Issue 6 | March 2010

The Dubai issue The past year’s press on Dubai has not been kind; and the city has, and is dealing with its share of big financial and future challenges. However this issue of Open Sky seeks to question and correct a fundamental premise we believe is wrong in the debate on Dubai of late; namely the attempt by some commentators and media to emphatically write-off an entire city. Putting aside the recent problems faced by Dubai’s real estate and construction sectors, which have not been insignificant, consider for a moment the airline and aviation industries. Last year was - by global standards - a relative boom at Dubai International Airport (DXB); if anything 2010 is showing a further significant surge in aviation activity for both Emirates and our hub. Much of this growth is being driven by the commercial success and continuing growth of Emirates, which remained profitable even during the worst of the recession and will soon report strong 2009-10 financial results. In addition to the home carrier, more than 130 scheduled commercial airlines now fly to DXB under an open skies policy; more than almost any other international airport worldwide. In recent months new carriers have arrived and they are as diverse as China Eastern and Kingfisher. DXB’s passenger traffic has increased by a yearly average of 10% since 1980, rising from three million people then, to more than 40 million last year; with cargo growing by 14% a year. By 2030, Dubai Airports forecasts passenger traffic at its facilities will reach 150 million, along with seven million tonnes of cargo and yearly aircraft movements of 750,000. These numbers mirror our own forecasts. Simply put, Dubai is an ultracompetitive aviation honey pot with a big future in our region and as a global-hub in a geographical sweet spot. Some competitors argue DXB is an artificial desert hub (see Open Sky issues 2 and 4), yet the airlines of the world - including most Star Alliance carriers - keep on coming; and Emirates welcomes the competition.

• More than 130 carriers fly to DXB compared to 125 at Frankfurt, 121 at Charles de Gaulle, 105 at Amsterdam, 97 at Heathrow and 86 at Madrid.

Consider these key trends:

• Dubai is less than 12 hours from 80% of world’s population and four hours from one third of world’s population.

• DXB managed 40.9 million passengers in 2009, up 10% over 2008. • DXB is now the sixth busiest airport worldwide in terms of international passenger traffic. • DXB is predicted to have 46 million passengers by 2010/11, making it the third busiest international airport in the world (behind Heathrow and Charles de Gaulle), overtaking Frankfurt, Hong Kong and Amsterdam. • Most airports reported negative growth in 2009. Apart from DXB, only a few others like Istanbul, Beijing and Kuala Lumpur reported increases.

• DXB is the fifth busiest airport for international freight volumes. • Dubai Airports anticipate traffic to approach 100 million by 2019. Despite the recession and new challenges in 2010, Emirates is seeing a strong demand pick-up in all three of our cabins and belly-holds. Last year presented enormous difficulties to all airlines, but our business fundamentals did not change, even if yields and profitability did. This confidence in our strategic plan is what drives and solidifies decisions to commit multi-billion dollar investments in aircraft like the A380 and A350.

Dubai economic milestones during 2010 1. Dubai hotel visitors will cross the 10 million mark in 2010, in a city of 185 different nationalities. 2. Every two minutes, 23 containers will be off-loaded at Dubai’s ports. 3. As of 2010, one in three Fortune 500 companies will base their regional offices in Dubai and The Economist rated Dubai as the most ‘Competitive Arab Economy’. 4. Dubai Internet and Media Cities today house more than 6,000 internet and communications companies. 5. In 2000, cruise liner passengers visiting Dubai totalled 6,900; in 2010 there will be 325,000. 6. In 1985 oil contributed half of Dubai’s GDP, in 2010 it will be just 5%. 7. Trade and logistics along with financial services will make up two thirds of Dubai’s economy between 2010 and 2015. 8. Dubai Mall will draw in over 40 million visitors in 2010, more than 750,000 every week. 9. In January 2010 Bloomingdale’s opened its first ever store outside of the US in Dubai and the world’s first Armani Hotel will open in Burj Khalifa.

10. The 18 stations of the Red Line of the Dubai Metro will open by the end of 2010 and the Metro will transport 1.2 million passengers over 72 km of track via 42 stations.

