Business | Aviation
Emirates predicts strong demand for new US link
Emirates, which launched the Middle East's first direct air link to the US west coast this week, said yesterday it expects an average of more than 80 per cent passenger load factor for its Dubai-Los Angeles route.
- By Babu Das Augustine, Banking Editor
- Published: 23:43 October 29, 2008
Los Angeles: Emirates, which launched the Middle East's first direct air link to the US west coast this week, said yesterday it expects an average of more than 80 per cent passenger load factor for its Dubai-Los Angeles route.
"We don't see any problem in filling our plane in this sector. Currently, for the first and business class, we have nearly 100 per cent demand, while in the economy segment the average passenger load factor will be in excess of 80 per cent," Keith Longstaff, Emirates Senior Vice-President, commercial operations, Europe, told Gulf News on the sidelines of a press conference in Los Angeles on Wednesday.
Although the current economic turmoil in the US and Europe along with the labour strike at Boeing has had an impact on the airline's operations, these events so far have not affected Emirates' passenger load factor on its North American and European routes, he said.
"Our US flights are doing extremely well. The launch of the Airbus A380 in the New York sector has given us a big boost on that route," said Nigel L. Page, Emirates Senior Vice-President of commercial operations for the Americas.
Los Angeles joins Emirates' twice daily flights to New York's JFK International Airport and daily service to Houston's George Bush International Airport. On December 15, the airline is scheduled to start a non-stop flight to San Francisco.
"The delivery delays resulting from the strike at Boeing and the global economic turmoil has affected some of our new launch plans, but we expect these to be resolved during the next few months," added Longstaff.
The launch of the Dubai-Los Angeles route was postponed by more than a month due to delivery delays caused by a labour dispute at Boeing.
Emirates plans to increase the frequency of its Los Angeles flights from the current three a week to daily as soon as it takes delivery of its new planes from Boeing.
Commenting on the possibility of deploying the A380 on the Los Angeles sector, Longstaff said if the passenger demand justifies, it will clearly be an option in the future.
However, he said the airline's immediate priority is to deploy A380 aircraft on its London Heathrow and Sydney routes in December and February respectively.
Currently, Emirates has two A380s and it expects to take delivery of three more aircraft by the end of the first quarter of 2009.
With its fast-expanding North American network, Emirates expects to connect Asia, the Middle East and Africa to American destinations with a single stopover in Dubai.
Hedging losses no worry
The spectacular third-quarter drop in jet fuel prices have left many airline companies holding expensive hedges resulting in millions of dollars in accounting losses when these positions are marked to the current market prices of fuel.
"Low fuel prices are a welcome change for the industry. Given the volatility of fuel prices, hedging is worth it and we are not overly concerned about some costs resulting from a few positions we may be holding," said Keith Longstaff, Emirates Senior Vice President of Commercial operations for Europe.
Many US airlines were forced to write down hundreds of millions of dollars in hedging losses as fuel prices declined during the last quarter. As the price of fuel fell, airlines lost value and it may have forced some airlines to pay more than market prices.
Aviation industry analysts agree that a drop in oil prices by nearly 60 per cent from its July high is welcome relief for the industry and the noncash write-offs are minor compared with the money carriers stand to save on cheaper fuel.
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