Emirates chief: ‘We’re almost back to normal’

Emirates

Dubai airline still needs 5,000 more staff and 900 pilots, says COO

Dubai’s Emirates airlines will splash $2 billion on new hires and aircraft upgrades as demand for flights ramps up, a top executive has revealed.

Aviation was among the worst hit sectors during the global pandemic as international borders shuttered during lockdowns.

In 2020 Emirates reported a $5.5 billion loss as revenue plunged 66 percent on the previous year to $8.4 billion. Global airlines lost $167 billion, a 60 percent loss on the previous year, according to a report by McKinsey & Company.

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Worldwide travel and tourism revenues won’t return to pre-pandemic levels before 2024, the study said.

“The industry today is ready to recover,” Adel Ahmed Al Redha, chief operating officer of Emirates Airlines, told AGBI.

“The demand for travel — for business, tourism and visiting family — has been kept capped for the last two years, and so has the need for travel,” he said, adding that most countries worldwide have removed entry restrictions and airlines are working at increased capacity. 

“In terms of the ability to operate or demand to operate, we are there now. What is holding us back is our ability to fulfil that demand, and I think by 2023 we will see many of the operations almost back to normal.”

Nearly nine out of 10 consumers worldwide (86 percent) intend to spend at least as much on travel this year as they did in pre-pandemic years, according to a survey by American Express.

Emirates is currently carrying in excess of three million passengers across the network each month, Al Redha said, with that number expected to climb to around 80 percent of pre-pandemic operations by the end of the year.

According to the World Travel and Tourism Council (WTTC), if vaccine rollout programmes continue and international travel restrictions are eased, the sector’s contribution to the global economy could reach $8.6 trillion for 2022 – just 6.4 percent shy of pre-pandemic levels.

State-owned Emirates airline has embarked on a hiring spree to keep pace with growing demand.

“We will face quite a lot of challenges to ensure that resources are available to support this [return] to normal and increased operations” Al Redha said.

“We still need to do more recruitment. This year our requirement for cabin crew is in the range of 5,000 people and we need 800 to 900 pilots – the areas most impacted by the Covid redundancies.”

WTTC research indicates that travel and tourism employment could exceed 330 million jobs this year, just one percent below pre-pandemic levels.

Earlier this month the head of Qatar Airways, Akbar Al Baker, said labour shortages will be a major challenge in the coming months, though he added that his airline is “inundated with job applications”.

Emirates Media Centre

Fuel surcharge costs to passengers

Even as the global economy tightens and oil prices continue to bite, Redha said Emirates is seeing increased demand for travel and continuing to make investments in its fleet.

“We are all living the impact of the higher fuel prices,” he said.

“Fuel is about 30 percent of operating expenses. It makes it a really important factor to consider. In spite of that, we haven’t seen a reduction in demand for travel.”

According to the seasonally adjusted S&P Global UAE Purchasing Managers’ Index (PMI), inflationary pressures are widespread across the UAE’s non-oil economy, with sharp rises in fuel prices driving up costs for businesses in the oil-rich nation.

“We have passed some of that cost on to our passengers by introducing the fuel surcharge to compensate for some of this sudden surge in costs,” Redha said.

However, he added that the airline is not looking for passengers to bear the full brunt of soaring energy prices.

“One thing for sure is [that] Emirates is not looking to take things from passengers and keep it in its pocket,” Al Redha stressed.

“We invest quite a lot in our fleet, in our product, [and] in our services on the ground and in the air.

“We are not shy of spending more. During the time when many companies were reducing their costs, we were examining how to lift up our product offering.”

In May Emirates launched a premium economy class on routes to London, Paris and Sydney.

The new cabin class will be available on the high-traffic A380 routes from 1 August, with Christchurch to be added in December.

“We have invested in the premium economy from November 2022, [and] we will start retrofitting [aircraft] and introducing this, as well as uplifting cabin configuration.

“This investment is going to cost the company more than $2 billion over a two-and-a-half year period. 

“That’s a lot of money to be absorbed by any company but this is where Emirates stands and that’s how we think — we always like to be unique and we always like to deliver a superior product to our customers.”

The airline said it would provide “luxurious seats, more legroom and a service to rival many airlines’ business offering”. 

The move makes it the only airline in the region to offer a premium economy cabin and industry analysts believe it could attract business and leisure travellers. 

Research from Bauer Aviation Advisory, a management consulting firm based in Dubai, shows that the production and implementation cost of a premium economy seat is 1.6 times higher than that of an economy seat.

Yet it generates 2.3 times higher revenues than its production cost, giving it the highest marginal returns across all cabin classes.

The $2 billion investment will cover the upgrade and renovation of more than 120 Boeing and Airbus aircrafts