- Emirates, the glitzy Gulf airline, has been among those hit hardest by the coronavirus pandemic.
- Because Emirates only flies internationally, and does not operate a domestic network, the modest demand in travel recovery that some airlines have seen has largely eluded the carrier.
- Sir Tim Clark, the airline’s president, told Business Insider how the airline was using a shortage of air cargo capacity as an opportunity to support its limited passenger operations as it maintains routes and its larger network throughout the crisis.
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The coronavirus pandemic has been devastating for airlines around the globe.
However, some are better positioned than others to weather the storm.
This has been especially evident in the US, where airlines with predominantly domestic operations have been favoured by analysts to recover from the crisis. Airlines with mixed domestic-international networks, such as American, Delta, and United, have reconfigured their networks to focus on domestic agility.
“The domestic and international businesses have diverged meaningfully,” Vasu Raja, who heads network and route planning for American Airlines, said in an earlier interview with Business Insider. “Though we’re increasingly more optimistic about the sustainability of domestic, international looks like a much different proposition.”
Most of the modest growth in travel demand through May and June was led by leisure travellers, although demand has begun to fall again due to coronavirus outbreaks in several US states.
For airlines without domestic networks, the situation is more complicated.
Because of various international travel restrictions, border closures, and entry requirements meant to help contain the virus, international travel remains at a minimum, with essential travel making up most of the minimal demand. It led some long-haul airlines, such as Virgin Atlantic, to suspend passenger service altogether at points during the pandemic.
It’s also been a challenging situation for Emirates, the Middle Eastern mega-airline.
Emirates’ business model revolves around a global long-haul hub-and-spoke system, bringing passengers between far-flung international destinations connecting through its Dubai hub. A standard Emirates route might be New York to Johannesburg via Dubai, or London to Sydney via its hub.
With passenger number demand plummeting, Emirates quickly saw an opportunity to at least get some revenue by flying cargo, Sir Tim Clark, president of Emirates, said in an interview with Business Insider.
As part of the pivot, Emirates converted several of its Boeing 777-300ER passenger jets into temporary freighters. The airline continued to fly passenger routes with its 777s as well, using the cargo hold to carry freight.
“Realising that there was a radical falloff in capacity offered for long-haul international carriage, and the problems that would present to the freight forwarders and the freight air cargo industry, we seized the opportunity,” Clark said in the interview. “That allowed us to keep about 85 [of the aircraft] flying for 15 to 16 hours a day.”
“Demand was huge with high yields because of the demand for PPE and pharmaceuticals, and general cargo, because of the absence of belly hold capacity,” he added, referring to cargo normally carried by passenger jets in whatever space is not taken up by luggage.
Emirates also grounded its Airbus A380 fleet – a plane type poorly suited to cargo operations, and too expensive to operate with low passenger loads, Clark explained.
“The immediate focus of the management’s attention is trying to support and place the -ERs on our passenger network, which, over the course of the last three or four months, has allowed us to introduce passengers to them where we can,” Clark said. “In the early days, it was repatriation of passengers. People were caught offside out of their country of origin on holiday, or work, or whatever.”
“Gradually, the passengers are moving ahead. We’ve got about 10% of what we would normally carry, but it’s better than nothing,” he added.
As the pandemic drags on, Clark said that the airline plans to continue supporting its passenger network by hauling freight.
“We see a continuation of the demand for air cargo, as strong as it has been, albeit with different types of goods,” he said. “Because of the global shortage of air cargo capacity, we’re still managing to fill the aeroplanes out with quite good money.”
Although some routes and frequencies remain suspended, Clark said that the airline will continue to add them in as possible.
“We do fly to New York and Chicago,” he said, “driven by the freight operations. But the intention is eventually to restore operations the way it was prior to this thing hitting us.”