Emirates

Emirates' Spanish expansion highlights Iberia's long-haul weakness to the east

Emirates' announcement to open a daily service to Barcelona and an additional daily flight to Madrid, after only entering the country in 2010, shows how Spain is unique for Emirates in being a major European market with no incumbent local competition since Iberia operates what it calls a "90 degree hub": its long-haul traffic, a successful operation, is almost entirely to the Americas, leaving Spain's demand for medium- and long-haul services east of Europe to be fulfilled by foreign carriers. Emirates does not target Iberia's Americas network from Spain but does focus on Africa, where Iberia has limited service, the Middle East, where Iberia only serves Cairo and Tel Aviv (the latter of which Emirates will not serve) and Asia-Pacific, where Iberia has no service to at all.

Intercontinental and regional carriers look to serve Zimbabwe in absence of national carrier

Zimbabwe’s indigenous aviation industry has been uncertain at best, underscored by Air Zimbabwe grounding its entire fleet last month. Even if the carrier resumes services, its future is not guaranteed. Instead Zimbabwe will have to rely on intercontinental and regional carriers. In the former category, Emirates will launch services in early Feb-2012, which will help maintain whatever trade links and international relations Zimbabwe has left. From regional African carriers, Air Namibia will resume service and Zambezi Airlines plans to increase its offering, which will help supplement the country’s regional needs. While total capacity in Zimbabwe has dropped since mid-2011, it is expected to increase this year but by May-2012 will still be down 11% from a year earlier.

MAS will achieve its targeted 12% capacity reduction by February, to the delight of Gulf carriers

Gulf carriers and AirAsia will likely emerge as the main beneficiaries of the network restructuring at Malaysia Airlines (MAS). The Malaysian flag carrier has selected several routes to discontinue by early next month, resulting in a 12% reduction in system-wide capacity as it begins implementing its new business plan.

Emirates' Ho Chi Minh service to impact Asian carriers, but provides Vietnam with much needed growth

Vietnam’s international market will get a long overdue shake-up later this year as Emirates finally launches services to Vietnam. Emirates’ decision to launch Dubai-Ho Chi Minh City service from Jun-2012 hardly comes as a surprise as Vietnam was the only major Asian country missing from the carrier’s fast-expanding route network. The rapid growth of Vietnam’s tourism and business sector combined with the current relative lack of long-haul capacity compared to other major ASEAN countries makes the Vietnamese market particularly appealing to Emirates.

Emirates will initially operate a daily flight between Dubai and Ho Chi Minh using 278-seat two-class A330-200s, resulting in 3892 weekly seats to and from Vietnam. This will immediately make Emirates the third largest carrier from outside Asia serving Vietnam. As a result, Emirates is poised to become one of the leading carriers in the Vietnam-Europe market, which is growing rapidly as Vietnam emerges as a major tourist destination.

In ordering more 787s, Etihad joins Emirates in securing medium-term growth

Etihad Airways' order for ten additional Boeing 787-9 Dreamliners will see the carrier join Emirates in guaranteeing medium-term growth. While some of the growth may be organic, a concern is further delays – or all together performance shortfalls – for the Airbus A350-1000, which both Emirates and Etihad ordered. The A350-1000 sits between the 787-9 and the 777-300ER, the latter of which Emirates ordered an additional 50 of last month. While the A350-1000 is due for delivery from late 2017, delays are highly expected. Etihad CEO James Hogan all but confirmed this when commenting on the additional 787 purchase, "We saw an opportunity to add further certainty to our growth profile in the mid to late part of the decade."