Emirates and Etihad Boost Position in the UK Market

Emirates Airline is boosting its route from Dubai to Manchester with the introduction of a third daily non-stop flight to cater for what it describes as “a continued growth in demand”. Following the launch of the additional flight, Emirates will become the first carrier to operate three daily flights from Manchester to the same long-haul destination.

The new service, which commences on May 1, will increase the UAE carrier’s capacity on the route by a quarter and will be operated by a low-density, three-class Airbus A330-200 configured with 12 First Class, 42 Business Class and 183 Economy Class seats. “We’ve already filled the additional capacity we introduced with the A380 last year and demand continues to grow, hence this plan for further growth,” said Laurie Berryman, Vice President UK & Ireland, Emirates Airline.

The additional flight will depart daily from Manchester at 9:40am, giving North West travellers a broader choice of flights to Dubai and beyond, with enhanced connections to Thailand, and cities in the Indian sub-continent and Middle East, as well as other points across Emirates’ global network. “With the launch of a third daily flight, we’ve got Manchester covered morning, noon and night, offering business and leisure travellers from the region an incredible choice of travel options to destinations across the globe,” added Laurie Berryman.

Meanwhile, Abu Dhabi-based Etihad Airways, the UAE’s national airline, will double its flight frequency to Manchester from August 1 from seven to 14 flights each week. The news is a further capacity boost following the announcement earlier this year that the airline would increase from a daily schedule to ten flights a week this summer and follows less than a month after Qatar Airways announced its own plans to introduce a double daily schedule to Manchester from its Doha hub.

Source: Flightbase (August 14-20, 2011)

As the table above illustrates there will now be 49 flights per week to the three main Middle East hubs from Manchester with Emirates Airline, Etihad Airways and Qatar Airways each offering more than 3,000 weekly seats – Emirates offer more than double this number as it uses larger Airbus A380s and Boeing 777s on two of its flights. Looking at the wider UK market; the table below shows that there will be more than 200 weekly connections between the Gulf States and the UK in August 2011 with onward connections across the whole of the Middle East, Asia and Africa available through the three airlines’ burgeoning networks.

Source: Flightbase (August 14-20, 2011)

These three airlines have significantly changed traffic flows between regional UK destinations and destinations throughout Asia. In the past passengers generally connected via domestic schedules to London or the traditional hubs of Amsterdam, Paris, Munich or Frankfurt. However, more passengers are now making use of the expanding Gulf airlines, connecting via Abu Dhabi, Doha or Dubai. This means they have similar length sectors, rather than a short flight into Europe and then a longer direct sector to Asia. As James Hogan, Chief Executive Officer, Etihad Airways notes, the carrier has become “the airline of choice for business and leisure travellers, whether flying to Abu Dhabi or transferring through to destinations in the east, such as Australia, Thailand and Japan”.

Emirates Airline’s Dubai – Newcastle route is an excellent example to illustrate how the market has developed. The newest UK destination in the airline’s network, it is the only direct link to the Middle East from the north-east of England and in the past passengers would have had to travel via another European hub, south to Manchester or north to Edinburgh or Glasgow for long-haul connections. Emirates Airline launched the daily service in September 2007 and carried more than 160,000 passengers in 2010, according to official UK CAA data. But, how many of these passengers were beginning or ending their journey in Dubai and what proportion of this traffic was connecting onto other destinations? Well, official data shows that only approximately 42,500 O&D passengers travelled between Newcastle and Dubai in 2010 with Emirates accounting for around 90 per cent of this traffic. This means that more than 75 per cent of the traffic on the route is connecting onto other destinations and the table below clearly illustrates how Emirates Airline has made the route a success thanks to strong onward connections at Dubai.

Source: IATA BSP (January 2010 – December 2010)

Simply analysing O&D traffic from Newcastle to Australia shows that Emirates has been able to both stimulate demand and, importantly, take market share away from European and Asian rivals. It is the same when you look at three other key Asian markets - Bangkok, Hong Kong and Singapore, with traffic growth showing a similar pattern.

Source: IATA BSP (January 2010 – December 2010)

When you complete a similar analysis of O&D traffic to Australia from London Heathrow, where there is more competition from the likes of British Airways, Cathay Pacific Airways, Malaysia Airlines, Qantas, Singapore Airlines and Virgin Atlantic Airways, the strength of the Middle Eastern carriers is not so evident, with Qatar Airways not even making it into the top ten operators on the route. Interestingly, British Airways and Japan Airlines have faced the largest fall in market share, with Etihad Airways’ introduction to the market enabling it to carve out more than a five per cent share already.

Source: IATA BSP (January 2010 – December 2010)

At Manchester, Emirates Airline currently holds the market leader position to Australia with a 47 per cent share and the impact of its growth is clearly evident with its proportion of the traffic having grown by more than ten per cent since 2005. Etihad Airways has also secured almost a 13 per cent share despite only introducing flights in March 2006. And now, with all three expanding capacity at Manchester, it will be interesting to see how the flight for market share develops in the north-west of England.