Posted by: pizzainmotion | April 8, 2013

Emirates Dipping Its Toe In The US-European Trans-Atlantic Market

Middle East carriers like Emirates, Etihad and Qatar think big.  That’s a rare trait in the airline industry, IMO.  Lufthansa has done a great job in Europe of building a massive network and lots of connections to places people want and need to go.

Emirates and other Gulf carriers have done the same for the Middle East and connect key places like New York, Los Angeles and San Francisco.  They placed the largest order of Airbus A380s in the world.  Their order for A380s is bigger than the next 5 carriers combinedand they already operate more A380s than the next two airlines combined.  Oh, and they decided to install showers on the A380 for their First Class passengers.

Carriers like Lufthansa and Air France are furious, thinking that Emirates gets hidden state subsidies to help them grow.  This has led to limitations on Emirates’ expansion in places like Germany and Canada.  But, the trans-Atlantic market is a lucrative one for a lot of airlines, and Emirates has decided it wants a piece of the pie that some of these airlines have had to themselves for a while.

Enter Milan.  Starting October 1st, Emirates will offer non-stop service between Milan and New York (JFK).  Emirates already operates between Dubai and Milan, and I assume it shouldn’t be too difficult to incent some passengers to connect through Milan if they have trouble filling the planes.  But, as the piece says, there’s not a lot of premium travel offered directly between New York (or the Northeast, for that matter) and Italy.  American has one direct option and their premium cabin trails Emirates by a wide margin.  Alitalia has a few JFK-Rome departures as well, again trailing Emirates by a wide margin in quality.  United has one daily flight out of Dulles to Rome, and US Airways has one out of Philly.

This isn’t a warning shot, IMO, because it was a matter of time before the Middle East carriers found a way into this picture.  Milan isn’t a huge hub but has enough connecting flights to move people around the country.  So, it’s not huge news yet.  But, I think it’s just a matter of time before you see more expansion like this.  The recently launched Emirates-Qantas alliance appears to be doing quite well and it wouldn’t surprise me to see Emirates find a partner in Europe to tango with.

HT: Tommy777

 


Responses

  1. Wasn’t qatar planning JFK-ATH on 787s?

    • Tom, they are. They had originally settled on the 787, but I think they had also considered an A380 for that route (though I think that’s too much capacity). I’ll do some digging to see if they have an alternate plan, since I think it was already supposed to have launched.

  2. EK already did HAM-JFK for a few years with 77W service, complete flop, they couldn’t get enough revenue and fill the flights with high end revenue, much less convince DXB pax to fly with a stop in Europe. It as discountinued when the A380 started nonstop JFK service,

    • Oliver, any idea why they chose HAM? It seems like an odd choice.

    • Oli, things have significantly changed the last few years and I think it’s safe to say that Hamburg was never optimal, but EK took a route they were allowed to fly. This move is not interesting just because of the Dubai service (even if Dubai had 57.7 pax in 2012), it’s interesting to see if the sand box carriers will start seriously attacking the European carriers on TATL.

  3. Delta, American and Alitalia already fly JFK-MXP. United flies EWR-MXP. Yes, Emirates is adding the only F cabin on the route and, yes, they are adding a lot more capacity, but this is hardly a route which was truly lacking in capacity or competition.

    And the part where they bailed on the HAM service 5 years ago makes me wonder why they think this is suddenly a better time to play the game. Sure, overall TATL capacity is down, but that particular market isn’t down all that much from where it was and both Delta and United can swap out 767 types to increase and decrease as needed.

    On the plus side, I’m looking forward to the fare wars.

    • Seth, I do think they’ll have trouble filling that many seats between Milan and JFK. I can’t say I know enough about why they bailed on HAM-JFK five years ago, but it is a much different time now. I suspect it will be easier to fill planes in Milan versus HAM. This just strikes me as something more built around where Emirates felt it could dip its toe in the water.

      I think I would have chosen elsewhere but I’m not sure what other options they had to consider.


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