2 Concourse A opens in Dubai
3 UK aviation infrastructure – lining up the arguments
City pairs and global connectivity
4 Berlin Brandenburg – still waiting
5 Sky-high ambition for China’s airports
6 Whose level playing field?
ICAN comes of age
7 Stopping the clock on the EU ETS
8 They said it best
9 New Silk Road: China, Brazil and the “New Global South”
10 Sector insight from a European perspective
12 Emirates Foundation in Uganda
Fast Facts
OpenSkyThe public affairs journal of Emirates
Issue 15 | February 2013
Airports and connectivity is the theme of
our latest Open Sky. Often outshone by their
airline customers, airports are the essential
building blocks to global aviation and a key
catalyst to economic growth. They have the
power to reshape global traffic flows and
create new trade and tourism connections
beween disparate regions.
Our focus on airports is prompted by the
recent opening of Concourse A at Dubai
International, the culmination of four years
of construction, or 160 million man-hours,
and $3.5 billion worth of investment.
Despite their overwhelming local and
national economic value, adding new airport
infrastructure is often fraught with complexity,
as this edition of Open Sky illustrates.
In the UK, a contentious ongoing debate
on aviation infrastructure policy may not
see another airport built for the South East
until the 2030s. In Germany, 17 years after
Berlin Brandenburg airport received federal
approval, costs are spiralling following
a fourth construction delay, to the ire of
German and foreign airlines alike.
In China, meanwhile, the Government has
pegged aviation as a major growth facilitator
and plans to build 82 new airports by 2016,
in an ambitious plan to spur economic
growth in metropolitan and regional areas.
No issue of Open Sky would be complete
without commentary from industry experts,
and in this edition we interview Olivier
Jankovec of Airports Council International
Europe. We also feature the EU’s “stopping
the clock” decision on ETS, and the success
of ICAN on its fifth anniversary. Finally, we
discuss the “New Global South” comprising
China and its trading partners in the
developing world, and the implications for
global aviation.
Welcome: the airports issue
In January, Dubai International Airport opened its new
Concourse A after a four-year construction period,
increasing capacity by 15 million passengers a year.
The new facility, which is 11 stories tall and
contains 20 aircraft stands, is home for
Airbus A380 flights into Dubai and expands
the handling capacity of Dubai International
from 60 million to 75 million passengers
per year. Currently, Emirates Airline is
operating its A380s into the terminal, while
Qantas will operate their superjumbos into
Concourse A on April 1. Meanwhile, Dubai
International’s existing facilities continue to
be used to great extent by roughly 150 other
airlines from around the world.
Built at a cost of $3.5 billion, the facility
is part of a larger development plan for
Dubai International, including opening a
fourth concourse in 2015. Increasingly,
infrastructure at the airport will be financed
using retail sales as collateral after Dubai
Duty Free last year raised $1.7 billion from
26 regional and international banks to
support funding requirements for its own
growth and that of the airport.
Concourse A opens in Dubai as home for the Airbus A380
Airport infrastructure in Dubai
Contrary to claims of massive overcapacity, infrastructure at Dubai International
is built in a pragmatic and structured way, in order to stay ahead of traffic growth.
Concourse A has been opened just as passenger volumes at Dubai International were
expected to exceed the operational capacity of the airport this year.
A second airport in the emirate – Al Maktoum International, in the Dubai World
Central development – is often billed incorrectly as the world’s largest airport.
It currently features just a single runway and small-scale cargo and passenger
facilities. Only as traffic volumes outstrip capacity at Dubai International sometime
in the next decade is Dubai World Central expected to be developed into the main
airport for Dubai.
Airlines operating to Dubai
Dubai International – capacity developed in line with traffic growth
Countries
Top passenger markets at Dubai International in 2012
Visitors (1,000s)
Visitors (1,000s)
Cities
Source: Dubai Airports
Source: Dubai Airports, 2012 summer schedule
Source: Dubai Airports
2
Many argue the UK faces an urgent need for new airport
capacity, especially at London Heathrow, with prospects
hinging on political cooperation and consensus-building.
The latest round of policy making has
seen the government set up an airports
commission to consider how the country can
maintain its hub status. The timing of this
move has been criticised as it will not report
until mid-2015, after the next general election.
Earlier, hopes for a way forward to promote UK
economic competitiveness focused on plans
for a third runway at Heathrow, announced in
2003 and projected to be completed within 12
years. Five years later, however, the plans were
scrapped by a new incoming government
due to environmental objections.
