I met Adnan Kazim, Emirates' Chief Commercial Officer at the sidelines of Arab Air Carriers Organization 56th AGM in Riyadh. We spoke about the latest airline performance, new aircraft orders, and the Middle East Conflict. Here is the Q&A interview transcript.
Can you give us an update on Emirates' operation and the load factor?
We have managed to recover almost 96% of the Emirates network. We got to 90% of capacity recovery and are now flying to 144 destinations. We have all our B777s today operating. We also managed to get 90 of the A380 back into operation.
We carried almost 14 million passengers during the month of June till August, which was quite a solid summer compared to last year, with almost 4 million more passengers carried. We have managed to exceed the 80% threshold in terms of the load factor, which was quite a healthy booking we managed to get and that trend has continued as far as the demand is concerned.
How has the recent Middle East conflict impacted Emirates?
Definitely, there is an element of the conflict going on around the Middle East which made a bit of an impact on certain markets but in terms of the overall impact is quite small and manageable. We haven't seen a major impact in overall performance or slowed down in the overall booking as such.
Emirates Chief Commercial Officer, Adnan Kazim
We're seeing Dubai is still popular. Many people are visiting Dubai. We're not seeing any slowdown. In fact, Dubai is going through growth in terms of overall booking, which is quite healthy.
We're maintaining our position as far as the capacity is concerned except for suspending our operation to Tel Aviv where we had three daily flights and have extended that till mid-November. Other than that, with a minor change in the overflying route, we have done to avoid the conflict area. Safety stands to be our highest priority in terms of managing the situation.
What are some of your top-performing routes at the moment?
London. Then we have the Indian market, which is again very solid, and our Australian routes as well.
Japan is becoming very popular for us and many routes in Europe, e.g. France is very popular.
Many routes in the United States today with traffic which is booming for example New York/JFK, LA, and San Francisco.
What percentage of the traffic is O&D and what percentage is connecting traffic through Dubai?
Pre-COVID Emirates was doing around 70/30, 70% with sixth freedom connections and point-to-point was around 30%.
During the pandemic, this percentage has changed almost gradually to 90% Dubai-based because many markets were closed. Today we're doing roughly around I would say 65% connecting and 35% traffic are from Dubai.
As we ramp up more capacity in the future and open more destinations beyond Dubai, that ratio will definitely come back to where we left at pre-covid, which is 70/30. But Dubai stands very solid. I think Dubai achieved 11.1 million tourists which is a reflection of what we're doing in terms of attracting more visitors to Dubai.
In terms of RPK/RPM or scheduled kilometers (ASK/ASM), are you exceeding pre-covid numbers?
We haven't yet reached the pre-COVID numbers. We are just tracking at 90% level even though we have been helped by a better mix and yield that we are generating.
So in terms of overall revenue, it's exceeding pre-covid but in terms of the capacity and where we stand on RPK, we are still lagging behind.
Emirates Chief Commercial Officer, Adnan Kazim
But I think we have managed to optimize what we have and with strong demand that came from all cabins including the premium economy, that definitely drove the revenue to very healthy levels.
Have you returned all the money borrowed from the government of Dubai that they injected into Emirates?
I mean it's a roadmap that we are working with the government over a period of time as we agreed earlier. But definitely, we're paying a lot of money back to many entities that today we engage with. We're coming back to a very healthy position from the cash flow as far as the company's concerned, as we declared in the last financial year, we're holding to 42.5 billion AED, which is very solid and way above the pre-COVID level.
With that sort of cash flow and healthy financials, it gives you room to pay back and to even invest in new technologies and products which is exactly what we're doing. We have retrofitting 120 aircraft with a lot of them will come with Premium Economy.
When are the B777s getting premium economy?
Next summer (2024), we will start retrofitting 53 Boeing 777-300/ERs. All will go through the premium economy retrofit. We are re-adjusting our business class in terms of the look and feel and even the configuration from the existing 2-3-2 to 1-2-1 configuration.
Emirates Chief Commercial Officer, Adnan Kazim
The existing 2-3-2 Business Class on B777 will go away and you'll see a new product that will be launched which will bring us the alignment to the product that we have with the upcoming 777-9X, with the A350 that is coming in. Everything will be streamlined in term of the product offering and consistent in term of what we do on the way forward.
When are you getting the A350 and 777-9X?
The A350 is expected to be received next year, which should be in August. Within a period of three and a half years, by mid-November 2027, we'll be able to complete the 50 A350s on order.
Emirates A350 will come in three class configurations; Business, Premium Economy, and Economy.
We expect to receive 777-9X in the last quarter of 2025 and we have 115 aircraft that have been lined up to be delivered between 2025 and early 2030s. So we have a total of 165 aircraft that are expected to be delivered between next year and 2031-32.
Emirates Chief Commercial Officer, Adnan Kazim
There are still about 20 A380s grounded in DWC. Will they gradually return to service?
They will be back. Our intention is to fly all our A380s and definitely, they will all come back.