CAPA Live: Emirates Sir Tim Clark: network carriers stronger
Emirates Airlines president Sir Tim Clark, speaking at CAPA Live October 2020, argued there will be a demand-driven bounce back sooner rather than later, and network airlines could come back stronger than in the past. Demand will return, so airlines need to maintain their physical product and use their marketing tools to keep brands in the minds of customers.
The lack of cohesive government response is not helpful. By having metrics that are almost unachievable means that governments are continuing to do their own thing.
There is huge demand for cargo, with opening of 70-80 routes being driven by the need for cargo space, which is helping to reduce cash depletion significantly.
- Demand-driven bounce back expected in the airline industry, with network airlines potentially coming back stronger than before.
- Lack of cohesive government response hampers recovery efforts and creates uncertainty for airlines.
- Significant demand for cargo drives the opening of new routes, helping to reduce cash depletion for airlines.
- Emirates Airlines president believes the pandemic is a temporary setback and expects a robust return of demand.
- Governments are likely to implement additional restrictions and lockdowns, prioritizing public health over airline operations.
- Environmental pressures on the industry remain strong, and airlines need to continue adopting more efficient and environmentally friendly practices.
Emirates Airlines president Sir Tim Clark, speaking at CAPA Live October 2020, which took place on 14-Oct-2020, stated that the role of the network airline "could be stronger than in the past" when travel demand returns; he knows how the markets responded to Emirates as it built its sixth freedom network model through its Dubai hub.
Sir Tim said that you "have to assume you will recapture the growth curve prior to the pandemic", and he believes there will be a demand-driven bounce-back that will return "sooner rather than later" - although whether airlines are in "good enough shape to respond to that" is another question.
"...pandemic is a glitch"
Sir Tim Clark, Emirates Airline President, at CAPA Live, 14-Oct-2020
Sir Tim commented that the "...pandemic is a glitch. We've had many of those in the past - perhaps not as significant and severe as this for our industry - but nevertheless, it's a glitch and we will come through it and pick up again".
Speaking about the current suppressed demand, Sir Tim said he "is not one of these people who believes in what they call the new norm", and he believes demand will return in "a very robust manner".
Sir Tim said this is particularly so because demand has been "so suppressed in the past 10 months", and he expects demand will remain suppressed for at least the next six to nine months. When demand does return, airlines "need to ensure that we are a known entity" by maintaining physical products and by continued use of their marketing tools to keep their brands in the minds of customers.
Sir Tim added that the airline's reopening of the lounge and bar area on the upper deck of its A380s will be conducted under its inflight protocols with regards to social distancing "and everything else", although there won't be a "return to the halcyon" days of multiple people occupying the space.
Lack of government cooperation
Sir Tim stated that he was not optimistic about "attempts at cohesion" on coronavirus responses at a government level, and doctrines of laissez faire "seems to be driving the governments and the actions they have taken".
Sir Tim highlighted the recent EU 'traffic light' common map for coronavirus-related travel restrictions as "driven by metrics that are almost unachievable", and by making them unachievable, governments "will continue to do their own thing" as there are differing forces in play.
He said he believes that additional restrictions and lockdowns will be implemented by governments, and "things are going to get worse before it gets better" and airlines have to accept that governments are going to put public health first.
Opening of routes primarily drive by cargo
Sir Tim Clark stated that demand for cargo is "huge" due to the availability of bellyhold capacity, and the routes the airline is opening are "driven primarily by cargo". He said that cargo continues to be strong, and has allowed the airline to open between 70 and 80 destinations "primarily driven by cargo demand".
Cargo revenue has been "substantial" and allows the airline to "not only cover our operating costs", but to make a profit. Passengers on those aircraft that have been partially converted to cargo operations are also making "very substantial contributions", which is "significantly reducing the cash depletion that all our businesses face".
Environmental pressure not weakened by pandemic
Sir Tim stated that he does not expect environmental pressures on the industry to be weakened by the coronavirus pandemic, and the pandemic has caused an acceleration in the transition towards more environmentally friendly alternatives. T
he airline industry "needs to do better" at making sure it is recognised for its environmental efforts, and that it will "continue to do our best" in terms of adopting new and more efficient aircraft technology.
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