The debate in the UK comes at a time when
the country’s growth rate and ability to
trade are being constrained by declining
competiveness as an air hub, due to
capacity issues and high aviation taxes.
The difficulty for the airline industry is that
there are fears it may not be until the 2030s
when new runways or terminals may be
operational, considering any commission
recommendations will undergo a lengthy
planning approval and construction process.
Terminal 5 at Heathrow, for example, took
27 years from concept to inauguration.
Separately, Parliament’s Transport Select
Committee is conducting an inquiry into UK
aviation policy, and has received testimony
arguing for different outcomes. London
Heathrow CEO Colin Matthews lobbied for
a “One Hub or None” plan to expand his
hub as a cost effective solution. Meanwhile,
some regional airports, led by Birmingham,
believe the debate is too focused on the
South East and warned the Government not
to “put all its eggs in one basket”.
UK aviation infrastructure – lining up the arguments
The world’s biggest international air hubs – London Heathrow, Paris Charles de Gaulle,
Dubai International, Hong Kong and Amsterdam Schiphol – are seeing competition
intensify between them as globalisation shrinks markets.
As a result, these hubs are increasingly seeking new markets to boost growth. As the
above map shows, they are forging bonds with cities in far-flung locales. The largest
gaining city pairs among the world’s top airports can sometimes be attributed to recent
geopolitical events, such as political change or economic reforms in a particular country.
In other cases, the growth is the result of new airline connections opening up previously
untapped markets.
Casablanca
Paris
Moscow
Abuja
Annaba
Zanzibar
Vishakhapatnam Yangon
St. Petersburg
Osaka
Sapporo
London HeathrowLondon Gatwick
Tripoli Sharm El Sheikh
DubaiRas al Khaimah
Baghdad
Medina
Tunis
Amsterdam
Abidjan
Sydney
Dublin
ChengduFrom Hong Kong
From Hong Kong
Dallas/Fort Worth
Caracas
Oujda
Chicago To Chicago
To Caracas
City pairs and global connectivityGrowth in annual
passenger bookings
London HeathrowYangon 114%
Sharm El Sheikh 99%
Tripoli 96%
Ras al Khaimah 73%
Baghdad 64%
Paris Charles de Gaulle Zanzibar 61%
Abidjan 59%
Chengdu 57%
Sapporo 45%
Annaba 43%
Dubai International Vishakhapatnam 135%
Dublin 88%
Abuja 65%
Dallas/Fort Worth 57%
Medina 51%
Hong Kong InternationalLondon Gatwick 99%
St. Petersburg 67%
Caracas 38%
Chicago 32%
Moscow 24%
Amsterdam Schiphol Tunis 72%
Oujda 44%
Osaka 34%
Casablanca 23%
Sydney 20%
Where are the world’s biggest international airports growing?
Source: MIDT data for 12 months ending Nov’12 vs previous year, travel between city pairs with at least 10 passengers per day, per direction
3
Building a new airport can span decades. Berlin
Brandenburg Willy Brandt Airport (BER) received federal
go-ahead in 1996.
However, the project then spent the next
10 years as a blueprint as the city of Berlin,
the surrounding state of Brandenburg and
the federal government resolved differences
amongst themselves and with stakeholders.
The airport was originally slated to open
in October 2011, but prior to opening new
dates were announced and revised. Just
a few weeks before its scheduled opening
in June 2012, technical problems with the
fire protection systems forced yet another
delay. Speculation was rife that the October
2013 deadline would not be met; this was
confirmed in early January, with a new date
not being set.
The new airport is of vital importance to the
German capital as it looks to replace the
existing outdated and overcrowded Tegel
and Schönefeld airports. More importantly,
Berlin and the State of Brandenburg hope to
reap the economic benefits of a centralized
and improved aviation infrastructure:
better connectivity, an increase in incoming
tourists and job creation.
Government forecasts suggest the new
airport could generate 40,000 new jobs.
Unfortunately for the Berlin economy, the
delays have resulted in numerous missed
opportunities and additional costs.
Even before the latest delay, total
construction costs had more than doubled
from early estimates, to €4.3 billion.
These estimates do not include expected
compensation claims by the airport’s
adversely impacted retailers and airlines.
This includes Air Berlin, which plans to use
the airport as its hub and has filed a lawsuit
seeking damages.
The additional costs were covered by the
airport’s public owners, and so ultimately
it is the German taxpayer who will have to
pay for the delays. Meanwhile, the expected
benefits of this public expenditure –
increased long-haul connectivity – will
have to wait.
