declining profitability. “There are many threats on the horizon, such as geopolitical instability and currency fluctuations, oil price fluctuations, currency fluctuation, volatility in capital market, and concerns about a possible recession.