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Other views on Dubai ‘’Dubai’s key advantage - its superior infrastructure - will stand it in good stead during the recovery. The crisis has hurt Dubai’s aspirations, but the governance and transparency efforts undertaken to restore its reputation may make this plan more realistic over the medium term.’’ - Moody’s Investors Service “We have been in Dubai since 1946. In fact, we were the first bank to do business there. Dubai will retain its status as a regional financial center.” - Stephen Green, Chairman HSBC Holdings “Dubai shows that if you are part of the global economy, you do well; you don’t have to have oil.” - David Aaron, Director of the RAND Center for Middle East Public Policy “Don’t count Dubai out… It has world-class infrastructure, a high-quality talent pool, and will continue to be an important financial center for decades to come... Dubai has the opportunity to learn lessons... and thrive” - Carlyle co-founder, David Rubenstein

‘’Yet for all the dismay among investors at the decision to call a standstill on Dubai World’s debts, foreign businessmen and analysts are being careful not to write off Dubai’s role as the region’s premier service hub. Although nearby cities including Abu Dhabi itself and Qatar’s Doha have been trying to catch up and establish themselves as regional centres, even a smaller, more sober Dubai will have two main advantages: a more liberal culture and a well-developed international transport infrastructure. The Jebel Ali free trade zone by itself accounts for as much as one-quarter of Dubai’s economy.’’ - Financial Times ‘’To think that Dubai has sustained its growth and continued to be a magnet for capital from around the world, with virtually no underlying collateral to offer as guarantee other than the multiplier effect of money generating more money, is an astounding story in itself… I expect Dubai to soon be back in the global race for human and financial capital. No other city can claim what Dubai does: built on nothing but sand and human imagination.’’ - George Abraham, The Ottawa Citizen

¬ Airline Professionals. Join a dynamic, multicultural, global organization Emirates is currently seeking qualified candidates to apply for the following positions in our Public, International, Industry and Environment Affairs team, based in Dubai.

Manager, Public Affairs This role is to initiate, implement and manage public affairs, policy and government relations activities and campaigns which support Emirates key political, policy and stakeholder relationships and regulatory needs, as well as current and future aeropolitical and commercial aspirations. The role has a geographic focus and requires strong communication skills such as advocacy, speech writing and message development, as well as international political awareness. Creativity, an outcome focus and proactiveness are essential. Ref - M/MS/14264

Manager, International Affairs The role is to obtain, protect and enlarge the aeropolitical rights for Emirates through inter-government bilateral air services agreements and

inter-carrier cooperation, which allow the operation and the expansion of our route network. The successful candidate will be required to manage geographically focused government, political and bilateral projects. Skills required include negotiations and advocacy and technical knowledge of air services and code share agreements. Attention to detail, team work and an outcome focus are essential. Ref - MIA&A/MS/14262

Senior Analyst The role is to provide statistical and data input on public affairs, aeropolitical and environmental matters by preparing comprehensive analysis, negotiating options, business cases, reports, campaign proposals, policy documents and official responses. The successful candidate will have solid experience in advanced econometrics, data modeling, research and statistical analysis. Attention to detail, creativity and the ability to explain complex issues in simple terms are essential. Candidates interested in any of the above positions should apply via this link.

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The end of the airport curfew?

Open Sky: they said it best… Each issue Open Sky brings you the best quotes from our perspective on liberalisation, alliances, aeropolitical protection, free and fair trade, economic policy and global business. “The US Department of Justice, who are the experts in competition issues, called for strict remedies to protect the public interest, because the alliance will blatantly harm competition and the consumer…The Department of Transportation has chosen to stick two fingers up at them… this draft decision is a real kick in the teeth for consumers and they will be paying the price for it for years to come.’’ - Sir Richard Branson on the Department of Transportation’s recent draft decision on AA-BA. “Passenger numbers dropped in all traffic regions with the exception of the MiddleEast/Africa.” - Lufthansa Group commenting on its late 2009 results.

