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Emirates, Etihad see airline industry reaching pre-pandemic level in mid next year

Tim Clark said Covid-19 is probably the most disruptive force the industry faced since World War II and on top of that now there’s this war in Europe

The UAE’s full-fledged carriers Emirates and Etihad Airways see recovery in the aviation sector reaching to pre-pandemic level of 2019 in the middle of next year, thanks to the high load factor in a premium cabin and strong recovery in the corporate segment.

While speaking at a summit, Sir Tim Clark, president of Emirates airline, expects the industry to reach the 2019 level by the summer of 2023, delayed by the Russia-Ukraine military conflict.

Without the war in Europe, the recovery was possible by the end of this year, he added.

Tony Douglas, CEO of Etihad Airways, also sees the aviation industry reaching pre-pandemic in the middle to the end of next year.

“In terms of load factors, March 2022 was greater than March 2019. Our Q1 result this year will be the first time that Etihad will be profitable in its 18-year history and that’s because the yield in the ticket is still up there when the load factor has come back. So it was the first time we’d have a stellar first quarter in the history of the business,” Douglas said at the CAPA Airline Leader Summit 2022 held in Manchester, UK, on Thursday.

He said over the course of the last nine months, Etihad Airways’ premium cabin load factors have actually been higher as a percentage than they were pre-pandemic.

Tim Clark said Covid-19 is probably the most disruptive force the industry faced since World War II and on top of that now there’s this war in Europe.

“Global economy will emerge from this trauma and will get over it. I am a great believer in the fact that corporate markets will return. In the last four and five months, the evidence of the corporate market returning, certainly to Emirates, has been very strong. In fact, we’re finding our premium cabins under greater pressure than economy cabins,” Clark said during the panel discussion at the summit.

Emirates president rejected the notion that long haul international super hub will come under threat from small aircraft point-to-point.

He said the Emirates will see its third epoch where it will maximise the opportunity to grow its fleet to the levels that it had prior to Covid-19.

“Our biggest problem is the ability to get the aeroplanes into us at the pace that we need. So we’re going to have to retrofit the whole programme, spending $1.5 billion of our own cash to raise the product standards, expand the network and take us well beyond where we were prior to 2019.”

A380 challenge

Clark sees the CAGR of four per cent over the next 15 years as the world’s largest passenger aircraft Airbus 380 is dropping away.

“My biggest single problem will be the decline of the 380 because of the ability to meet the hub requirements in the 2030s when you’ve only got a limited number of slots at the primary hubs such as Sydney, Heathrow, Hong Kong and New York, etc,” Emirates president said, assuring that large aircraft will be of huge interest in the 2030s.

“I tried hard before and we actually gave up on the A380 with regard to Airbus to produce an aeroplane of that size, which could give us between 12 and 15 per cent reduction in operating costs simply through propulsion, aerodynamics, material, etc. But they didn’t buy it… In the future, we’re going to need that (big aircraft). The future for me is not a whole raft of single-aisle.”

Tony Douglas of Etihad Airways said the UAE’s national carrier largely has a strategy which is around a two-horse stable — 787 Dreamliner and Airbus A350 and these two aircraft are the winners because of the technology of the airframe, the power, the avionics, control systems, and the environmental performance.

“There is, of course, a vital place for next-generation narrow-body aircraft, and we’re more likely to operate them through our partnership with Air Arabia Abu Dhabi, in which we own 51 per cent,” he added.

— waheedabbas@khaleejtimes.com