Emirates: There's 'Temptation' to Add More U.S. Fifth-Freedom Routes
Emirates could be tempted to add more nonstop routes between the US and Europe, possibly expanding its roster of so-called "fifth-freedom" flights that have riled its US rivals.
Emirates' president Tim Clark made those comments while speaking this week at the 2019 Arabian Travel Market in Dubai, according to a Bloomberg News report.
In aviation industry vernacular, fifth-freedom routes are those an airline can fly between two foreign nations as long as the flight continues to its home country or began there.
Emirates currently flies two such routes between the US and Europe: daily Airbus A380 service between New York JFK and Milan and daily Boeing 777 service between Newark and Athens. Both flights include a leg to Dubai, but – like other operators of fifth-freedom routes – Emirates can sell tickets specifically on the nonstop US-Europe legs.
In his remarks at the Arabian Travel Market, Clark said both routes were performing well for the airline and that "the temptation is to do more," Bloomberg reported.
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Still, he acknowledged that such routes to the US are "under the microscope" following a contentious spat between the three biggest US carriers (American, Delta and United) and the three top Gulf carriers (Emirates, Etihad and Qatar Airways). The U.S. carriers have claimed that their Gulf rivals benefit from unfair subsidies, something those carriers have vigorously disputed.
The battle raged for years and only cooled in May 2018 with an apparent truce, following promises by the Gulf carriers to improve financial transparency and a vague suggestion that they would hold off on more fifth-freedom routes.
After a period of relative calm, there have been some new rumblings on the subject after Air Italy – 49 percent owned by Qatar Airways – added a raft of new routes between North America and Europe. Citing Qatar Airways' backing, the big three US airlines have called Air Italy's growth an effort to get around the vague pledge by the Gulf airlines to limit fifth-freedom flights.
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As for Clark, his discussion went beyond the fifth-freedom possibilities.
High on the list was the topic of the Airbus A380. The superjumbo jet has helped define Emirates' growth during the past two decades, but the airline now faces a future without the jet after Airbus decided that it will end production of the slow-selling plane.
The A380 likely will continue to fly for Emirates for years to come, but the carrier can no longer count on new models when it becomes time to phase out existing ones as they age.
Clark said a downturn in travel in the region had already forced the airline to begin "knocking down the network" during the past nine months, adjusting capacity in an effort to deal with the shrinking demand.
"We haven't been growing at the pace we used to because of geopolitical issues in the region and elsewhere," Clark said, according to Bloomberg. "But that's given us time to take stock of what the network is going to look like in 5 to 10 years, and what the fleet fit in that network and the type of aircraft is going to be."
While an A380-less future may prove to be a surmountable obstacle for the Gulf giant, it does represent a major shift.
It was just in 2017 that Clark said: "We need the A380s big time. It gives me huge flows across the hub to feed multiple city pairs. As soon as you start compressing that, your hub starts to implode, and that's a big problem for us (…) That's where the essence of our profitability remains."
Stay tuned …
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