Is it economically viable for Emirates to use a 777 for some of these routes?

Question

This question may sound rhetorical or not well posed, but I wonder what the economic viability or sustainability of certain Emirates routes is.

Among its 164 destinations, Emirates is currently serving a whole host of non-major airports (airports which, according to this list, are not among the 30 busiest in the World). Among them are:

• Newcastle upon Tyne (NCL)
• Prague (PRG)
• Bologna (BLQ)
• Harare (HRE)

and so forth.

My question: on the majority of these routes, a Boeing 777 is deployed. But how economically viable could it be to fly such a high-capacity plane to destinations where the target market is not so wealthy or not big enough? In some of these instances, Emirates is the sole airline operating the Boeing 777. Also, I speculate that other airlines would probably use another, smaller aircraft to some of these destinations. I am sure Emirates does its market researches with adequate meticulousness before opening any new route, but I am still doubtful - couldn't the people living around Bologna take a train to Milan to get to Dubai, for instance, given their close proximity?

Answer 1

There are many reasons an airline may fly to a given destination and the economics of air travel are complex to say the least. I would like to fist address your question

couldn't the people living around Bologna take a train to Milan to get to Dubai

Sure they could but airlines don't only service locations because of the people that live there they may service them for the very people that don't. I fly both commercially and as a GA pilot to explore new places. I generally fly out of the Philadelphia area which is one of the busiest in the US. From there I head to plenty of tiny airstrips all over the place, none of these airstrips are in towns that are as economically prosperous or busy as Philadelphia but they see my travel because I wish to explore the area. The same goes for foreign airports, simply because a country is less economically prosperous or "busy" than another does not mean it has less to offer culturally and in fact may be a hot bed for tourism.

I have personally been to both Prague and Bologna and they are great cities both with large tourist markets. I can see it being very economical to fly a wide body airliner there full of tourists and maybe only a few locals. While layovers may attract the lower budget fliers there are plenty of people who prefer a direct flight for both the convenience and time savings.

You may be able to find more stats here.

Answer 2

I may try and answer for Bologna which could be a similar case as for other supposedly non busy airports. (I am from Bologna myself!)

I think the reason is that even though the airport is not on the top 30, Bologna itself is one of the busiest economic hubs in Italy. For example from here we have factories like Ferrari, Maserati, Lamborghini and Ducati which are all in the radius of 30 km from the airport.

So if it does not make sense passenger-wise I think it does commercially.

There is also another theory which I have heard from FastJet management (Low cost regional carrier in Tanzania) which serves neighbouring countries. Sometimes you do not have to serve where there is business. The simple fact that you are opening a new route will automatically create business. As an airline YOU are creating the business for many other sectors. This is very true for example for Harare where now, with FastJet there are a lot of people flying into Dar es Salaam to pick up used cars shipped from Japan. This was not happening before but it is now a reality and their flights are fully booked for months from Harare to Dar es Salaam. On the other way (DSM-Harare) there are not many passengers but the pilots are telling me that the plane is fully laden with cargo!

So sometimes it seems that a route is not profitable but probably because no one is doing it. The moment you open it up, BANG! like magic new businesses start to flourish!

Answer 3

Don't forget that aircraft size and link capacity are only loosely related, because it also depends on how many flights there are.

For example in case of Prague, I counted 6 departures to Frakfurt and 7 to Amsterdam a day, while only 2 to Dubai (the Emirates B77W and one SmartWings B738). So while the flights to Frankfurt and Amsterdam are all smaller planes (A319, A320, A321, to AMS some are even just E190), the capacity to both those destination is about double that to Dubai.

For the closer hubs, it makes more sense to fly smaller planes more often, because it can be more easily scaled (e.g. swapping A320 for A321; they don't even have to change the crew for that) and because it allows shorter transfer times, which the passengers obviously prefer.

However Dubai is much further and the small aircraft are less practical for that distance and for long trips, the stopover is smaller fraction of the travel time, so the passengers are more willing to accept it. So Emirates flies just once per day and uses large aircraft.

Answer 4

Eurostats provides information EU air passengers information, it details air passengers transport Each of EU countries and their main airport partner.

Based on the above link, there is the passengers information between Dubai and Newcastle/Prague.

