Emirates needs to double US capacity: Capa

Dubai-based carrier Emirates has to substantially increase US capacity in the medium-term if it wants to make the country as third largest source of revenue, according to an international think-tank study.

Emirates airline President Tim Clark said in an interview in September 2014 that it aims to make the US its third largest source of revenue.

Australian-headquartered think-tank Centre for Asia Pacific Aviation (Capa) said: “If we assume Emirates will broadly continue historical trends, it will need to increase US capacity by 50-100 per cent to make the US its third largest revenue source. This assumes no changes in the current regional breakdowns except for the splitting up of the current Americas category into the US and Canada/Latin America.”

In reply to an Emirates 24l7 query about expanding its fleet, the Dubai carrier said: “We won’t go into commercially sensitive details, however, we are committed to the US market.”

So far this financial year it launched Boston and Chicago, and have introduced the A380 to Dallas. Houston and San Francisco will also become A380 operations in December, Emirates said in a statement to this website.

In the first half of the 2014-15 fiscal year, Emirates net profit rose eight per cent to Dh1.9 billion ($514 million). It also expanded its global route network by launching services to four new destinations – Abuja, Chicago, Oslo and Brussels, the carrier said in its first-half results.

Emirates said the Americas, include Canada and Latin America, is already its third largest source of revenue. The Americas has grown in importance for Emirates, increasing from 8.7 per cent of all revenue in 2008 to 11.4 per cent in 2013.

By breaking the Americas category into the US (7 per cent) and Canada/Latin America (4.5 per cent), the third largest revenue source for Emirates becomes the Gulf and Middle East with 11.3 per cent, based on 2013 figures. The Gulf and Middle East is not significantly ahead of Emirates' fourth largest region, Middle East and Indian Subcontinent, comprising 11.2 per cent of revenue in 2013.

Capa said even doubling US capacity seems conservative.

“Much growth could be added by up-gauging existing services or adding frequency to current destinations. New destinations will be possible, some now and some in the future,” it added.

The Centre for Asia Pacific Aviation said the Gulf carriers along with Chinese carriers are bringing an influx of capacity to US, opening markets that previously did not exist or were difficult to conveniently reach.

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