Dubai carrier Emirates to get A380s despite Airbus cutback

Emirates airline, the biggest operator of the world’s largest passenger jet, said deliveries of the A380 in 2018 “will not be impacted”, after Airbus announced a sharp cut in production.

The European plane maker announced it was limiting the production of its superjumbo because of a lack of demand. It will only make one aircraft a month in 2018, down from the 27 built last year.

The A380, which can carry about 540 passengers, has been key to Emirates’s global route expansion and the surging traffic numbers through its hub at Dubai International Airport, which is the world’s busiest airport for international travel. The carrier operates 81 of the superjumbos and has another 61 on order, according to its latest fact sheet.

But while the aircraft has suited the rapid growth trajectory of Emirates and Dubai’s hub strategy, its take up among many other global carriers has been slow.

Airbus had originally anticipated that it would sell 1,200 jets over two decades, but the manufacturer has delivered only 193 of the double-deckers since it came into service in 2007.

Airbus initially anticipated that mega airport hubs would welcome the arrival of the A380 plane, as it means 540 passengers or more will be moved in one go, but the reality of global aviation was different.

Operating a four-engine aircraft is costly and twin-jet, wide-body planes have proved to be more popular.

Boeing, its American rival, viewed things differently. It bet on travellers demanding more frequencies and time options to routes, which led it to develop medium size wide-body aircraft.

It developed the 787 Dreamliner along with the Boeing 777 aircraft with this purpose. Meanwhile, its own version of the A380, the 747-8 aircraft, had a fewer number of buyers – much worse than the Airbus superjumbo.

“We do believe with the dawn of ultra-long range medium to sub-medium capacity aircraft such as the A350XWB, the 787 and the 777-X and the Bombardier C series, which flies marginally longer than the Embraer 190 family, the market for the A380 has shrunk to levels Airbus may not have anticipated,” said Mark Martin, the chief executive of Martin Consulting in Dubai.

Emirates has remained a firm believer of the A380 and has made it the backbone of its fleet.

Tim Clark, Emirates Airline’s president, kept pushing Airbus for a more fuel-efficient model of the plane. Fuel is the largest component of an airline’s cost and makes up 28 per cent of Emirates’ operating costs. But Mr Clark eventually gave up on the improved version, saying he was concerned with the future of the aircraft.

“A 500 plus-seater isn’t everyone’s cup of tea and such jets are hard to fill. This is precisely why the A380 is a sales flop. Airlines other than Emirates struggle to fill it,” said Saj Ahmad, the chief analyst at StrategicAero Research.

In April, Sheikh Ahmed bin Saeed, Chairman of Dubai Civil Aviation Authority and Chairman of Emirates Group, urged Airbus to push its sales team harder to find more customers for the aircraft. “Where is an aircraft with just one customer?” Sheikh Ahmed said. “They have to push their sales team to do much better, especially now, because this aircraft has been in the market for eight years.”

The A380 programme has been in question since 2014, when Airbus first raised the possibility of discontinuing production because of a lack of new orders. That triggered a number of exchanges between executives from Emirates and Airbus over the programme’s future.

Emirates ordered two superjumbos in April, the first new A380 purchase from the Dubai airline since 2013, when it took 50 of the aircraft. “Emirates will take their full 2018 quota, but beyond them, there aren’t any big customers left,” Mr Ahmad said.

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A380 deliveries to Dubai's Emirates not affected despite Airbus production cutback

Emirates airline, the biggest operator of the world’s largest passenger jet, said deliveries of the A380 in 2018 “will not be impacted”, after Airbus announced a sharp cut in production.

The European plane maker announced it was limiting the production of its superjumbo because of a lack of demand. It will only make one aircraft a month in 2018, down from the 27 built last year.

The A380, which can carry about 540 passengers, has been key to Emirates’s global route expansion and the surging traffic numbers through its hub at Dubai International Airport, which is the world’s busiest airport for international travel. The carrier operates 81 of the superjumbos and has another 61 on order, according to its latest fact sheet.

But while the aircraft has suited the rapid growth trajectory of Emirates and Dubai’s hub strategy, its take up among many other global carriers has been slow.

Airbus had originally anticipated that it would sell 1,200 jets over two decades, but the manufacturer has delivered only 193 of the double-deckers since it came into service in 2007.

Airbus initially anticipated that mega airport hubs would welcome the arrival of the A380 plane, as it means 540 passengers or more will be moved in one go, but the reality of global aviation was different.

Operating a four-engine aircraft is costly and twin-jet, wide-body planes have proved to be more popular.

