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So Virgin gets no but Emirates is going to move in?

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So Virgin gets no but Emirates is going to move in?

Old 02-21-2007, 11:26 PM
Che Guevara
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Default So Virgin gets no but Emirates is going to move in?

Emirates is eyeing further expansion in North and South America following the launch of two new routes later this year, a senior Emirates executive tells The DAILY.

The airline has identified "seven or eight potential routes within the Americas that are viable for us," said Nigel Page, Emirates' senior VP for commercial operations in this region. Emirates is determined to "build up its network of routes" throughout North and South America, said Page.

Although he would not elaborate on timing or location of these routes, Page admitted that Emirates is very interested in starting service to Canada. But the airline would first need further liberalization of the aviation agreement between Canada and the United Arab Emirates to allow daily service.

Only six daily flights are allowed under the current bilateral, and half of those are being used by Etihad for flights into Toronto. This only leaves three weekly frequencies available, and that would not be economically viable for Emirates, Page said.

Emirates plans to launch Dubai-Houston nonstop service in December, which will be the airline's second U.S. gateway after New York. Flights will initially operate three times a week, but increase to daily service next February (DAILY, Feb. 9). The 17-hour Dubai-Houston leg will be the airline's longest.

The UAE has strong links to the Houston area through the oil industry, and Emirates has had an office in the city for 14 years, Page noted. The Houston flights will also draw passengers from the surrounding region, and even Central America. Passenger traffic between the U.S. and the United Arab Emirates has increased rapidly since Emirates opened its first U.S. route in 2004, and it is forecast to continue growing quickly.

Emirates also intends to introduce flights between Dubai and Sao Paulo in October. As with the Houston route, Emirates will use new Boeing 777-200LRs.

Competing airlines continue to portray Emirates as a heavily subsidized carrier, but there is no truth to these accusations, said Page during an International Aviation Club speech. The airline has received no government subsidies beyond an initial startup investment, pays listed airport charges and market rates for fuel, he said. Like other companies, Emirates pays no corporate taxes. Page reiterated that Emirates' ambitious fleet expansion plans are funded by internal cashflow and borrowing.

The airline's Boeing 777-300ERs deliver the best unit seat-mile costs in the industry, said Page, although these will be surpassed when Emirates eventually takes delivery of its Airbus A380s. Emirates' fleet has an average age of just 58 months, compared with an industry average of 180 months. The carrier's overall unit costs are the fifth-lowest in the industry, and it recorded the third-highest net profit in its last fiscal year, Page said.
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