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Sdmccray1984
Topic Author
Posts: 28
Joined: Thu Apr 30, 2020 2:07 am

Will Emirates have to completely change business model?

Sat Jun 13, 2020 5:08 pm

As a frequent overseas traveler, I see that Emirates consistently has completely exorbitant fares. I mean, it’s utterly ridiculous, even if booked far in advance. So in this post-COVID world, I’m convinced that Emirates’ survival is contingent on appealing to a larger demographic (not just a “privileged” few). Am I wrong?
 
32andBelow
Posts: 4817
Joined: Mon Sep 03, 2012 2:54 am

Re: Will Emirates have to completely change business model?

Sat Jun 13, 2020 5:12 pm

I think Dubai will see a huge decline with global warming. Who is going to want to live and vacation in a place so hot?
 
Varsity1
Posts: 2206
Joined: Mon May 02, 2016 4:55 am

Re: Will Emirates have to completely change business model?

Sat Jun 13, 2020 5:25 pm

32andBelow wrote:
I think Dubai will see a huge decline with global warming. Who is going to want to live and vacation in a place so hot?


Uh, the same people who vacation in places like Las Vegas and Phoenix?

Air conditioning is a thing.
"PPRuNe will no longer allow discussions regarding Etihad Airlines, its employees, executives, agents, or other representatives. Such threads will be deleted." - ME3 thug airlines suing anyone who brings negative information public..
 
Avgeek21
Posts: 117
Joined: Mon Mar 04, 2019 5:44 am

Re: Will Emirates have to completely change business model?

Sat Jun 13, 2020 5:28 pm

32andBelow wrote:
I think Dubai will see a huge decline with global warming. Who is going to want to live and vacation in a place so hot?


Last 2 years it’s actually been noticeably colder here than previous years during summer. Obviously you’ve never been here or elsewhere in the Gulf.
 
SueD
Posts: 239
Joined: Sat Jul 27, 2019 11:35 am

Re: Will Emirates have to completely change business model?

Sat Jun 13, 2020 5:54 pm

Dubai has a rather nice inside snow resort and numerous air conditioned shopping malls.

Now to the thread opener; Firstly one of the usual complaints over the Emirates are LOWER fares especially on certains city pairs !

The business model is certainly far from broken and especially so from the prime centres moving Europeans via the desert to the Sub continent ASEAN and the antipodes !

The US to Sub continent market is more of an adjunct and not the prime mover imho.

Just look at pre COVID19 how many flights they operated with high density A380 and 77w over routes such as Birmingham or Manchester via Dubai Carrying traffic onto Bangkok and Australia in addition to India/Pakistan.

Compare that to say Dallas where they have frequently struggled with load margins.

Emirates will make some short term trimmings however mid term 18 months plus and I do expect them to be pretty much on target to a return to pre COVID levels right across the majority of the network.

Indeed many of A380s should be earning their keep once more and for some years to come.

The only real threat to Emirates would come from a revived and liberated Indian aviation market across some of prime corridors . However frankly I won’t hold my breath for any signs of action on that from Delhi anytime soon.

Protection of Air India remains front and foremost, and the GOI couldn’t negotiate beneficial Openxsky treaties if they tried.

Indeed the only one the they have of any consequence is with the UAE and that ironically sucks more of the valuable long haul traffic away from Indian carriers and benefits who exactly yeap that will be Emirates then !
Last edited by SueD on Sat Jun 13, 2020 5:58 pm, edited 2 times in total.
 
Gael23
Posts: 9
Joined: Sat Feb 16, 2019 6:18 pm

Re: Will Emirates have to completely change business model?

Sat Jun 13, 2020 5:55 pm

Emirates are close to the line of pricing themselves out of the market.
I’m researching a Christmas trip to Australia pending Coronavirus restrictions being lifted. It’s €1500 with EK ex DXB. €1200 with QF ex LXR or €1000 going 2 stop with SIA
 
myki
Posts: 198
Joined: Wed Sep 05, 2018 6:43 am

Re: Will Emirates have to completely change business model?

Sat Jun 13, 2020 6:03 pm

32andBelow wrote:
I think Dubai will see a huge decline with global warming. Who is going to want to live and vacation in a place so hot?

As much as the government would like, Dubai is not the main destination of EK travellers. Yes, for many, but for most it is A via B to C, with B being DXB only.
 
cledaybuck
Posts: 1690
Joined: Thu Aug 18, 2016 6:07 pm

Re: Will Emirates have to completely change business model?

Sat Jun 13, 2020 6:12 pm

32andBelow wrote:
I think Dubai will see a huge decline with global warming. Who is going to want to live and vacation in a place so hot?

Username checks out.
As we celebrate mediocrity, all the boys upstairs want to see, how much you'll pay for what you used to get for free.
 
SueD
Posts: 239
Joined: Sat Jul 27, 2019 11:35 am

Re: Will Emirates have to completely change business model?