Amongst all the ear-splitting debate on aviation and the environment in the last year, the one issue that barely raised a whisper was aircraft noise. Three decades ago, aircraft noise around city airports was the only audible environmental debate. Airport protests were common, governments paid for expensive double glazing of windows in affected homes, and the media covered the topic endlessly in London, New York, Hong Kong, Sydney, Tokyo and Zurich. For many policy makers, the airport curfew was the solution. From 11pm to 6am, dozens of the world’s airports were closed for business. The economic price was high; closing even one major airport at night greatly affected others. A 10pm to 7am curfew in New York imposes an unintentional 2.30pm to 10.30pm curfew on takeoffs from Los Angeles to New York. The ripple effect of airport curfews continues to impact flight scheduling across the world. With the advent of modern, quieter aircraft, compliant with the latest Stage 4 noise standards, Emirates believes that the era of blanket airport curfews is drawing to a close. The economic and social benefits of tailored curfews, which reward the operators of modern, quiet aircraft, would greatly outweigh the technically redundant restrictions of blanket bans. In a 2008 study, Air Services Australia (ASA) independently reviewed the noise impacts of the new Airbus A380 over six months at 16 locations, in and around curfew-restricted Sydney, and compared these against the B747-400. The study showed that the A380 produces less than half the noise of the B747. The A380 was between 2.3 and 6.7 decibels quieter than the 747-400 on take-off (on the logarithmic decibel scale, a three-decibel reduction is equivalent to halving the noise level). The A380 is not the only quiet achiever. We will soon see the arrival of Boeing’s 787 Dreamliner and Airbus’ A350-XWB, with further noise reductions. And it’s not just manufacturing technology driving down noise. Operationally, commercial aircraft can be flown in ways never dreamed of in the sixties and seventies. Steeper descents and departures keep height from housing at a maximum, while modern navigation systems and ground GPS allow for aircraft movements away from affected communities. Toronto Pearson airport cleverly allows quieter aircraft to land before 7am while disallowing older, noisier aircraft. New aircraft need to be rewarded with landing slots outside of existing curfews in airports in Sydney, London, Tokyo, Zurich and Frankfurt. Why shouldn’t a new, quiet 500-seat A380 be rewarded versus an ageing Ilyushin-76 freighter or a 727 cargo operation? The economic benefits would be significant. The travelling public wins thanks to greater schedule flexibility and choice. Airlines win by not having to cancel flights that miss curfews due to weather or operational delays. And airport communities will still experience a net reduction in noise, with older, noisier aircraft relegated to day-time landing slots. Now is the time for governments to incentivise airlines who invest in modern, low noise aircraft through special curfew exemptions for outside slot landings and take offs. Will London, Sydney or Tokyo be first?

‘’The ‘virtual airline’ has not yet come to pass, but the virtually-useless alliance is closer than some airline managers would like to admit.’’ Wall Street Journal in a piece about the future of airline alliances. ‘’The third driver creating over-capacity in some markets is government policies. Many airlines are pressurised by their governments to expand services and widen networks in support of national policies to develop incoming tourism or local business. Such airlines tend to order or operate many more aircraft than required in the markets they are serving. The most recent and vivid example of this is that of the Gulf airlines, Etihad Airways of Abu Dhabi and Qatar Airways, which have been tasked by their governments to match the worldwide network and success of their neighbouring carrier, Emirates. For these carriers profitability is seen as a long-term objective, not a short-term requirement.’’ - Professor Doganis as contained in the recent edition of his book Flying Off Course. ‘‘High Speed Rail will generate demand for Heathrow and serving Heathrow will generate demand for HSR. However policymakers must realise that HSR will place increased pressure on an airport operating close to maximum capacity.’’ - Bow Group from its report ‘The Right Track - Delivering the Conservatives’ Vision for HSR’.

The perils of creeping protectionism

To its detriment, commercial aviation has a history of defying the gravity of sound global trade policy. Government officials declare it to be a ‘special case’ and rationalise that it therefore should be exempt from the same wise policy principles readily applied to other sectors. In the face of historic global economic challenges over the past 18 months, politicians sensibly sounded a clarion call to embrace open markets and resist the temptation of protectionism. Brazilian President Luiz Inácio Lula da Silva (left) warned “…protectionism can seem beneficial at first ...but in the long term, it wounds countries.” Lord Mandelson, former EU Trade Commissioner and current UK Secretary of State for Business, Innovation & Skills (middle), echoed this warning: “Economic openness is the engine that will power the global economy in the upturn. Protectionism may appear to treat the symptoms of economic downturn, but it is also the poison that prevents a full and fast recovery.” Ambassador Ron Kirk, the US Trade Representative (right), added “…now is not the time to turn inward. Now is not the time to be timid. Now is the time to revive global trade, and to lay the groundwork for an even more robust, more open trading system in future decades.”

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A world first for Wolgan Valley Within three months of its opening in October 2009, the new Emirates Wolgan Valley Resort and Spa in Australia received carbon neutral certification from leading New Zealand-based accreditation organisation, carboNZero. In doing so, Australia’s first conservation-based luxury resort also became the first hotel in the world to achieve carbon neutral certification from an internationally accredited greenhouse gas certification scheme.

