Emirates chief, Sir Tim Clark, says the airline industry will bounce back strongly and his airline is planning for that recovery.
In an exclusive two-part interview, Sir Tim outlines his thoughts. In the second part, to be published on Wednesday, December 30, Sir Tim talks about premium economy, the A380 saga, and the 777X.
AR: Is anyone surprised that you are still Emirates’ President?
Sir Tim Clark: I couldn’t really leave the bridge in such times. I was due to leave at the end of August, already two months late from the appointed date, my boss Sheikh Ahmed seemed quite surprised seeing me standing in front of him saying: ‘Well, I’m off now’. He answered: ‘Where are you going?’. I said: ‘I’m leaving now’. He replied: ‘Are you really? No, no, no. Perhaps you could stay some days longer?’. I could see it was difficult for him, so I agreed to stay on until some time next year. When the time is right I should step aside.
You’ve said that repeatedly…
I’m a victim of my own big mouth. I’ve been with this thing for so long, it’s quite difficult to see it so stricken for reasons out of anybody’s control. But we stabilized the company right now and got it onto a firm cash footing with all the cargo flights and all the 777s working.
How many of Emirates ‘ total fleet is operating right now?
We got 269 aircraft of which 117 are A380s. We had three A380s delivered in December from Hamburg, and five more to come, two in 2021 and the last three are due in 2022, two in April, and the final one in May. We’ve got about 151 Boeing 777s, of which eleven are freighters. All 777s are operating; we got the all-freighter operation, we got passenger operations with cargo underneath, and we got 777 all-cargo operations where seats have been removed in Economy Class. So we fill up the bellies and the cabins of these aircraft with a lot of stuff, meaning we have basically three types of 777s operating. And we have four or five A380s in service, some of which have been used for freight operations.
Just four or five out of 114 A380s are in the air now?
What we do is we put different tail numbers on to rotate the aircraft and get them flying. So we indeed used eleven or 12 of the 114, but in terms of utilization a day, if you get 14 or 15 hours, sometimes you get even more out of an A380, it is only the equivalent of three or four aircraft. We were doing a double daily London, we were doing Paris, we are now doing Moscow, but that’s about it really. We are looking at removing seats on some A380s.
So you plan to use some A380s for all-cargo operations?
We are looking at it. The problem is that air cargo operations are highly automated. But when you cabin-load, you have to have a whole line of men, they have to manhandle the boxes up the steps and into the cabin. You need about 20 to 30 people who go up and down the stairs, taking the boxes, and they have to be secured and strapped in, it’s quite a big undertaking. And the aircraft turnaround times have already doubled when we use these passenger aircraft as freighters.
Where does the demand for flying cargo come from for Emirates?
We had some very interesting cargo recently, we had to take rubber from Thailand to Atlanta for example. An automotive manufacturer had tires manufactured in Thailand, but because they shut down the factories, they needed the rubber just in time for inventory purposes in the US and couldn’t send it by ship. We can get 30 to 40 tons of that in the belly of an A380. So we are getting some very bizarre requests for bespoke cargo operations. But it was highly lucrative because they are paying top dollars for it and it was worth for us flying an A380 for all that distance. Also the PPE and pharmaceutical cargo coming in, that is low weight high volume stuff, that’s where the 777 comes into play where you can fill up the bellies and put stuff in the cabin because it is not heavy. We charge on a per-kilo basis, so it’s quite lucrative for us.
Seems Emirates is one of the most successful passenger-turned-cargo carriers…
The cargo revenues have gone through the roof. We exceeded in 2020 already what we did last year when all the fleet was flying. At some point, about 80% of our revenue was cargo, although passenger numbers are starting to come back again. But cargo is really what is keeping us going. For the year to date, cargo is doing about 60% of our income, compared to about 10% last year. But in the passenger business, we are so far at only 18% of what we did last year. We got many things going for us – yields for cargo and passengers are much higher, fuel costs is lower, so the bottom line on the 777 fleet is positive, believe it or not. But our biggest problem is the carrying costs of the A380s. The debt has to be serviced. We’ve got to pay the monthly payments of interest. We have laid off a lot of the flight deck crews, but not all, we believe they are going to come back soon.
How did you adapt Emirates to this new way of doing business?
We kept our network intact, and there weren’t many wide-body operators that kept as many 777-300ERs flying as we could, with the distances it can fly and the payload it can carry. Many carriers couldn’t do it. And many carriers didn’t specify the large cargo door in the rear that we had built into our specifications, these were optional. That means we can take large numbers of cargo pallets in the aft hold, which ordinarily takes passenger bag containers. The ability to adapt the fleet as quickly as we did to meet the airfreight demand enabled us to get so many things flying. The crews really worked hard, some of them had to work double sectors within the flight time limitation rules. Some crews had to fly straight back, deadheading, with a new crew flying that had rested on the way out into countries without open hotels. There was a huge amount of adaptation to keep the airline going under very difficult circumstances.
You still have a few A380s to be delivered, what is the Emirates plan as of now?
The plan is to get three A380s still in December 2020. The one that is due on December 20th is the first one with our new Premium Economy that has been delayed due to the pandemic. But inside it’s spectacular. Three A380s will then be delivered next year and the final three in 2022, two in April, and the final one in May.
Recently you’ve stressed you’ll have all Emirates A380s in service again in 2022…
We have these A380s on for long-term debt. That’s one thing. What can we do with them, sell them? No, we can’t. But I am a firm believer in the ability of this aircraft to meet the demand post-pandemic. It may be accelerated or maybe a bit slower, but can I see our network being restored to its former glory? Of course, I can. Why not? The global economy is enormously resilient, it has taken enormous knocks in the past and it has always bounced back. The difference this time is, there won’t be that many competitors left with wide-body equipment to do what we can do. A lot of them are getting rid of their equipment, they want to pull off routes that are marginal, and as that happens, the hub and spoke system strengthens, not the other way round. If we can activate the A380 fleet, which we have to live with, we got no choice, but I think we’ll really have an advantage when we get this Premium Economy cabin going.