President of Emirates airline to retire in June after 17 years at helm

The president of Dubai-based airline Emirates will retire in June after 17 years at the helm of the Middle East's biggest carrier, the company confirmed Wednesday.

Tim Clark, who joined the airline in 1985 when it was first launched, will remain on as an adviser, the company told The Associated Press by email.

His retirement at the end of June 2020 was first announced by Emirates Chairman Sheikh Ahmed bin Saeed Al Maktoum in an internal company memo to employees on Tuesday. No details were given on who will succeed him.

The British aviation industry figure has gained a formidable reputation in the United Arab Emirates. Local media, which reported that Clark turned 70 in November, wrote glowing pieces about his tenure after news broke that he'd be stepping down as president.

The Dubai-based Gulf News described him as the "genius" who has headed the airline since 2003. Abu Dhabi-based The National said he helped take Emirates' growth "to dizzying heights".

The National noted that when Emirates began operations in 1985, it was leasing planes from Pakistan International Airlines, and now has a fleet of 270 aircraft that fly to 159 cities.

His biography on the airline's website describes him as "instrumental in the transformation of Emirates into the global giant it is today".

Emirates has expanded rapidly in the US and elsewhere in recent decades, operating daily flights to major North American cities like New York, Chicago and Los Angeles, among others.

It's main hub of Dubai International Airport is the world's busiest for international travel, with more than 89 million arrivals or transits in 2019.

Aviation and tourism are major pillars of Dubai's economy, and Emirates' success is key to that. The airline is known for its customer service, comfort and state-of-the-art aircraft.

Emirates' success and that of smaller rivals Qatar Airways and Abu Dhabi-based Etihad Airways has rattled big US airlines, which accuse the Gulf carriers of receiving billions of dollars of unfair government subsidies. They deny the allegations.

India's low-cost conqueror, Indigo, is coming for the likes of Emirates

Think Emirates just had a bad year? It’s about to get a whole lot worse.

The world’s largest airline by international passengers hit an air pocket in the 12 months through April, with net income falling by more than two-thirds to its lowest level since 2002.

On the far side of the Arabian Sea, meanwhile, an upstart competitor has been limbering up. InterGlobe Aviation Ltd. looks to have flown clear of a horror year for India’s aviation industry, posting a fourfold increase in fourth-quarter profit Monday as the collapse of Jet Airways India Ltd. allowed the rest of the industry to bounce back.

With 50% of India’s domestic market, the carrier known as IndiGo isn’t resting on its laurels. Capacity on international routes rose by 60%, compared with 24% domestic growth, to about a fifth of the total. A long-held dream for IndiGo – and India, for that matter – seems within grasp: to become a serious player on global routes.

That’s a threat to Gulf carriers such as Emirates. About a quarter of India’s international air traffic is carried on Gulf airlines, rising to almost 40% if you include Etihad Airways PJSC’s late partner Jet. More than half of Indians flying overseas travel via hub airports in the United Arab Emirates, and routes to and from India alone account for about 9.4 percent of Emirates’ traffic.

A major change came at the end of last year, when IndiGo received the first of the 150 A321neo aircraft it has on order. Those longer-range jets put all of the Middle East and East Asia within reach, and potentially a slice of eastern Europe. At some point, perhaps with an order for wide-body aircraft, low-cost flights to London might even be on the cards.

Most airlines have to be careful about expanding their international presence because such routes tend to be more competitive than the sewn-up domestic market where they’re based. In India, it’s the other way around, with steep fuel taxes levied only on domestic flights and short-haul tickets that sell for just a few rupees making overseas flying a relatively attractive option.

IndiGo’s fleet of single-aisle planes and no-frills services means its costs are drastically lower than the competition. Per available seat kilometer, it spent about 5.17 cents in the year through March, about a quarter less than the 6.8 cents expense at Emirates. On top of that, IndiGo’s revenue grew 13.6% in the past 12 months on international routes versus 6.2% domestically.