Berlin Brandenburg – still waiting
Berlin Brandenburg ownership
FederalGovernment
26%
State ofBrandenburg
37%
City of Berlin 37%
Illustration by Björn Rolle/Flughafen Berlin Brandenburg
2006After 10 years of administrative
struggle, federal courts issue approval,
construction begins
May 2012Opening
date revised to
March 2013
Jan 2013BER will not open October 2013 as
announced, new date unknown
June 2010Airport announces
opening will be delayed by 8 months,
from October 2011 to June 2012
1996BER plans
receive government
approval
Sep 2012Airport opening
delayed to October 2013
Waiting for takeoff
4
Nowhere in the world is aviation as ambitious as in
China, which is planning huge airport investments
outlined in its latest Five-Year Plan.
The Civil Aviation Administration of China
(CAAC) is targeting 82 new airports by
2016, and the renovation and expansion
of a further 110 existing airports. CAAC
Minister Li Jiaxiang has championed the
plan to bring 80% of China’s population
within 100km of an airport within a decade.
While the project’s full costs are unknown,
the government has stated that over the
same timeframe it would invest 1.5 trillion
yuan ($240 billion) into the aviation sector,
spread across state enterprise, local
governments, airports and the CAAC.
Most new airports slated for construction
are designed to serve fewer than 500,000
passengers annually, and will be used to
further develop China’s long-term hub and
feeder strategy. The flow of passengers
will be directed towards designated hubs
for domestic and international transfers
currently dominated by Air China, China
Eastern and China Southern.
Each of the large Chinese network carriers
have established secondary hubs in
developing inland cities – Air China in
Chengdu, China Southern in Urumqi and
Dalian, and China Eastern in Kunming and
Xi’an. These secondary hubs are designed
to boost efficiency, serving as domestic
aggregators to draw passengers from
developing but populous catch basins and
depositing them in other regional points, or
towards the coastal hubs.
Increasingly, these secondary cities are also
courting international flights. Chengdu,
Chongqing and Xi’an are scaling up their
investments to turn themselves into hubs
for international traffic with new terminals,
transfer services, and incentives for airlines
planning to launch new services. This year
for example, British Airways will launch
flights to Chengdu, while Finnair is planning
to open services to Xi’an, having already
inaugurated services to Chongqing.
One of the new aiports under construction,
Beijing Daxing International, is slated
to become the world’s largest airport.
Its development has generated intense
discussion internally, as the Chinese
Government decides which airlines and
flights will be permitted to operate at the
airport, and whether authorities will split
the various Beijing airports between major
Chinese carriers and their alliances.
Chinese airports are also venturing
abroad to learn best practices and share
experiences. Last year, five separate Chinese
airport delegations visited Dubai to meet
with officials from the airport and Emirates.
Sky-high ambition for China’s airports
Yudongbei
Jiuhuashan
WudalianchiJiagedaqi
Linfen
Yueyang
LiupanshuiBijie
Cangyuan
Luguhu
Daocheng
Naqu
Delingha
Bayanzhuoer
ShuozhouZhangye
Wushan
GuoluoLongnan
Xiahe
Hongyuan
Pingdingshan
WulongYichun
Fuyuan
Jiansanjiang
Suifenhe
Songyuan
Tonghua
Xingtai
Yingkou
Suzhong
Rizhao
ZhalantunHuolinhe
Baicheng
Chengde
Beijing (Daxing)
Shangqiu
WuhuJiaxing
Xinyang
Lishui
ShaoguanSanming
Putian
Shangrao
Huizhou
HengyangWugang
HuangpingHechi
Qionghai
Lancang
Honghe
ZunyiLeshan
WutaishanJinchang
ShiyanShennongjia
Shache
Shihezi
Fuyun
WulanchabuA'ershan
Zhangjiakou
FuguLvliang
Zhanzhou
Note: Map details all announced airport projects (70 of 82 planned)
China’s new airports 2013 – 2016
90.0Millions
80.0
70.0
60.0
50.0
40.0
30.0
20.0
10.0
0.0 5.0 10.0 15.0 20.0 25.0
% Passenger Growth (2011)
+25%
Guangzhou
HangzhouNanjing
Wenzhou
Zhengzhou
Haikou GuiyangShenyang
ShijiazhuangHarbin
Kunming
Dalian
FuzhouNingbo
Xian
Guilin
Shanghai Pudong
Shanghai HongqiaoShenzhen Chengdu
Beijing
Chinese airports – passenger traffic and year-on-year growth
Source: CAPA
5
One of the most repeated bits of jargon used in Europe
is “level playing field”, often used fondly in forums and
governments, corporates and interest groups alike.