Sat Jun 13, 2020 6:15 pm

Gael23 wrote:
Emirates are close to the line of pricing themselves out of the market.
I’m researching a Christmas trip to Australia pending Coronavirus restrictions being lifted. It’s €1500 with EK ex DXB. €1200 with QF ex LXR or €1000 going 2 stop with SIA


Right now Emirates are like others conserving cash and have yet to open many price buckets into the market place - Therefore the available range of fares are all on the high side or indeed the fully flexible dockets.

To be quoted lower fares ( with similar restrictions) via Singapore would be somewhat of a serious market change. Just check to see if one of those sectors isn’t actually Scoot and via Athens, Berlin or Istanbul rather than mainline !

I also doubt you mean Qantas via Luxor either !

Remember from many European secondary cities your Qantas flight could very well be an Emirates flight, cepting via Heathrow when it’s gong to be BA then
QF and although Qantas will price dump via the consolidators a number of connections and fares, these are of limited in supply .
 
32andBelow
Posts: 4817
Joined: Mon Sep 03, 2012 2:54 am

Re: Will Emirates have to completely change business model?

Sat Jun 13, 2020 6:25 pm

Avgeek21 wrote:
32andBelow wrote:
I think Dubai will see a huge decline with global warming. Who is going to want to live and vacation in a place so hot?


Last 2 years it’s actually been noticeably colder here than previous years during summer. Obviously you’ve never been here or elsewhere in the Gulf.

Global warming canceled then. Cool.

Do people really travel places to go to shopping malls or ski resorts with 100 feet of vert? Dubai has a weird layout where all the buildings are islands in freeways. Not walkable. Weird weird city.
 
SueD
Posts: 239
Joined: Sat Jul 27, 2019 11:35 am

Re: Will Emirates have to completely change business model?

Sat Jun 13, 2020 6:49 pm

Many British travellers do indeed travel to Dubai on holidays to see the snow run and those shops and of cause Burj Khalifa; Whilst not a few rather rich ( entertainers and sports families - well over paid I might add) own property in the Emirate.

Yes there is indeed a holiday industry and its integral the the Emirates development strategy for the 21st Century
 
directorguy
Posts: 1402
Joined: Mon Jul 28, 2008 10:58 am

Re: Will Emirates have to completely change business model?

Sat Jun 13, 2020 6:49 pm

32andBelow wrote:
Avgeek21 wrote:
32andBelow wrote:
I think Dubai will see a huge decline with global warming. Who is going to want to live and vacation in a place so hot?


Last 2 years it’s actually been noticeably colder here than previous years during summer. Obviously you’ve never been here or elsewhere in the Gulf.

Global warming canceled then. Cool.

Do people really travel places to go to shopping malls or ski resorts with 100 feet of vert? Dubai has a weird layout where all the buildings are islands in freeways. Not walkable. Weird weird city.


It’s weird to describe the appeal of Dubai but for many people in the Middle East or India (and arguably countries like Australia or the UK), Dubai is a very convenient place to go shopping, sightseeing, visit relatives (who doesn’t have a cousin or pal they want to hang out with in Dubai?). Yes the city doesn’t have much cultural heritage but the tourist experience is very streamlined making it hassle free for most visitors. Despite not having the best weather or beaches, they have some of the nicest hotels and resorts in the region.
 
ThomasCook
Posts: 729
Joined: Sun Aug 22, 2004 12:43 am

Re: Will Emirates have to completely change business model?

Sat Jun 13, 2020 7:00 pm

32andBelow wrote:
Avgeek21 wrote:
32andBelow wrote:
I think Dubai will see a huge decline with global warming. Who is going to want to live and vacation in a place so hot?


Last 2 years it’s actually been noticeably colder here than previous years during summer. Obviously you’ve never been here or elsewhere in the Gulf.

Global warming canceled then. Cool.

Do people really travel places to go to shopping malls or ski resorts with 100 feet of vert? Dubai has a weird layout where all the buildings are islands in freeways. Not walkable. Weird weird city.


I don't know what Dubai you've been to but that doesn't check out with the reality of it. It is indeed a hugely spread out city but so are most major cities. Few are condensed and solely walkable. The city has been future proofed and built very much with that vision front and centre. Downtown Dubai, DIFC, Marina and other major areas are very much 'walkable' as are the neighborhoods and shopping districts like Deira and Karama. All comes down to how far you wish to walk as well. There are no buildings on islands on the freeways. When it comes to the weather, well now it's getting hot, but you acclimatise. In winter it gets pretty cool and fresh. Lows of around 15C.

The city appeals to a broad spectrum of travellers. Those wanting to break up their journeys and rest at nice hotels or by the beach, do some shopping and so on. Some looking for a luxury city break for a weekend. Then you have the huge number of business travellers in the city and so on.