There are risks in going global. With the demise of Jet, IndiGo is the only carrier in the industry with a share of departures above the 20% level where adding flights leads to compounding benefits for passenger traffic. Should its share of departures hit 50% – which seems likely, given forecast 30% growth in capacity over the coming 12 months – the carrier’s passenger share ought to stand a good change of rising towards 60%, at which point its domestic position will be near-impregnable.

That’s probably the one danger for IndiGo in this strategy. Routes between India and the UAE are already at capacity, with further expansion dependent on diplomats agreeing to a revised air-services agreement in which Emirates and Etihad will want their interests protected.

Capital deployed on international routes is capital that won’t be deployed on sandbagging IndiGo’s formidable domestic position – and for all its dominance, the company is still not quite in the position of a Qantas Airways Ltd. or an ANA Holdings Inc. IndiGo’s destiny lies overseas – but while it turns its face to the world, it would do well to watch its back.

Emirates rethinks its route network for a world without the A380

Emirates, the world’s biggest long-haul airline, is reviewing its route network as it grapples with slowing economic growth and the demise of the A380 superjumbo, a plane that’s been the cornerstone of its strategic thinking for almost two decades.

Dubai-based Emirates has spent the past nine months “knocking down the network” to establish the optimum route profile both for itself and for the sheikdom, and is now close to the end of that exercise, President Tim Clark said at the 2019 Arabian Travel Market convention on Monday.

After establishing Dubai as the leading interchange for flights linking cities around the globe, Emirates is finding it tougher to find profitable new routes, especially with sluggish Persian Gulf economies weighing on margins. The state-owned airline was also unable to convince Airbus SE to upgrade the A380, forcing it to buy smaller jets requiring a recalibration of its super-hub model.

“We haven’t been growing at the pace we used to because of geopolitical issues in the region and elsewhere,” Clark said. “But that’s given us time to take stock of what the network is going to look like in five to ten years, and what the fleet fit in that network and the type of aircraft is going to be.”

Emirates dropped the A380 from its long-term plans after Airbus and engine maker Rolls-Royce Holdings Plc declined to invest in the double-decker, leaving a choice of buying “the same aircraft” or walking away, Clark said.

The airline resolved in February to purchase 70 A330neo and A350 wide-bodies while cutting its A380 order to 14 planes from 53. The two-engine jets will offer fuel savings but carry fewer people, complicating the Emirates operating model, which is built around waves of mass departures that are closely timed to maximize the scope for transfers between flights.

Dubai Airports Chief Executive Officer Paul Griffiths said separately at the 2019 CAPA Middle East & Africa Aviation Summit, also held in Dubai, that Airbus’s move to terminate the A380 programme following the Emirates decision represents a challenge for the hub model because of the limited flight capacity at many airports.

While Dubai’s new Al Maktoum facility will have plenty of room for additional flights to make up for the eventual retirement of the A380, other hubs — such as London Heathrow — are more constrained with little room at present for extra services.

US, India plans

Though all Emirates routes are “under the microscope” it remains possible that the airline could seek to operate more controversial “fifth freedom” routes to the US, in which flights originating in Dubai pick up passengers in a third country before taking them on to the US, Clark said.

Both a daily A380 service from Milan to New York and a Boeing 777 operation from Athens to Newark, New Jersey, are doing well and “the temptation is to do more,” he said. The routes have stoked anger among some US carriers and politicians who say Emirates and other Gulf carriers benefit from illegal aid, something they have denied.

India is a key market for Emirates and will remain so following an ongoing general election, Clark said, despite plans to tap growth there coming unstuck at Gulf rivals. Jet Airways India, part owned by Abu Dhabi-based Etihad Airways, ceased flights two weeks ago, while Qatar Airways has yet to launch its own Indian unit after announcing plans for a 100-plane airline in 2017.