Emirates to squeeze more from fleet with parcel deliveries

• Emirates launches deliveries
• Parcel market worth $450bn
• US tariffs could have an impact

Emirates has launched a premium package delivery service to open up new streams of revenue from its existing fleet and compete with the likes of DHL and Fedex for a share of a market worth nearly $500 billion.

“Just like passengers, packages will travel from origin to destination directly,” the airline said in a press release announcing the launch of the Courier Express service.

Working with local operators for last-mile services, the airline’s goal is to cut out depots, and take products directly to planes from warehouses and then to final destinations directly after landing – all within 48 hours.

“Airlines are increasingly developing products and services that stretch their competencies and create new revenue streams and this is just another example,” said John Grant, partner at UK consultancy Midas Aviation and AGBI columnist.

The parcel delivery market was valued at $450 billion in 2023, and is growing at an annual rate of 5 percent, according to market research company Research and Markets.

Emirates is particularly well equipped to deliver this sort of service, according to Rico Merkert, deputy director of the Institute of Transport and Logistics Studies at the University of Sydney Business School.

The launch is, however, “perhaps not the greatest timing due to the uncertainties around US tariffs but nevertheless a smart move by Emirates,” Merkert said.

Launching a parcel delivery service is likely to boost the airline’s profitability and provide opportunities for further business, given the continuing growth of ecommerce, Merkert explained.

“Just looking at the growth of FedEx in recent years relative to pure air cargo airlines shows the potential,” he said.

The latest Global Supply Chain Volatility Index from supply chain and procurement business GEP indicated the highest degree of spare capacity in logistics across supply chains since the peak of the 2020 pandemic. 

The survey also showed that global manufacturers’ stockpiling was at the lowest rate for nine years in March, even before Donald Trump’s tariff policy threatened global trade appetite.

John Piatek, a vice president at GEP, said March’s sharp decline in supplier activity was due to the stifling effect of tariffs and tariff-related uncertainty. 

“Until just last week, most companies had taken a wait-and-see approach. Now, organisations are aggressively exploring every possible way to eliminate costs, push suppliers to absorb tariffs, and de-risk their global supply chains,” Piatek said.

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FedEx on average ships more than 16 million packages a day with a fleet of 698 aircraft and serves 650 airports. Emirates’ fleet of more than 250 aircraft flies to fewer than 150 locations.

Emirates is therefore unlikely to challenge FedEx and other major players like DHL any time soon, said Grant, as it cannot compete with the established players’ infrastructure and networks.

The Emirati airline’s entry to the package delivery market will, however, create more competition.

“Given the combination of their passenger network and dedicated cargo services, they are well positioned for such a market entry,” Grant said.