You seem a little Ill informed when it comes to Dubai. It's a pretty diverse places and along with Abu Dhabi, probably the most diverse in the gulf.

Back on topic. I guess those 'exorbitant' fares mentioned are completely subjective. The company hasn't had trouble filling it's flights before. Especially on trunk routes. There will of course be some right sizing now as is the case with every airline in the world. No carrier will walk away from COVID the same as they were before they went into it.

I do genuinely believe that a lot of the newer, more niche routes that aircraft such as the 787 were able to open up profitably - long and thin routes - will be among the last to return post COVID so that will be to the benefit of carriers like Emirates and suchlike scooping up the passengers and taking them to the nearest hubs. These secondary cities just won't be a priority for airlines getting back in their feet.
 
smartplane
Posts: 1474
Joined: Fri Aug 03, 2018 9:23 pm

Re: Will Emirates have to completely change business model?

Sat Jun 13, 2020 7:13 pm

EK / Dubai already making changes:

1. Country / DXB - welcoming a broader range of airlines, and more frequency from existing, with stimulus package.

2. Freight - targetting air and sea business, especially currently routed through HKG.

3. EK and FZ - increased co-operation.

4. Airports - DWC migrated to DXB (short-term).

5. Maintenance - End of lease service, not just for EK fleet, including storage at DWC.
 
MIflyer12
Posts: 7791
Joined: Mon Feb 18, 2013 11:58 pm

Re: Will Emirates have to completely change business model?

Sat Jun 13, 2020 7:19 pm

32andBelow wrote:
Avgeek21 wrote:
32andBelow wrote:
I think Dubai will see a huge decline with global warming. Who is going to want to live and vacation in a place so hot?


Last 2 years it’s actually been noticeably colder here than previous years during summer. Obviously you’ve never been here or elsewhere in the Gulf.

Global warming canceled then. Cool.


There's been some academic research on temperatures too hot for wide-scale human occupation. As an example:

The emergence of heat and humidity too severe for human tolerance

https://advances.sciencemag.org/content/6/19/eaaw1838

Of the stations along the Persian Gulf coastline with at least 50% data availability over 1979 to 2017, all have a historical 99.9th percentile of TW (the value exceeded roughly 14 times in 39 years) above 31°C (Fig. 1; see fig. S1 for the all-time maximum). In the ERA-Interim reanalysis, the highest values are similarly located over the Persian Gulf and immediately adjacent land areas, as well as parts of the Indus River Valley...


That doesn't mean people won't connect there but it has implications for ULH aircraft performance.
 
lalib
Posts: 109
Joined: Wed Feb 10, 2010 8:48 am

Re: Will Emirates have to completely change business model?

Sat Jun 13, 2020 7:23 pm

Flight Pricing depends on the City pairs and the time of year.

In Covid environment I would rather pay a premium and fly a well run airline in Y like EK. My choice is between TG and EK going to far east. I would avoid TG since BKK is a pain to transit in compared to Dxb (by no way perfect) but less congested than BKK.

As for EK survival, it's Dxb's flagship they will survive regardless. I wouldn't be surprised if in 5 years from now they only operate modern 2 holers.
 
airhansa
Posts: 380
Joined: Wed Jan 08, 2020 3:18 pm

Re: Will Emirates have to completely change business model?

Sat Jun 13, 2020 7:47 pm

Emirates is usually one of the cheapest airlines to fly long-haul on. In fact, that's exactly what the business model of the Gulf carriers has been to the dismay of western airlines. I actually consider the airline to be tacky and cheap.

In terms of why people would want to fly there, I agree that the Gulf isn't really a destination in itself. It has a hostile climate that's too hot to explore the outside, generally very regressive social policies, and Islamophobia is widespread enough that people will avoid the region on that basis alone. I also agree with the sentiment that Dubai isn't walkable or in anyway traversalable without spending the entire day in a car - it's very poorly designed from a tourist perspective - and completely hostile to a typical European and Asian used to little car usage.

The Gulf carriers will go the same way as the shipping companies of the Arab and Southern European world when a direct sea route to India was discovered. As technology advances so will new routes that avoid the hostile Middle East.
 
slcdeltarumd11
Posts: 4707
Joined: Fri Jan 09, 2004 7:30 am

Re: Will Emirates have to completely change business model?

Sat Jun 13, 2020 8:43 pm

I think Emirates business model will have to change based on how long and intense the virus lasts, but thats true for every airline and business. The problem is no one on Earth knows the future of the virus so it's just hard to plan. For an airline like Emirates this will certianly have to change their short term strategy . Long term they will probably try back to the old model ideally . All airlines have to be ready to pivot and be much more able to change. Like everything in life it's hard to plan here with everything so unknown. Emirates I am sure is working on cargo and other things but I cannot see them doing a huge change more just other short term strategies to slow cash burns. We might long term see them using smaller planes and stuff , just all depends on how demand goes.

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