Departure meanes the flights from the cities to dubai, and arrival stands for the flights from dubai to the two cities.

As you can see, the load factor for Newcastle and Prague is around 70%, both are lower than Emirates 79.6% average. Newcastle are serviced by 2-class B77W while Prague is serviced by 3-class b77w/a388.

Load factor of both cities are from 50% at low season to 80& at high season. Although load factor of Prague route is lower than Newcastle in 2015, please note that at that time Emirate ran this route by A388 instead of B77W.

PS: The nearest airport to Bologna which Emirates serves is Venice, not Milan,although the fastest way between 2 airports and Bologna are almost same.

Answer 5

[C]ouldn't the people living around Bologna take a train to Milan to get to Dubai... ?

Maybe. But even if they can, it's much less convenient. By the time you've factored in taking a train from the outskirts of your city to the centre, waiting for the connection, taking the one-hour train, arriving earlier than you wanted to because of the schedule, and allowing extra time in case the train's late, that can easily be 2hrs actual travelling.

Also, the time of the first train of the day might prevent you from taking morning flights. I used to use my local airport and travel via Amsterdam instead of taking a "75-minute" train to the regional airport and getting a direct flight. Not only was the 75-minute journey more like 135 minutes (because I had to get a local train to the city centre and wait for a connection) but, also, the first train of the day was at 0615, so it was impossible to be at the regional airport before about 0830, so you wouldn't want to take a flight before about 1030.

Yet another problem is that, if my trains had been late, I'd have been at the mercy of my travel insurance company and airline agreeing that I'd made reasonable efforts to get to the airport on time and not charging me to rebook the flight. If the shuttle flight to Amsterdam was late, it was unambiguously the airline's responsibility to get me to my destination.

Finally, Emirates aren't really about people flying to Dubai. Rather, they want to be a hub for people flying via Dubai. Flying to many different airports makes Dubai a more attractive hub, for example for people flying between Europe and the Asia/Pacific region. You probably don't care what hub you fly through but being able to go from your local airport rather than the regional one can make a big difference.

Answer 6

I don't think you have to dig much deeper that the fact that Emirates is exclusively an international carrier; and they have decided to standardize their fleet on the 777 and the A380 - this is actually more economical for them since they are able to get cost savings by only servicing two kinds of airframes.

Overall for them - it makes sense to standardize on these two kinds of aircraft, which means that no matter where they fly - it will either be on a 777 or a A380, no matter what the load ratio is.

This means you have some silly routing - such as flying an A380 from Dubai to Kuwait, a route exclusively serviced by the 737/A320/A321 family by every other carrier. Even Eithad (the UAE's national airline) flies this route on the A320.

For Emirates, when speaking of operations at their scale, it makes sense for them to fly a standard configuration, with a standard crew layout to all destinations. In fact, I would hazard a guess that most airlines would love to do what Emirates is able to, rather than having to service, train for and maintain different kinds of aircraft.

Answer 7

I guess one of the reasons for this wide-body use is because this is the primary aircraft for medium-haul routes in the Emirates Network. The 777 for Emirates is the workhorse of the Emirates airline and it has contributed to it's success. But in reality I do agree with you. Many Emirates routes that I have seen on YouTube do not have full aircraft which cannot be economically viable. But I guess this is why Emirates are so careful of assigning the A380 to a route. An example I can think of is Zurich which up till recently was operated by a 777. This is because the A380 is such a huge plane that it is only viable if the flight is packed. The 777 on the other hand is an aircraft that is used for a plethora of routes by Emirates. Reasons for this could be that it is the only widebody aircraft Emirates can use for this route.

Answer 8

It's very simple. Emirates is HEAVILY subsidized by the government of UAE. They are privately held by a government investment corporation which means any data on yield, load factors, PRASM, CASM, or profits are not to be trusted. They are trying to flood certain markets with capacity in order to kill competition and gain market share. It's a age old strategy in the aviation world, but it tends to not to work out so well in the long run. Its a great idea until you have a bunch of other airlines trying to do the same thing, then you end up with a HUGE glut of capacity and fares in the dumper! Eithad, Emirates, Saudia, Quatar, and Turkish airlines all seem to be flooding their markets with capacity, we shall see which country has the largest appetite for loss.