Boeing, its American rival, viewed things differently. It bet on travellers demanding more frequencies and time options to routes, which led it to develop medium size wide-body aircraft.

It developed the 787 Dreamliner along with the Boeing 777 aircraft for this purpose. Meanwhile, its own version of the A380, the 747-8 aircraft, had a fewer number of buyers – much worse than the Airbus superjumbo.

“We do believe with the dawn of ultra-long range medium to sub-medium capacity aircraft such as the A350XWB, the 787 and the 777-X and the Bombardier C series, which flies marginally longer than the Embraer 190 family, the market for the A380 has shrunk to levels Airbus may not have anticipated,” said Mark Martin, the chief executive of Martin Consulting in Dubai.

Emirates has remained a firm believer of the A380 and has made it the backbone of its fleet.

Tim Clark, Emirates Airline’s president, kept pushing Airbus for a more fuel-efficient model of the plane. Fuel is the largest component of an airline’s cost and makes up 28 per cent of Emirates’ operating costs. But Mr Clark eventually gave up on the improved version, saying he was concerned with the future of the aircraft.

“A 500 plus-seater isn’t everyone’s cup of tea and such jets are hard to fill. This is precisely why the A380 is a sales flop. Airlines other than Emirates struggle to fill it,” said Saj Ahmad, the chief analyst at StrategicAero Research.

In April, Sheikh Ahmed bin Saeed, Chairman of Dubai Civil Aviation Authority and Chairman of Emirates Group, urged Airbus to push its sales team harder to find more customers for the aircraft. “Where is an aircraft with just one customer?” Sheikh Ahmed said. “They have to push their sales team to do much better, especially now, because this aircraft has been in the market for eight years.”

The A380 programme has been in question since 2014, when Airbus first raised the possibility of discontinuing production because of a lack of new orders. That triggered a number of exchanges between executives from Emirates and Airbus over the programme’s future.

Emirates ordered two superjumbos in April, the first new A380 purchase from the Dubai airline since 2013, when it took 50 of the aircraft. “Emirates will take their full 2018 quota, but beyond them, there aren’t any big customers left,” Mr Ahmad said.

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Employee benefits in UAE are still rising, but only slowly

Companies in the UAE and Saudi Arabia are increasing their spending on employee allowances and benefits at one of the slowest rates in recent years, because of the current macroeconomic environment.

According to a report by Aon Hewitt, the human resources and consulting company, allowances and benefits this year increased by 5 per cent year on year, slower than in previous years.

This increase represents about a third of that seen in previous years across areas such as housing, transport and education allowances.

In the UAE, education allowances increased by 5 per cent and ranged from Dh25,000 per child for junior executives to Dh58,000 for senior managers.

Housing allowances rose by an average of 4 per cent. These ranged between Dh43,000 and Dh225,000 in the UAE.

The report said that companies are still keen on attracting and retaining talent from around the world. But they are also spending conservatively.

Aon Hewitt said that “the 2016 increase in allowances is in part explained by a few organisations doing a market correction rather than an overall increase across the board”.

Trefor Murphy, the chief executive of Cooper Fitch, a recruitment consultancy in ­Dubai, said that it is hard to say if all companies in the UAE are reducing their employee ­benefits.

He said companies that are not increasing their allowances are mostly in the oil and gas and the finance sectors.

But there are other areas of the economy that are doing well despite the decline in oil prices, such as health care, fast moving consumer goods and IT.

“In Saudi Arabia, there are organisations that are booming and attracting talent from all over the world. Consultancy firms such as management consultants and tax specialists are growing exponentially,” Mr Murphy said.

Looking ahead, Mr Murphy said there will be significant growth in the next two to three years triggered by Expo 2020 in Dubai.

“We see 2016 as a flat year overall in terms of job creation, 2015 was a minus year as well, but [from] 2017 demand will pick up all the way to 2020.”

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Qatar Airways posts four-fold profit rise amid route expansion

Qatar Airways Group’s net profit increased more than four-fold in its last financial year as the airline cut costs and expanded routes, which offset foreign ­currency movements and growth of operations.

The group, which owns flag carrier Qatar Airways, posted 1.6 billion Qatari riyals in net profit for the financial year that ended on March 31, a 328 per cent increase on the 374 million riyals achieved the previous year.

This is the first time the group has published its financial results. US and European carriers have criticised Qatar Airways and other Arabian Gulf airlines for allegedly receiving billions of dollars in state subsidies – a claim the Gulf carriers have denied.

During the past financial year, the group reduced its expenses by 1.5 per cent and increased its cash and bank balance to 12bn riyals from 5.5bn riyals, despite a significant growth in operations and an adverse movement in foreign currency exchange.