It is typically an attempt to place oneself
in an international context. Some Europe-
based members of the Star Alliance
regularly use the concept in combination
with allegations of subsidies that some
efficient and often profitable competitors are
said to receive on a recurring basis.
Its use in Europe is particularly noteworthy
in conjunction with the amount of
interventionist support measures European
governments have implemented, or are
planning to implement in the near future.
Brussels Airlines, for example, has
convinced the Belgian Government that they
and other Belgian carriers are faced with
“unfair competition” and therefore need an
annual €20 million relief package to help
ease social costs levied on them until 2020.
Poland’s government said in December that
it is considering a bailout for LOT after the
airline requested more than 400 million
zlotys (€96 million) in aid.
Meanwhile, the EU is also investigating
four capital injections into Slovenia’s
Adria Airways between 2007 and 2011
amounting to €85.5 million, to decide if the
injections conferred unfair advantages over
competitors. It remains to be seen whether
this support will pass the scrutiny tests of
the EU’s competition watchdog.
Nevertheless the revival of state
intervention calls into question the
scaremongering by those carriers
concerning alleged subsidies and “anti-
competitive behaviour” in the international
sphere, in the name of “levelling the playing
field”. While European governments are
likely to remain ready to intervene in their
industries of national importance, the
debate should therefore also move from
being conceptual to fact-based and apply to
all industry participants.
In early December, Saudi Arabia hosted the fifth ICAO
Air Services Negotiation Conference (ICAN 2012) in
Jeddah, drawing over 350 delegates from 62 countries.
Known as speed-dating for countries seeking to add new air services agreements or
strengthen existing ones, the gathering saw impressive results: participants held
hundreds of separate bilateral meetings, yielding 130 new agreements. ICAO heralded ICAN
2012 for “providing the basis for expanding market access and route connectivity.”
International air traffic is scheduled to double over the next two decades from the current
2.7 billion passengers a year to some 6 billion. This rate of growth is dependent, however,
on a corresponding increase in new air services agreements between states.
The first ICAN in 2008 was hosted in Dubai amidst doubts that a speed-dating format
– meetings scheduled in one, two and three-hour blocs – was workable for air services
negotiations. That first gathering was attended by just 27 countries, yielding 20 completed
agreements. The success of ICAN 2012 in Jeddah demonstrates that the conference has
come of age as the world’s primary venue for advancing aviation liberalisation.
Whose level playing field?
ICAN Comes of Age
Recent proposed state aid in Europe
Belgium – €160 millionto 2020 for Belgian carriers
Poland – 400 million zlotys(€96 million) for LOT
Slovenia – €85.5 millionfor Adria Airways
What the playing field looks like for airlines
6
In November EU Climate Commissioner Connie
Hedegaard announced plans to “stop the clock”
regarding the EU Emissions Trading Scheme.
The pause, which will be implemented
for a period of one year, was in response
to recent progress on the issue by ICAO,
which was delegated by the UN to deal with
reducing greenhouse gas emissions related
to aviation. Ms Hedegaard went on to say
that the announcement was intended to
create “a positive atmosphere” for further
negotiations at ICAO. It was probably no
coincidence that the news came one day
before the US Congress passed the ‘EU
ETS Prohibition Act’, signed into law by
President Obama two weeks later.
The EU’s emissions scheme is one of
several environmental charges faced by
airlines worldwide, requiring significant
resources and staff hours to be devoted
to compliance. Time-consuming efforts to
comply with the ETS apply to an estimated
10,000 aircraft operators of all types that
fly to, from and within the EU member
states. In addition to the ETS, international
airlines also encounter environmental taxes
in Germany, Austria, the UK (Air Passenger
Duty) and Australia (Passenger Movement
Charge), to name a few.
Instead of applying the moratorium to all
EU flights, the Commission applied it to
international flights between non-EU points
and EU points. CO2 emissions from all ‘intra-
EU’ flights (those to and from points within
the 27 EU Member States, and several other
states cooperating with the scheme) still
have to be accounted for in 2012.
With the pause yet to be ratified by the
European Parliament, it was still unclear at
the time of going to press whether operators
affected by the EU ETS will have to report
and account for emissions from all EU
flights (as usual), or for ‘intra-EU’ flights
only (as per the postponement proposal).
