4-Jul-2011 1:01 PM

Emirates to stimulate demand by cutting fares

Emirates President Tim Clark announced the carrier plans to stimulate demand by reducing prices to some destinations served with A380s, instead of raising fares to combat higher oil prices (Bloomberg, 01-Jul-2011). The carrier has no intention to reduce frequencies or cut routes. Capacity reduction has “sounded the death knell for so many carriers” according to Mr Clark. The carrier has no intention of scaling back its growth plans. Fuel costs account for 43% of Emirates’ expenses at present.

Emirates: “There is a wave of austerity in Europe from France and the UK to Ireland and Greece, and people are concerned about that. But what has changed in the last 20 years is that whereas travel used to be way down the list of priorities, people now rate it as the No. 1 thing they want to do. So we need to stimulate demand and get back to pricing levels that are affordable for the customers while still giving us a margin.” Tim Clark, President. Source: Bloomberg, 01-Jul-2011.