In an exclusive interview, Emirates President Sir Tim Clark says more airlines will bring back the A380 adding they would be nuts not to.
Question: Right now we see almost an unexpected renaissance of the A380 even with carriers that had dumped it already like Qatar, is that going to last?
Sir Tim: Those aircraft will come back as simply demand is so strong now, and certainly for the next 18 months or two years the A380s will come into their own where they can be flown. More carriers will reactivate their A380s, they’d be nuts not to because they got to deal with this demand. They’ve got the yields as the fares are so much higher than they were, the passenger mix has changed as there is lots more of high-end business traveling, contrary to what everybody said, and people are prepared to travel. Alan Joyce of Qantas told me that of all Australians surveyed, 60 percent of them said they would leave Australia the moment they could go, which makes about 14 million people. And that doesn’t count all the people that would want to come into Australia and New Zealand.
And you mentioned higher yields in the premium cabins?
We [Emirates] are experiencing exceptional demand for our premium cabins. Where we have gone back into markets on a meaningful basis, unlike India or China still imposing harsh restrictions on flights that we can offer, the premium cabins and even the fares people are willing to pay in Economy are really strong. Like 30 to 40 percent higher in terms of what it means to us per seat kilometer. It might be short-lived but depends on how much capacity is returned to the market. So when people say they ground all their A380s that’s music to my ears. We are restoring the full network, the problem is to get all our crews back. It will probably take us till June or July of 2022 to get everything back to where it was and beyond, and the whole fleet as it stands then will be operating flat out.
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Which role does cargo play now and in the future?
The biggest problem, even if of high class, that we have is that cargo remains very strong and will stay strong for the next two years. Because of that, we have converted up to 17 passenger Boeing 777s to freighters. We could actually take the whole Emirates 777-fleet of about 160 aircraft as freighters and fill them up all the time. Cargo is much, much bigger than before the pandemic. You got a global container shortage, the ships are there, the containers aren’t. So just-in-time manufacturing needs to get their goods by air and air cargo has gone through the roof.
How is Emirates doing overall?
Last week we broke even, it was the first week we [Emiartes] turned to profit again and were cash positive with 95 A380s still sitting on the ground. The passenger market is coming back big time, also as the only place, people could come to and enjoy themselves has been Dubai since basically July of last year. We used to carry about 170.000 passengers a day, now are at about 60.000 to 70.000 a day. Cargo has almost doubled compared to before, but it’s the income that is different as the yield is much higher, so we are constrained by the number of aircraft that we have, we got eleven 777Fs plus all these conversions and the belly holds being filled up. And now the passenger operations are coming back at much higher yields, that’s why we are able to turn a profit with that number of passengers and most A380s grounded.
But these high yields will be short-lived, no?
Equilibrium requires supply and demand to be matched. When the demand is not matched by supply, two things happen: Prices rise of course, and people may switch out doing other things. The capacity over the next two years is going to be quite a lot less than it was in 2019. All the airlines have taken so much debt on their balance sheets, they can’t afford to open, they can’t afford to open loss-making long-haul routes, they can’t afford to buy new airplanes because that would cause new debts, so they’ve got to muddle through until they can restore the equilibrium. If that’s going to be in 2025 or in 2024 I don’t know. That’s why we will restore our network and our fleet back to its former glory quickly, maybe by May 2022.
What role in the recovery will your new Premium Economy Class play?
With the last A380s coming we will have six of them with the new cabin (above). They will probably run on routes like to London and Sydney. But we want to get Premium Economy into the fleet as quickly as possible. The new aircraft, 777-9, 787, A350 are all coming with it. To get the new cabin in by retrofitting doesn’t take long, maybe four days. One of the reasons we decided to retrofit was the delay of new aircraft coming in out of Boeing. We will start converting probably sometime next year, A380s and 777s at the same time possibly. We are looking to do it in Dubai, but there are all sorts of people ready to help out, quite hungry. We got to do 124 aircraft, as we are not doing it on aircraft returned to lessors, but it’s not happening overnight. Much of it will depend on how the timeline for deliveries of the new aircraft looks like. At the moment the first crack is a 124, going up to 192 in the most optimistic scenario, a mix of 777-300ERs and A380s. Currently, we have 118 A380s, three more are coming this year, two are out: The one first delivered to us is currently dismantled in Dubai World Central, another one it Tarbes, taken back by Airbus.
What do you want to convey to Airbus at the end of the A380 program?
It’s very interesting: Airbus said we don’t do celebrations for the retirement, we could put an A350-1000 next door – this is the future, this the past. I said to Guillaume Faury: This thing has got real life and legs for us, this is not a funeral, just the last of these great airplanes. Faury is one of the new brooms, he wants to be part of the future, not the past, and I don’t blame him. We want to make it something special. I said if you are not going to do it, we are doing it anyway. We want to invite media and other guys and take them from Finkenwerder to Dubai like on the first delivery in 2008. And we will fly the A380 until the mid-2030s, so we got 14-15 years before we retire them. That’s of course not a long life cycle for an aircraft newly delivered now, usually, you got 20-25 years and we’ve seen BA’s 747-400s flying 30 years.
Why was there so much back and forth with the dates of the last A380 delivery to Emirates?
Ask Airbus! We’ve had enough of it, it keeps slipping from September to October and now I aim to take the last aircraft on December 10th from Finkenwerder to Dubai. And I don’t know how the last A380 they ever produced can be late! It is very strange. We told them if you don’t give it to us by that date you can keep it to the summer of next year, as May 2022 was originally the date set for the last delivery, but then Airbus asked us to take it earlier and we obliged.