Energy, to ensure 35% of the resort’s power comes from renewable energy sources. Wolgan Valley is also dedicated to sourcing regional food and supplies from within a 100 mile radius, which further reduces emissions associated with the transportation of these materials – as well as boosting the local economy.

carboNZero certification indicates that the greenhouse gas emissions associated with Wolgan Valley’s operations have been independently measured and verified in accordance with international standards. It also recognises the resort’s commitment to continuously manage and reduce its emissions and neutralise unavoidable emissions through the purchase of a small quantity of verified carbon credits. The certification of the A$125 million resort was made possible through a combination of initiatives, including large-scale environmental rehabilitation programmes, removal of cattle from the property, and protection of existing remnant vegetation areas. To date, over 175,000 indigenous trees have been planted in wildlife corridors and along creek banks on site. The overall footprint of the resort was already relatively low, due to the application of green building principles in its design and construction, including the use of solar power and heat recovery. The resort contracted its electricity supplier, Origin

COP15 - still all to play for After a year of long anticipation, the recent COP15 talks came and went in a flurry of snow and tear gas - with most parties involved being disappointed by the outcome. As one commentator wryly noted: ‘the aviation industry got nothing out of Copenhagen - nothing it wanted, and nothing it didn’t want’. Despite intense lobbying by the aviation industry, ably represented by IATA, ATAG and ICAO, there was not a single mention of aviation in the final Copenhagen Accord. Some may see this as a victory, but the continuing uncertainty plays into the hands of those wanting to further tax aviation emissions with a patchwork of double- and triple-dip taxes and levies.

The ball is now squarely in ICAO’s court, and those of its member states. Emirates continues to support a global, sectoral system for managing aviation emissions - a system prepared and administered by ICAO, which would involve fair and achievable emission reductions targets for the whole industry. The objective would be a system where aviation pays for its emissions once only, and where these funds are put back into aviation efficiency research and climate change mitigation. 2010 will be the year where ICAO has a final chance to come up with an industry solution, before one is foisted on us by the UNFCCC.

EU ETS - see you in court As foretold in Copenhagen by IATA’s CEO, Giovanni Bisignani, the US Air Transport Association (ATA) and three US airlines (American, Continental and United), lodged a joint action in December 2009 against the UK Department for Energy and Climate Change (DECC), challenging the legality of including non-European airlines in the EU ETS. The basis of the challenge questions the right of the EU (and its Member States) to legislate against carriers from other states, which is contrary to the terms of the 1947 Chicago Convention – the legal heart of modern commercial aviation. In a 2007 ICAO resolution on emissions trading schemes, the US fought hard for the inclusion of a clause that ensures states may only implement such schemes on the basis of a mutual agreement between the states

concerned. The EU Member States and other European countries expressed a formal reservation on the clause, indicating that they do not consider themselves bound by it. Despite most international law experts doubting the success of the action, Bisignani went on to say that he expects many governments to legally challenge the unilateral approach of the EU ETS in the coming years – with further challenges from the US, Japan, China and others. He maintains that aviation’s inclusion in the EU ETS “will not happen” in 2012, and that the European Commission knows “exactly” that aviation’s inclusion in its ETS is “simply illegal”, and in contravention of the Chicago Convention. The UK DECC has vowed to defend the US ATA challenge vigorously.

Emirates Friendship Hospital, which is sponsored by the Emirates Airline Foundation (a non profit charity organisation formed by the Emirates Group), docked at Tungipara in the Gopalgonj district of Bangladesh, where in the month of December 2009 alone it treated almost 6,000 adults and children.

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Greater competition...’a good thing’ Coincidentally, in an interview earlier in the month, Transport Minister John Baird stated that “If we can get more carriers flying into Canada, we hope it’ll bring more tourists and have greater competition through reduced prices in the long run … So that’s a good thing.” Emirates agrees and hopes that the Minister uses the study to override the calls for protectionism from Air Canada and their Pilot’s Union.

Air Canada’s response Air Canada’s contribution post the release of the report was to misread its contents and to suggest publically that Emirates had experienced low load factors on its flights between Dubai and Toronto. In fact, Emirates capacity on the route in 2008 flying a B777-300ER was 111,564 seats, of which 99,288 were filled - a load factor of 89%. Emirates recently released an economic impact study that showed the real price to Canada’s tourism sector, business, airports and governments of Transport Canada’s current protectionist aviation policy. The study, conducted by InterVISTAS - the independent transport and tourism consultancy - found that if Emirates increased to a double daily service to Toronto and added daily flights to Vancouver and Calgary, it would generate C$480 million of economic benefits and over 2,800 jobs for Canada:

In 2009, flying the same Boeing aircraft until 1 June and then the A380 for the rest of the year, 134,736 seats were offered, of which 122,870 were filled - a load factor of 91%.