It is unlikely that operators will know the
answer to this question prior to submitting
their verified 2012 emissions reports before
the March 31 deadline.
Emirates cautiously welcomes the EU
moratorium announcement, but believes a
more equitable outcome would have been
for the postponement to apply to all flights.
Emirates operated a small number of ‘intra-
EU’ passenger and cargo flights in 2012
that will be covered by the paused ETS, and
will therefore still need to submit verified
emissions monitoring reports for 2012 and
the associated number of allowances to
offset those emissions.
Just as before the announcement, Emirates
will comply under protest with the extra-
territorial, unilateral application of the
EU ETS, with parallel concerns about the
destination of monies raised. At the same
time, Emirates continues to believe a global
solution to deal with international aviation
emissions, designed and administered by
ICAO, is the best approach.
The EU stops the clock on ETS, but questions remain
Reactions to the ETS pause“The Commission’s pragmatic decision
clearly recognizes the progress that has
been made towards a global solution for
managing aviation’s carbon emissions.” –
Tony Tyler, Director General and CEO, IATA
“While I am pleased the EU has temporarily
suspended its efforts to unilaterally
impose a tax on our airlines flying over
US and international airspace, the EU’s
announcement does not rule out future
efforts to tax foreign carriers.” – John
Thune, US Senator and sponsor of ‘EU ETS
Prohibition Act’ of 2012
“Any part suspension of the EU ETS must
not result in different rules applying to
different airlines dependent on the routes
they operate.” – Simon Buck, CEO, British
Air Transport Association
“The positive cooperation between ICAO
and the European Commission provides
the international community with a real
chance to make progress on a worldwide
agreement on aviation CO2 emissions,
and to prepare a sustainable future for
international aviation.” – Fabrice Brégier,
CEO, Airbus
7
“Competition makes companies better” –
Richard Anderson, CEO, Delta Air Lines
“What is needed in the aviation industry
is a levelling of the playing field, allowing
airlines to compete without market-
distorting regulations, for example allowing
fifth freedom or seventh freedom rights …
This levelling of the playing field is what
would really benefit passengers, offering
them more choices and lower prices on
routes currently dominated by a handful of
competitors, not the moving of an airline
stake from one owner to another. It would
also ensure that the most efficient airlines
with the best service levels survive, not the
ones that limp along for years and years.”
– Prof. Loizos Heracleous, Warwick
Business School
“Instead of getting the visitors into the
country and taxing them when they’re here,
you guys are standing by the runway like
latter-day highway robbers.” – Michael
O’Leary, CEO, Ryanair, on the UK Air
Passenger Duty
“If you coddle companies at home
by allowing them to exploit Canadian
consumers in order to be big on the world
stage, you have done your own people a
disservice ... If that’s the way that a deal
comes in, wrapping itself in the flag, I’m
skeptical about the real efficiencies that are
pushing the deal.” – Melanie Aitken, former
head of Canada’s Competition Bureau
“State aid is a fact of life. It happens...
but it has to be tied to performance targets
and it has to be used to restructure an
airline. If an airline is losing money and its
owners, whether private shareholders or
Governments, get more capital into it that is
simply spent in subsidising operating losses,
then you have not solved the problem. And
sooner or later it will have to come back for
more. Meanwhile, other competitors have to
deal with a company that is not charging an
economic rate because its costs are higher
than its revenues. And that is a problem
whether it is a state or private-owned
airline.”– Tony Tyler, Director General
and CEO, IATA
“In 2004 we belonged to the first carriers
who warned about the growing competition
from the Gulf carriers. But let’s be
pragmatic. If you can’t beat them, join them.
Regarding the routes to Northern or Southern
America I don’t expect serious competition
from the Gulf carriers. For Europeans the
detour via Abu Dhabi would be too long. The
same applies for services to Northern Asia.”
– Alexandre de Juniac, CEO, Air France
“It is not the strong state-support for Gulf
airlines like Emirates from Dubai that is the
problem for German airlines but the missing
political support in one’s own homeland.
For the most part this is their own fault; in
recent years airline managers showed too
much arrogance in Bonn and later in Berlin.
