For Boeing executives, the last few days may seem just like a dream. An order from Emirates for some 40 B787’s and a thumbs down on a highly anticipated order for A380’s casts further doubt on the continued production of the capacity giant.
Behind the headline is perhaps a subtle change in strategy for Emirates and an acceptance that big is not entirely beautiful in a changing world full of competition and uncertainty. This winter sees the first slowdown in overall capacity supplied season on season from the big three Middle East carriers for many years. Whilst Qatar Airways capacity cuts are clearly not of their choice, Emirates have also reduced frequency by 1% and Etihad by some 3%. A hiatus in aircraft deliveries for all carriers in 2017 may account for the slowdown but competitive pressure is building from all sides.
Low-cost long-haul continues to muddy the waters for many carriers and whilst the battle ground has until this point been across the North Atlantic and within Asia attention is now turning to the Europe – Asia market. Early services from Norwegian, Scoot and Air Asia represent a challenge to the 6th Freedom hub networks that have successfully grown in the Middle East.
Legacy South East Asian carriers continue to downsize aircraft types deployed on services to Europe, preferring to use “right sized” aircraft types such as the A350 and B787 rather than chase low yield traffic that A380 services demand. With increasing competition from Chinese carriers and their aspirational hub operations, the market is certainly competitive.
For Emirates, assuming that no A380 order is forthcoming, then by 2022 when the B787’s are scheduled for delivery competition could be at its fiercest. At that point, swapping out A380’s for smaller, more efficient, aircraft such as the A350 and B787 may make great sense; after all, if profit is king then capacity is not everything.
From a network perspective, by the planned delivery dates new markets will have reached a point of sufficient scale for operation and the new opportunities might excite even the most pragmatic network planner. Could 2022 see the introduction of a new “around the world” airline with services from Dubai to Sydney, onwards to Santiago and then home to Dubai….a network planners dream!