Emirates: Secondary connections, primary goals
17 / 05 / 2014
It must be hard for the cargo team at Emirates to keep up with all the new destinations that are added to their network each year. Oslo, Stockholm, Boston, Chicago, Taipei, Kabul, Abidjan and Conakry have all had new Emirates services in the last eight months, and the carrier has just announced it will launch Brussels on 5 September.
The carrier now has an astonishing 48 A380s in service, but it has an even more breath taking 93 to come, having signed for a further 50 at the Dubai Airshow last November. It is already the largest B777-300ER operator in the world, with 93 and another 59 on order, and has ordered 138 of the new souped-up B777-Xs. Emirates also plans to re- place its current A330 and A340 fleet with 70 A350XWBs.
Set against all this, the fact that it now has 10 B777 freighters in its fleet, plus two wet-leased B747-400-ERFs, seems like a minor detail. But it is not minor for Emirates SkyCargo, which relocated 30 per cent of its cargo tonnage to Dubai World Central (DWC) when its freighters moved base to the new airport at the start of this month.
Nabil Sultan, who took over from Ram Menen as divisional senior vice-president of cargo last June, could not be more enthusiastic about the B777Fs. “Their fuel efficiency has given us huge leverage to operate into places where the producers are and bring their cargo into our hub to distribute on passenger flights,” he says.
When people ask how Emirates can keep growing while the rest of the air cargo world stagnates, here is part of the answer: on the one hand the carrier has the maindeck capacity to fly 30 freighters a week to China – 19 to Hong Kong, eight to Shanghai and two to Guangzhou – and on the other hand it has a formidable widebody belly cargo network to distribute from or feed into them.
“We don’t just go to the metropolitan centres, but also to the secondary cities with multiple widebody frequencies,” says Sultan. “For example, we fly widebodies to North African cities, not narrowbodies as many other carriers do. We give these places a connection to almost the whole rest of the world.”
The sheer range of these possible connections are what helped Sky- Cargo maintain its growth in the downturn. “We can activate and de-activate markets depending on demand and serving secondary cities helps us maintain our yield. We always had our plan mapped out very clearly. During the bad times we did not back off because we always felt the good times would return and we would then be well-positioned.”
Impressive though Emirates Sky- Cargo’s freighter fleet may look to a world that seems to be rapidly retreating from all-cargo aircraft, it has in fact grown only proportionately with the passenger network in recent years. Given that the fleet is due to rise from 206 today to 312 aircraft by 2018, one might expect further freighter expansion to be on the cards.
And indeed Sultan says an eleventh B777F is coming in July and a twelfth in October. Number thirteen may be on the cards for 2015. In the meantime, he intends for now to retain the B747-400ERFs “since we need the capacity”.
One thing that might require even more freighter capacity is the increasing use of A380s – the one Emirates aircraft that is not so generous with belly space. Sultan admits that at airports such as Heathrow, where A380s have replaced B777s, belly space has been squeezed. “But we’ve added two freighter frequencies to Heathrow and these have grown capacity,” he says.
Asked what the situation might be when there are 140 A380s in the fleet, he gives a diplomatic answer. “We will have to wait and see,” he says. Given the importance of the freighters feeding bellies and vice versa, the move of all-cargo operations to DWC at the start of May – a move motivated by the need to create space for passenger growth at Dubai International Airport (DXB) – must inevitably have added some complexity to operations.
But there are upsides as well. The cargo team have until now been squeezing 1.9m tonnes of cargo into a facility at DXB designed for 1.2m. Now at DWC they get a massive additional cargo facility with a throughput of 700,000 tonnes. The new terminal also has a big increase in coolchain space – 15,000 square metres, of which some 8,000 is set to 2-8 degrees, 1,500 sq m is freezer, and 23 compartments can be set to any temperature required.
Meanwhile the need to truck cargo between the two airports has been eased by the construction of massive new trucking docks at either end, and an agreement with the authorities to create a virtual corridor between the two airports. Sultan says that as a result quick ground transfer times will be unchanged at a couple of hours. “For units that require breakdown, timings may increase, but by an hour or an hour and a half, no more.”
Capacity at DXB is also to be expanded, with Emirates taking over a 450,000-sq m Dnata building, which will be ready for use by the end of 2015. Coolchain space at DXB is also being expanded by 6,500 sq m, almost doubling it.
It is easy to see that even all this space could soon be full if Emirates’ expansion continues as it has. But can the airline keep growing in an air cargo market that has been stubbornly static in recent years? Is Sultan not worried about modal shift to sea freight, nearshoring, and other factors supposedly sup-pressing air cargo demand?
No, is the short answer. “There are certain verticals – for example technology and fashion – for which speed in transport is essential,” he says. “When launching a product, the question is always how quickly can it be got to market, or how quickly can it be replaced on the shelf? For example Zara [the Spanish fashion chain] has to have product on the shelf every Wednesday and Sunday. To meet that challenge requires the kind of speed which only airfreight can provide.
“And while some commodities may switch to sea, a hundred products will come along that will replace them, and probably at greater rates. The key is the network you have, your positioning and the age of your fleet. Efficient fleets are essential. If you can get 20 per cent improvement in fuel efficiency it makes all the difference.”
Another kind of efficiency is also on Sultan’s mind. He came to cargo after a 23-year career on the passenger side at Emirates, and was surprised to discover air cargo still using paper airwaybills and documents.
Ten months in the post have shown him the complexities of the e-freight project, but he reckons an even greater push is needed from right across the industry, particularly to involve the authorities – not just Customs, but also government ministers and even police if they are responsible for airport security.
“It is a big challenge, as they have been doing things in a certain way for 60 years and you are asking them to change it.
“An element of trust is needed, but we also need to have comprehensive solutions to take to them. Having one body that takes the lead is essential. It cannot be a one airline initiative.”
He also says the digitisation of shipper documents is being held back by forwarder concern about data security. “The question is: how do you keep their customers’ data safe and be sure it is not seen by their competitors? But I don’t think this is a major task: I think it is achievable.”