And it is about the missing political support
in one’s own house. The restructuring of
Lufthansa, for example, proceeds way too
slowly. Too many employees and executive
managers do not want to realize these new
realities.” – Handelsblatt, Düsseldorf
based newspaper
“There is strong evidence to suggest that
the imposition of the highest taxes on flying
in the world costs the UK economy over
90,000 jobs and over £4bn in lost business
in 2012 alone. With the air passenger
duty raising £2.6bn last year, we believe
the Treasury is failing to exercise proper
diligence in its management of the taxation
system – effectively killing the goose that
lays the golden egg.” – Simon Buck, CEO of
the British Air Transport Association
“Yes to more technology, yes to greater
opportunity, and yes please to removing
barriers to growth.” – Maria Miller, MP, UK
Secretary of State for Culture, Media and Sport
“John Segaert (senior director of Air
Canada’s System Operations Control)
looks at a Toronto-Frankfurt flight with 340
passengers, and discovers 282 passengers
are making connections to cities in Europe,
the Middle East and India. ‘That’s a flight
you don’t want to be late,’ he said.” –
Toronto Star, revealing that in December
2012 transfer traffic made up 83% of
Air Canada’s Toronto-Frankfurt flights
They said it best...
Open Sky brings you the best quotes on liberalisation,
alliances, aeropolitical protection, free and fair trade,
economic policy and global business.
Fred Hochberg
President and
Chairman,
US Export-Import Bank
“In terms of jobs supported by our
financing, we went from 115,000 in
2008 to 255,000 last year. Added up,
we supported 950,000 export-related
jobs over the past four years – nearly
one million jobs. We did all this at no
cost to the taxpayers. What we earn
from our customers pays all operating
costs of the Ex-Im Bank – and what’s
left over goes to the US Treasury. Just
last month, after closing the books on
our fiscal year 2012, we sent $803
million back to the Treasury – our
CFO did it with one keystroke – on
top of the $1.9bn we sent back in
the previous five years.”
8
Slowly but surely, China is on its way to supplanting the
US as the largest trade partner to many Central and
South American nations.
Already the top trading partner of Brazil
and Chile, two of the strongest economies
in Latin America, China is fast developing
major trade relationships with countries
such as Argentina, Uruguay, Cuba,
Venezuela, Peru, Ecuador, Colombia and
Costa Rica.
Driven by Chinese demand for resources
and Latin America’s increasing appetite
for Chinese consumer goods, this trade
relationship has risen over the past decade.
In 2000 trade between China and Latin
America topped $10 billion, and has since
grown exponentially, reaching $250 billion
in 2012. Two-way trade is expected to grow
another 60% by 2016, to $400 billion,
which will make it one of the most
important trade relationships in the world.
Over the same time period, one in four new
air travellers for the global aviation market
will be Chinese, signalling strong potential
for passenger travel between the two
regions as well.
China and Latin America are part of the
“New Global South”, a term which describes
emerging trade relationships between
developing economies, most of which lie at
or below the equator. As China diversifies its
economy away from traditional dependence
on the US and Europe, it will increasingly
promote ties with its southern partners such
as Latin America, Africa and India.
Emirates has served the Latin America-
China trade relationship since 2007,
when it began operations to São Paulo,
having earlier launched operations to Hong
Kong and mainland China. More recently,
Emirates has begun passenger flights to Rio
de Janeiro and Buenos Aires, and dedicated
cargo operations to Viracopos, Brazil.
Brazilian goods carried on Emirates
SkyCargo include metal, ores, minerals,
plastics, chemicals and foodstuffs.
Meanwhile, Chinese goods carried on Emirates
flights to Brazil and Argentina include
textiles, apparel, silk, leather goods, footwear,
jewellery, handicrafts, precious stones, and
automotive parts. In December, SkyCargo
extended its Viracopos service with seasonal
flights to Santiago, Chile, carrying cherries
and other fresh berries to Dubai and onwards
to China and other Asian destinations.
New Silk Road: China, Brazil and the “New Global South”
Beijing
Shanghai
Dubai Hong KongGuangzhou
São PauloRio de Janeiro
Buenos Aires
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Emirates serves the trading partners of the “New Global South”
9
What are the main political and operational
challenges that European airports are
facing this year?
The main challenge for Europe’s airports
this year will be the continued impact of the
European sovereign debt crisis and the fact
that economic growth remains sluggish in
many countries.
This hit demand for air transport for most
of 2012, with freight traffic in recession
for almost 18 consecutive months and
passenger traffic coming to a standstill
as of October. As capital intensive and
predominantly fixed cost businesses,
airports depend on traffic growth for their
economic sustainability.
The European economy is unlikely to start
recovering before the second half of 2013
at best, and this is not good news for us.
