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17 June 2010
The recent purchase is part of Emirates' efforts to expand its routes and gain market share in Asia, Europe and the United States. Airbus spokeswoman Maryanne Greczyn says that the Dubai-based airline's spending of $11.5 billion on wide-bodied, double-decker planes shows the overall aviation industry is recovering.
"It's very good news and Emirates is a strong customer," she said. "They are a strong airline in a greatly emerging economy. So it's a good bellwether for the industry."
The purchase comes as worldwide aviation is emerging from a disastrous 2009. Last year, airlines lost $9.9 billion when passenger traffic fell 2.1 percent and air cargo dropped nearly 10 percent. Industry revenues fell 15 percent, to $479 billion.
Steve Lott is with the International Air Transport Association (IATA), which represents 230 airlines and covers 93 percent of the scheduled international air traffic. He told VOA that, with the world economy slowly emerging from recession, aviation is expected to post a profit this year. Lott said the Emirates purchase is an indicator of the Dubai-based airlines' confidence that the market will improve.
"So for this year, in the forecast we just issued a few days ago, we are predicting that the industry will return to profit, posting a global profit of $2.5 billion in 2010. The major exception, however, remains Europe," he said.
April's eruption of the Eyjafjallajokull volcano in Iceland and the subsequent closure of European airspace because of the ash cloud drove profits down in Europe. Steve Lott says the Greek economic crisis and the fall of the Euro against the dollar have also slowed profits in Europe.
"Europe has seemed to have lagged the rest of the world in terms of economic recovery," he said. "Some of that is due largely to the Greek debt crisis and some of the financial problems in other countries. Germany announced major budget cuts and problems with their budget. And this is all really accumulating in a weak European economy."
Jami Counter is the senior director of TripAdvisor Flights, the Meta search engine for Tripadvisor.com. He told VOA that the Emirates' home in Dubai is strategically located to make it a world aviation center.
"It actually geographically is well situated to be a connecting hub through from Europe and even the East Coast of North America over to Asia and Australia," said Counter. "And obviously connects well in to Africa as well. So from a geographic situation, it is about as well situated to be a world-connecting hub as one could pick."
Maryanne Greczyn of Airbus says Emirate's buying of A-380s was not really surprising because of the economic health of the Gulf region. "That region of the world, the Middle East, is one of the fastest growing markets for air travel in the world. And Emirates has been very, very happy and very successful with their A-380s thus far," said Maryanne.
Choosing the A-380 was not without controversy. The airplane has been hit by lengthy production delays, and the cabins of the huge aircraft require more customization than other planes. But this deal gives Emirates 90 of the planes, the largest fleet of the super-jumbos worldwide.
This year marks Emirates airlines 25th year in business. More than one-quarter of Emirates' revenues come from Australasia and East Asia. Right now, the Middle East and Iran contribute only less than one-eighth of the traffic.
Emirates' business model is based on carrying the world through Dubai. With the new fleet of superjumbo jets, it appears the airline is ready to do exactly that.
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