Emirates to spend $1.5 billion to retrofit aircraft with premium economy seats

Dubai: Emirates airline will grow its fleet to pre-COVID levels and is spending $1.5 billion to retrofit and upgrade its modern wide-body aircraft, according to Tim Clark, President of the Dubai-based carrier.

“We will maximise the opportunity (and) we will grow our fleet to the levels that we had prior to COVID and more,” Clark said, during a CAPA (Center for Aviation) airline summit on Thursday.

“We’re going to have a retrofit programme (and) we’re spending $1.5 billion of our own cash getting that done to raise the product standards, expand the network and take us well beyond where we were prior to 2019,” Clark said.

Last year, Emirates announced that it will retrofit 105 of its modern wide-body aircraft with its Premium Economy product, in addition to other cabin enhancements. The 18-month programme, which will begin at the end of 2022, will see 52 Emirates A380s and 53 Boeing 777s fitted with the new cabin class.

Wide-body return

Although the pandemic has prompted airlines everywhere to shift to narrow-body aircraft, bigger planes will make a comeback, according to Clark.

Large aircraft units will have a greater ‘economic multiplier’ effect on the aviation industry, Clark said, adding that airport operators will benefit more from the higher passenger numbers brought in by bigger planes.

“If you have a 200-seater and we have got a 600-seater going in, that slot carries huge opportunity costs,” Clark said.

IPO demand

When reports emerged last year about the Emirates Group considering an IPO (initial public offering), Clark said he saw immediate interest from bankers, despite concerns related to the airline’s ability to meet ESG (environmental, social and governance) standards.

“I had to disconnect the phones because every banker in the world was on our door saying we've got investors who want to chuck money at you,” the Emirates President said.

Clark said Emirates has a strong business model and that the airline is already reaping the benefits of a global travel rebound.

“There are very strong business models out there (and) I object to the notion that there are carriers that never make any money and that I find extraordinarily hard to understand, especially in the case of Emirates,” Clark said.

The Emirates President said that business travel, which is expected to be the last aviation segment to return to pre-COVID, was doing well for the airline. “I am a great believer in the fact that corporate markets will return. In the last four or five months, the evidence of the corporate markets returning certainly to Emirates has been very strong”

“We're finding our premium cabins under greater pressure than our economy cabin,” Clark added.