This means traffic will remain depressed at
many airports in the coming months, with
most European airlines unlikely to add more
capacity in the market, not to mention the
risk of some going bust.
At the moment, about 48% of Europe’s
airports are loss-making and beyond the
impact on traffic and revenues, the sovereign
debt crisis is also causing a surge in our
capital costs, increasing difficulties in
accessing capital markets and retreating
public financing in airports.
All this means our members are focusing
on boosting their competitive positions
to incentivise traffic growth as much as
possible and on improving both their
economic and operational performance.
The main political challenge is to get
European policy makers to come to terms
with the fact that aviation is a key strategic
sector for the economy, especially as our
continent increasingly becomes dependent
on trade with new economic powerhouses in
Asia and Latin America.
We need the EU and national governments
to support the competitiveness of European
aviation, and not to hinder it as is still too
often the case.
Just look at the damaging aviation taxes that
exist in the UK, Germany, Austria and France
or the increasing difficulties to develop
airport infrastructure and secure our license
to grow in too many parts of Europe, or the
disproportionate costs of EU passenger
rights legislation. We still need a European
industrial policy for aviation.
Over the past five years, what have
European airports done right, and what
could they have done better?
The last five years have been quite bumpy.
We have gone from record traffic levels in
2007/2008 to a record slump in 2009,
losing 100 million passengers in just one
year, followed by a very dynamic recovery
in 2010 before seeing traffic taking a
sliding path again last year. In that context,
European airports have done a lot of work to
build more resilience in their business.
This has been done in different ways.
Firstly by incentivising traffic as much as
they could, in particular through significant
decreases or freezes in airport charges
where possible. Secondly, by further
developing alternative revenue sources,
especially in the areas of retail, food and
beverage, advertising and real estate.
Lastly, by cutting costs and reviewing
operational processes.
Where we still need to do a better job is on
improving service quality for the passenger.
Significant efforts are being made in that
area, from increasing capital expenditure
on quality aspects to embracing digital
technology and better communicating
with passengers.
With the smartphone revolution, many new
opportunities are appearing. For service
quality, we need a concerted effort and an
aligned vision from all operational partners
that use our infrastructure such as airlines,
ground handlers, customs and ground
transportation companies.
Sector Insight
Olivier Jankovec has headed the European region of the
airport organisation since 2006. We asked him about
emerging challenges facing European aviation.
Olivier Jankovec
Director General
at Airports Council
International Europe
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What will come out of the European
Commission’s work to strengthen its
position in the external relations sphere?
Can airports play a bigger role here?
At this point in time, much depends on
whether the EU Member States will be
supportive of the Commission’s new policy
proposals and whether they are ready to
abandon the old bilateral system and move
towards more open aviation agreements
negotiated at the EU level.
The Commission’s appeasing move in
relation to the EU Emissions Trading
Scheme and the prospect of a global
solution on aviation and climate change
should hopefully lead other States to
accept that concept. Historically, airports
have generally been kept out of the loop
regarding aviation negotiations. Yet, traffic
rights and aviation liberalisation directly
impact our revenues and development
capabilities. It also directly affects the
local economy.
We need to play a bigger role in these
issues, not just to represent our own
businesses but also the interest of our
communities, which have often tended to
be overlooked, if not ignored entirely. This
is precisely what ACI Europe advocates
and this is why we closely follow all EU
led aviation negotiations. Beyond our
members’ interests, we see further aviation
liberalisation at EU level as a prerequisite to
ensuring Europe’s global relevance.
European airports were among the first
globally to act as transfer hubs, but other
regions have now caught up, and in the
future we will see significant airport
developments in China and the Gulf, for
example. What will European airport hubs
look like in 2025?
I think it is fair to recognise that Europe’s
airports invented the hub model. In the
face of increasing global competition, in
particular from now prominent airports
in the Gulf, it is quite clear we need to
up our game. This means reinventing the
passenger experience, continuing to develop
intermodality and non-aviation activities, as
well as building a genuine airport brand.
This also means coming up with new
services and reviewing cooperation models
with airlines. There appears to be significant
potential for airports in facilitating or even
offering connectivity between flights of
airlines which do not belong to the same
alliances or even do not offer any interline
enabled services – like low cost airlines.
This could open new perspectives for
hubbing capabilities.
Airport financing can be a contentious
issue. While some airports are privately
funded, isn’t provision of infrastructure
still commonly a government’s domain?