The Qatari airline added 13 new destinations during the fiscal year to the end of March. These include Amsterdam, Boston, Los Angeles and Zanzibar. It plans to add 17 destinations this financial year, which include Auckland, Helsinki and Pisa.

Qatar Airways changed its strategy last year, when it acquired a stake in IAG, the parent company of British Airways and Spanish carrier Iberia. In May, it raised its stake in IAG to 15 per cent. Bloomberg has reported the airline could boost this to 20 per cent. IAG has lost a third of its market value after the UK voted to leave the European Union.

Akbar Al Baker, the group chief executive, is also considering the acquisition of a 25 per cent to 49 per cent stake in the Moroccan flag carrier, Royal Air Maroc. Mr Al Baker envisions turning the Casablanca base of Royal Air Maroc into a hub that connects north and west Africa.

Qatar’s Hamad International Airport, the base of Qatar Airways, served 30 million passengers last year. But competition between Gulf airport hubs will become fierce with the opening of Oman’s new airport.

“Hamad airport will compete with the new airport in Muscat, which will open from 2018 to 2020,” said Mark Martin, the chief executive of Martin Consulting in Dubai.

The Gulf airlines and their transit hubs are competing aggressively. Dubai International has, however, retained its rank as the world’s busiest airport for international passenger traffic and expects to receive 85 million passengers this year.

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Etisalat to compete with Skype, Facebook as it launches Voice over LTE calling

Etisalat will compete with chat apps such as Skype, Facebook and Google Hangouts by offering a “high-definition” version of its voice and video calls.

The telecoms operator said it would use Voice over LTE (VoLTE) service, an evolution of existing voice services that improves the quality of voice and video calls by sending them over its 4G LTE data network instead of its traditional voice network.

The new service will operate like any ordinary call and will not require any special app to operate. However, a device that enables VoLTE calls will be needed.

Etisalat said that at the time of the launch, the service will be enabled by Samsung devices only, but will soon be made on other devices too.

“Although internet-based chat apps and messengers have gained popularity in recent years, voice calls continue to matter most when people want real-time, interactive and instantly gratifying connection with their families, friends or colleagues,” said Saleh Al Abdooli, the group chief executive at Etisalat.

Matthew Reed, the practice leader for Middle East and Africa at Ovum, a consultancy specialised in the global coverage of IT and telecommunications, said “for operators, the chief reason to introduce VoLTE is that it will allow them to transfer voice traffic from their older 2G and 3G networks and carry it instead over their 4G LTE networks, which are more efficient.”

“Additionally, VoLTE promises better-quality calls and operators such as AT& T in the US are offering new services such as video calling alongside VoLTE, and they are hoping that these features of VoLTE will help them to counter the appeal of alternative services from the likes of Google and Skype.”

Etisalat already offers video calling over its 3G network.

According to Ovum’s research, it is still early days for VoLTE. A small, but growing, number of devices supports VoLTE and commercial VoLTE services have been launched in only 30 countries so far.

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Etisalat to challenge appeal of Skype, Facebook as it launches Voice over LTE calling

Etisalat aims to counter the appeal of chat apps such as Skype, Facebook and Google Hangouts by offering a “high-definition” version of its voice and video calls.

The telecoms operator said it would start to use Voice over LTE (VoLTE) service, an evolution of existing voice services that improves the quality of voice and video calls by sending them over its 4G LTE data network instead of its traditional voice network.

The new service will operate and be charged the same as any ordinary call and will not require any special app to operate. However, a device that enables VoLTE calls will be needed.

Etisalat said that at the time of the launch, the service will be enabled by Samsung devices only, but will soon be made on other devices too.

“Although internet-based chat apps and messengers have gained popularity in recent years, voice calls continue to matter most when people want real-time, interactive and instantly gratifying connection with their families, friends or colleagues,” said Saleh Al Abdooli, the group chief executive at Etisalat.

Matthew Reed, the practice leader for Middle East and Africa at Ovum, a consultancy specialised in the global coverage of IT and telecommunications, said “for operators, the chief reason to introduce VoLTE is that it will allow them to transfer voice traffic from their older 2G and 3G networks and carry it instead over their 4G LTE networks, which are more efficient.”

“Additionally, VoLTE promises better-quality calls and operators such as AT& T in the US are offering new services such as video calling alongside VoLTE, and they are hoping that these features of VoLTE will help them to counter the appeal of alternative services from the likes of Google and Skype.”

Etisalat already offers video calling over its 3G network.

According to Ovum’s research, it is still early days for VoLTE. A small, but growing, number of devices supports VoLTE and commercial VoLTE services have been launched in only 30 countries so far.

