Emirates Set For US Growth

Dubai based Emirates Airlines has announced that it is set to increase its US capacity for this coming Winter season, The Hub investigates the growing links between the United Arab Emirates and the US.

Emirates has announced that for this coming winter season it will double existing daily frequency on the largest cities of Texas and California with a double daily offering to Houston and Los Angeles to be operated with B777 equipment. The additions to existing capacity will be inaugurated from 31^st October (Los Angeles) and 01 November 1^st for Houston (IAH).

This comes as Emirates on October 31^st, will reinstate its superjumbo A380 aircraft into New York JFK after it was repositioned into other markets, namely Toronto and Bangkok, following a slump in premium demand on the route.

CURRENT MARKET POSITION

Emirates is currently the largest scheduled seat provider between the Middle East and the US, offering 11,361 weekly seats from Dubai with a scheduled seat capacity share of 21%. Emirates also serves San Francisco from its Dubai hub making a total of four destinations that it serves in the Unites States. In terms of Emirates major Middle East competitors, Qatar Airways and Etihad Airways. The gap analysis below shows the weekly routes currently served out of their respective hubs, Dubai, Doha and Abu Dhabi.

Source Flightbase 14-20 November 2010

Emirates has been able to grow capacity into the US on markets where the American carriers have not been able to, given the small O+D market between the US and Dubai.Only United Airlines and Delta Air Lines currently serve Dubai.

The table below, taken from IATA BSP data (Airport IS), shows passenger share from the Middle East to the US by carrier for the period between June 2009-10. Emirates is the third largest carrier with El Al leading with services from Tel Aviv.

Source IATA BSP data (Airport IS) November 2009-10

TRADE LINKS

There are growing business links between the UAE and the United States worth an estimated 12.4 billion dollars in the 12 months leading to 2010, which has tripled since the inauguration of Emirates 2004 debut into the US with service to New York. The increased capacity is a sign of growing confidence in the business community. These air services have helped facilitate trade, carrying oil, financial and military traffic. The route will be supported by belly freight with the UAE being the largest consumer of American exports in the Middle East and North Africa. Key imports include heavy machinery, while over 750 American companies have offices in Dubai.

The strong business demand is reflected in passenger segmentation from Dubai and the US. Of the 494,000 O+D passengers travelling between Dubai and the US on Emirates, 30% were either business or first-class passengers which will help support the case for increased capacity into the US. Emirates also provides excellent connectivity to the sub continent which is a strong market from North America.

Emirates has publicly stated that it intends to continue to grow its market share from the Middle East to the US with a view not just of increasing capacity in existing markets but also of looking at new destinations. With over 4 million passengers flying between the Middle East and the US (two-way) interestingly only 1.8 million flew on non-stop services showing potential for new destinations.

WHERE COULD EMIRATES LOOK TO NEXT?

There are several markets in the US that could be of interest that are not served. Dallas Fort Worth is another market showing potential. With over 67,000 passengers flying from the Middle East to Dallas Fort Worth between June 2009-2010. Chicago could be an interesting market for Emirates, served on a daily basis from Abu Dhabi by Etihad, 66,448 passengers flew from the Middle East to the US, with Etihad having a 12% share of the market and Royal Jordanian a 22% share with its Amman to Chicago service.

Seattle could also be of interest. Between June 09-10, over 46,000 two way passengers flew from the Middle East to Seattle, with Continental Airlines having an 11% share of this market.