Home' Australian Aviation Magazine : November 2009 Contents 31
NOVEMBER 2009 AUSTRALIAN AVIATION
(CAPA). Only 13.5 per cent is dedicated
to Europe and eight per cent to Asia, while
US routes are less than two per cent of the
airline's capacity. e numbers for Qatar
Airways are near identical.
At Etihad, the ratios are even greater
according to CAPA, with 65 per cent of
capacity dedicated to the Middle East and
17 per cent to the India subcontinent. Asia
Pacific is just a paltry three per cent and
Europe 10 per cent.
In Dubai, there are 70 five star hotels to
support tourism with another 17 due for
completion over the next two years. Over-
all, there are approximately 58,000 hotel
rooms with 10,984 more to be completed
next year and while the softer business
market has seen hotel room rates fall 30
per cent this has been a boon for tourism.
And the tourists are flocking in with
Emirates experiencing an 18 per cent jump
in traffic in July over the prior stanza. ere
are similar numbers at Qatar Airways and
Etihad had its busiest month ever in July
with 616,000 passengers, a nine per cent
increase on the prior year.
According to Hogan, on July 31 alone a
record 21,640 passengers at a load factor of
90.3 per cent flew with the airline through
Abu Dhabi. Load factor for July was 88.8
per cent across all cabins.
On the basis of those numbers Hogan
believes that airfares will start to rise
next year, particularly for long haul as the
airline sees demand holding up for its
Hogan said Etihad had been able to
maintain loads on most routes but had seen
pressure on yields.
"If you look at Melbourne and Sydney,
these flights are 80 per cent ,'' he told e
"We're running pretty good premium
penetration at the moment,'' Hogan added.
"Not where we'd like it to be, but it's still at
an acceptable level and I've got no doubt it
will come back. And when the market does
correct, we're in great shape to accelerate. ''
Hogan added that the airline was expe-
riencing some improvements in cargo and
some reversal in yield decline.
"For the consumer at the moment, it's
great for the passengers with great deals
out there. But as the markets correct, we're
confident as we go into 2010 pricing will
Clark also notes that more and more the
airline is finding that people are living in
Dubai and commuting each week to work
in Europe, the US and other countries in
the Middle East.
And Clark has some words of wisdom
for his competitors. " ere is not going
to be a paradigm shift in the market. It
hasn't changed forever and first class is
Clark scoffs that "the same people who
say first class is dead were turning their
backs on backpackers just two years ago." He
is adamant that "you can't stop the aspira-
tions of the people in China, India and
Brazil, they are going to want to travel. Eve-
ryone wants to travel... it is in our nature.
"Sure we have knocked it [the world
economy] down and the world is now
rebuilding and we have to do it smarter.
But we in the airline industry are masters
at this...we do it all the time with all the
shocks we have endured."
But Clark is not so sure the industry is
getting it right this time. "Business models
change all the time and we are now in the
grip of the 'amalgam group' with Europe
moving towards domination of three blocks
-- BA/Iberia, Air France/KLM and the
BUSINESS AS USUAL
"Where do we fit? Plans remain the
same and we haven't changed anything we
do and have kept our brand intact and grow
organically." While conceding that some
airlines have obligations to sharemarket
regulators, Clark said that an airline's brand
takes a hit every time CEOs say they are
taking on the unions to sur vive or shrink-
ing the network and grounding aircraft.
And the strong brands of Emirates, Eti-
had and Qatar have proven major bonuses
during the downturn, with the airlines
releasing more lower yield seats into the
market which have been snapped up by
travellers who were previously excluded
from buying by computer yield manage-
ose lower yield seats led to an effective
30 per cent decline in fare levels, a figure
Clark now regrets as traffic rocketed in
June and July. Clark said that he feels a bit
guilty for allowing the fares to fall as low
because the market "would have supported
high fares." Emirates has increased fares by
22 per cent since.
"We are getting great business from
Africa, Europe, China, India and Russia,"
Clark noted. And to tap into that demand
Emirates is launching ser vices to Dur-
ban and Luanda [Angola] in November,
adding frequencies to Cape Town and
Johannesburg, delinking Rome and Nice
and Tunis and Tripoli to give them all
e message is the same at Etihad Air-
ways. Its latest schedule which came into
effect in late October saw an increase of 15
per cent in flying with 950 flights a week.
Hyderabad ser vices start in November,
following Chicago and Cape Town as the
airline's newest routes.
Etihad has 44 aircraft in service with 118
on order, and by 2020 it plans to handle
25 million passengers with a network of
100 destinations and a fleet of 162 aircraft.
Deliveries of aircraft are approximately at
the rate of 11 a year.
Qatar Airways is also launching new
ser vices to add to its 82 destinations. New
ser vices started to Amritsar and Goa in
India in October and the airline is head-
ing downunder in December with flights
to Melbourne, while Sydney will be served
from 2010. Also on the radar are more
frequencies to Paris, Madrid, Athens and
Madrid is an excellent example of the
pioneering efforts of the Middle East air-
Clark has some words of wisdom for his competi-
tors. " ere is not going to be a paradigm shift
in the market. It hasn't changed forever and first
class is not dead."
photo -- Boeing
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