June 2010 | Dubai-based Emirates has signed a deal to buy 32 additional A380 aircraft in an order with a list price of USD11.5 billion. This brings the airline’s total A380 order to 90 aircrafts, nearly 40 percent of worldwide orders for the superjumbo. Emirates president Tim Clark said that all 90 A380s will be operating at the same time in the future, as “The first A380 aircraft we ordered will be retired from the fleet in 2020, and the last of this order will be delivered in 2017.”
The central location of the Gulf Region on the world map lets aircraft access almost every destination non-stop, as 85 percent of the world’s population is located within a 8,500 km range from the Gulf. Governments in the region have been developing their carriers over the past decades to help diversify their economies and reduce dependence on oil revenues. The so-called ‘Gulf Gullivers’ are increasingly redirecting passenger flows from Europe, Asia and the Americas through their hubs, making them serious competitors for established airlines.
According to a recent report by investment bank UBS Middle East carriers now account for 8 percent of global traffic. This year, Middle East carriers will add 83 new aircraft to their fleets and 50 in 2011. Europe is expected to be the source of the majority of this new capacity. Dubai’s current airport, Dubai International, received 40.9 million passengers last year and is being expanded to accommodate 75 million by 2012. The emirate expects arrivals to reach 140 million a year by 2025. For an insightful article on the rise and rise of the Gulf Gullivers, please see this article from this week’s Economist: “Aviation in the Gulf: Rulers of the new Silk Road.“
Following delivery of their first A380 in July 2008, Emirates now operates 10 aircraft serving 8 destinations including London Heathrow, Toronto, Paris, Jeddah, Bangkok, Seoul, Sydney and Auckland. Beijing will be added to the list on August 1, followed by Manchester on September 1, and the return of the A380 on the New York route from October 1. Emirates says it is now the second largest airline in the world in available seat kilometres, and adds that in addition to the orders placed today, the carrier has 48 Airbus A380s, 70 Airbus A350s, 18 Boeing 777-300ERs and 7 Boeing air freighters on order totalling 143 wide-body aircraft worth more than USD48 billion.
Emirates’ latest A380 order underscores an industry recovery from the economic recession. Emirates expects to earn more than USD1bn in profit in 2010, surpassing its 2009 earnings, which were just short of USD1 billion. And IATA just announced the airline industry will post a USD2.5 billion profit in 2010, instead of its earlier estimate for a USD2.8 billion loss, as the economy rebounds.