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Dubai International Airport passenger numbers climb ever higher

Passenger numbers at Dubai International Airport rose by 7.2 per cent year on year in May to 6.7 million, led by a surge from the Arabian Gulf and eastern Europe.

During the first five months of the year, Dubai International welcomed 34.6 million passengers through the airport, a 7 per cent increase on the 32.3 million passengers during the same period a year ago.

Eastern Europe was the fastest-growing source market in May, rising by 16.6 per cent, followed by travellers from the Gulf, up 16.3 per cent, and Asia, up 10 per cent.

India was the biggest source country, providing more than 980,000 visitors, followed by Saudi Arabia, the United Kingdom and Pakistan.

“With near-record numbers expected in the coming weeks as a result of the seasonal ­travel peak, we are looking at solid growth for the first half of 2016,” said Paul Griffiths, the chief executive of Dubai ­Airports.

“Our focus is on maintaining and enhancing service levels, despite the high volumes,” he said.

Cargo volume through the airport increased by 4.7 per cent in May to more than 226,000 tonnes compared with more than 216,000 tonnes in May last year.

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Dubai International Airport passenger numbers climb ever higher

Passenger numbers at Dubai International Airport rose by 7.2 per cent year on year in May to 6.7 million, led by a surge from the Arabian Gulf and eastern Europe.

During the first five months of the year, Dubai International welcomed 34.6 million passengers through the airport, a 7 per cent increase on the 32.3 million passengers during the same period a year ago.

Eastern Europe was the fastest-growing source market in May, rising by 16.6 per cent, followed by travellers from the Gulf, up 16.3 per cent, and Asia, up 10 per cent.

India was the biggest source country, providing more than 980,000 visitors, followed by Saudi Arabia, the United Kingdom and Pakistan.

“With near-record numbers expected in the coming weeks as a result of the seasonal ­travel peak, we are looking at solid growth for the first half of 2016,” said Paul Griffiths, the chief executive of Dubai ­Airports.

“Our focus is on maintaining and enhancing service levels, despite the high volumes,” he said.

Cargo volume through the airport increased by 4.7 per cent in May to more than 226,000 tonnes compared with more than 216,000 tonnes in May last year.

selgazzar@thenational.ae

Follow The National’s Business section on Twitter

Dubai International Airport passenger numbers climb ever higher

Passenger numbers at Dubai International Airport rose by 7.2 per cent year on year in May to 6.7 million, led by a surge from the Arabian Gulf and eastern Europe.

During the first five months of the year, Dubai International welcomed 34.6 million passengers through the airport, a 7 per cent increase on the 32.3 million passengers during the same period a year ago.

Eastern Europe was the fastest-growing source market in May, rising by 16.6 per cent, followed by travellers from the Gulf, up 16.3 per cent, and Asia, up 10 per cent.

India was the biggest source country, providing more than 980,000 visitors, followed by Saudi Arabia, the United Kingdom and Pakistan.

“With near-record numbers expected in the coming weeks as a result of the seasonal ­travel peak, we are looking at solid growth for the first half of 2016,” said Paul Griffiths, the chief executive of Dubai ­Airports.

“Our focus is on maintaining and enhancing service levels, despite the high volumes,” he said.

Cargo volume through the airport increased by 4.7 per cent in May to more than 226,000 tonnes compared with more than 216,000 tonnes in May last year.

selgazzar@thenational.ae

Follow The National’s Business section on Twitter

Dubai International Airport passenger numbers climb ever higher

Passenger numbers at Dubai International Airport rose by 7.2 per cent year on year in May to 6.7 million, led by a surge from the Arabian Gulf and eastern Europe.

During the first five months of the year, Dubai International welcomed 34.6 million passengers through the airport, a 7 per cent increase on the 32.3 million passengers during the same period a year ago.

Eastern Europe was the fastest-growing source market in May, rising by 16.6 per cent, followed by travellers from the Gulf, up 16.3 per cent, and Asia, up 10 per cent.

India was the biggest source country, providing more than 980,000 visitors, followed by Saudi Arabia, the United Kingdom and Pakistan.

“With near-record numbers expected in the coming weeks as a result of the seasonal ­travel peak, we are looking at solid growth for the first half of 2016,” said Paul Griffiths, the chief executive of Dubai ­Airports.

“Our focus is on maintaining and enhancing service levels, despite the high volumes,” he said.

Cargo volume through the airport increased by 4.7 per cent in May to more than 226,000 tonnes compared with more than 216,000 tonnes in May last year.

selgazzar@thenational.ae

Follow The National’s Business section on Twitter