Worldwide, airport infrastructure
development still largely remains a “public
affair”. However, Europe has been at the
forefront of airport privatization since
the late 1980s. Today, more than 20%
of Europe’s airports are privatized or run
as a public-private partnership. With the
sovereign debt crisis, we are now seeing less
appetite from European States to finance
airport development. So we are likely to
see even more private involvement into the
sector, as already shown with the recent
privatization of the Portuguese airports.
Having said that, securing private interest is
not always a given for Europe’s airports.
Apart from weaker growth prospects
compared to airports in other regions,
aviation policy in Europe is not necessarily
helping the day when it comes to
providing the required legal certainty and
stability, as well as helping to boost our
competitive position.
... from a European perspective
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Every year, donations by Emirates passengers
to the Emirates Airline Foundation help
to improve the lives of the world’s poor.
Recently, Emirates Foundation turned its
attention to the residents of Uganda’s Fort
Portal and Rwebisengo communities.
The foundation partnered with the non-profit
Outreach for Africa to arrange a visit by
Travis McDonald, a California-based doctor,
in October last year.
Dr McDonald and his wife provided medical
care to 500 people of all ages with a variety
of medical ailments during their month-long
stay, using medication, vitamins, syringes
and surgical items donated by California
businesses and families. “The experiences
we shared during our work in Uganda will
forever remain with us, and we hope to
make this service a lifelong tradition,”
Dr McDonald said. “We wish to thank
Emirates customers for their donation.”
Emirates Foundation in Uganda
Zaragoza
Gothenburg
Liege
Lilongwe
Viracopos
Taipei
Chittagong
Almaty
Kabul
Eldoret
Djibouti
Domodedovo
Venice
Newcastle
Toronto
Casablanca
Lisbon
Paris
Nice
Athens
Rome
Moscow
St. Petersburg
Copenhagen
SeoulBeijing
OsakaTokyo
Glasgow
ManchesterBirminghamLondon
Geneva MunichVienna
Milan
LarnacaTripoli
TunisMalta
Zurich
HamburgAmsterdam
Istanbul
DusseldorfWarsaw
Frankfurt
Shanghai
SingaporeKuala Lumpur
ManilaBangkok
Jakarta
Addis Ababa
Entebbe
Dar es Salaam
Johannesburg
Cape Town
Nairobi
LagosAccraAbidjan
Dakar Khartoum
Cairo
DubaiKolkata Hong Kong
Dhaka Guangzhou
Melbourne
Adelaide Sydney
Brisbane
Perth
Auckland
Christchurch
Thiruvananthapuram
ChennaiBengaluruKozhikode
LahoreIslamabad
Peshawar
HyderabadMumbai
Delhi
KarachiAhmedabad
Malé
KochiColombo
Mauritius
Seychelles
LusakaHarare
São PauloRio de Janeiro
Buenos Aires
New YorkWashington, DC
Los Angeles
San Francisco
Seattle
Houston
Dallas/Fort Worth
Luanda
Durban
Madrid BarcelonaAlgiers
Prague
Dublin
Ho Chi Minh CityPhuket
Lyon
Muscat
DammamBahrain
Riyadh Doha
Sana’a
JeddahMedina
BasraKuwait
Tehran
Amman DamascusBeirut Baghdad
Dubai
Erbil
Passenger Routes Freighter Routes Passenger & Freighter Routes
Route MapFebruary 2013
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Middle East Network
Fast Facts
Please visit our website for more information on our public affairs and environment activitieswww.emirates.com or write to us [email protected]
Aircraft in fleet 198Number of destinations 129Passengers (H1 2012) 18.7 millionCargo (H1 2012) 1.03 million tonnesPassenger Seat Factor (H1 2012) 80%Employees - Airline (1 Jan 2013) 39,465Nationalities - Airline (1 Jan 2013) 163Emirates dedicated lounges 31Number of on-board meals a day 150,000Emirates flights daily 390 (arrivals and departures)Recycling at our Dubai offices (2011/12) 5,340,000 kgsFinancial Auditor PwCFinancials (Airline - H1 2012) Revenue $9.7 billion, profit $464 millionFuel Costs (Airline - H1 2012) $3.6 billionFirst flight October 25, 1985Longest flight Dubai - Los Angeles (16 hours 20 minutes)New passenger routes (2012/13) Adelaide, Algiers, Barcelona, Erbil, Ho Chi
Minh City, Lisbon, Lyon, Phuket, Warsaw
and Washington DCA380 fleet 31 (on order 59)Boeing fleet 126 (on order 72)
Credit: ELLIS + LANE
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