• 274,927 new passengers travelling through Toronto, Calgary and Vancouver airports annually. • C$115.4 million in new economic activity at airports in Toronto, Calgary and Vancouver annually. • C$82.6 million in new tourism spending annually. • An additional C$246 million in new spin-off economic activity annually. • C$38.1 million in new tax revenue annually. The study also highlighted the creation of an additional 27,000 tons of cargo export capacity for Canadian goods between Canada, Dubai and points beyond. Currently, demand for cargo space for Canadian goods on Emirates flights exceeds capacity, with space routinely sold out months in advance. The study was released in Vancouver during the Olympics, where British Columbia Premier Gordon Campbell said: “This study identifies a great economic opportunity and highlights the need for more progress on Open Skies agreements to remove barriers to international tourism and commerce”...“As a province and a country, we need to capitalize on services like those offered by Emirates Airline to realise our full economic potential.” Premier Campbell was represented at the event by British Columbia Transportation Minister Shirley Bond (right in picture above).

Lufthansa’s Canadian website this month reveals that it is not shy of promoting its flights over Germany to India, Dubai and the Middle East & Africa - despite it and Air Canada’s repeated arguments about the dangers of sixth freedom carriage, when it applies to other carriers.

Ottawa defends Canada’s protectionist skies, Don Martin, January 2010 The world’s largest passenger jet, a two-story Airbus 380 behemoth, lands at Toronto three times a week packed with wealthy Arab tourists and energy-based business executives. The pride of the Emirates Airline fleet routinely fills more than 90% of its 489 seats to and from Dubai… For 11 years now, Emirates has been screaming protest at a full throttle roar, demanding permission to bring daily flights to Toronto, Calgary and Vancouver only to be told by Transport Canada there’s no demand for increased service. …This would be a bizarre one-off aviation anomaly if not for the fact that Transport Canada’s market interventions have already driven two global giants to depart Canadian runways. Both Singapore Airlines and Air France pulled out of Vancouver last year after the feds denied them daily flight access, relocating to Seattle along with hundreds of jobs and the business benefits of non-stop links to south Asia and Paris. What’s doubly bizarre is how wide and deep the support is for this particular airline’s service to expand. Transport Minister John Baird has been bombarded with pleas

from western premiers, mayors, MPs from all parties, Toronto business interests and tourism officials to boost gravity-defying links to the Middle East. …The best Transport Canada can come up with to explain its reluctance to approve daily service - and it took its spokesperson two days to find her speaking notes - is “there is no shortage of seats to meet the demand”. That’s code for Air Canada protectionism, even though the airline doesn’t fly to Dubai. It does, however, have partner links to Dubai through London or Frankfurt. Giving Air Canada special protection “is anathema to any logical business thinking and highly anti-consumer,” argues the Consumers’ Association of Canada. For a pro-business, free-enterprise Conservative government to obstruct its commitment to open skies, a policy renamed to fit with party colours as a Blue Skies policy, is unconscionable in a world where keeping our businesses globally linked and competitive is a key to the recovery.

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Extracts from Speech by Tim Clark to the UK Airport Operators Association annual dinner on 2 March 2010 Our most pressing need is to persuade whichever party forms Government this summer to pursue policies that enable the economic benefits of aviation to be fully realized. This deep and serious recession has reminded all of us that jobs are precious, investment hard to come by, sales never easy and international mobility crucial. The fact remains that any serious international carrier wants to serve Heathrow, given its global status. It was no accident that Emirates’ first route for the A380 was Heathrow in December 2008. We plan to add a second A380 to Heathrow, meaning two of our five flights a day will be on the superjumbo. Emirates is encouraged by and intends to take advantage of the proposed ‘green slot’ principle for the new runway as outlined by the Government in 2009. This incentive is good policy and we applaud the bias shown to fuel, emission and noise efficient aircraft.

half of our daily frequencies to the UK are to cities outside London. UK regional airports are catalysts for economic and social development in their local cities and surrounding regions, particularly when long-haul services are secured. Through our growth of operations to Manchester, Birmingham, Glasgow and Newcastle, we see these markets can support, and that their economies are supercharged, by long-haul services. Such success, in combination with positive change at Heathrow and Gatwick, says we can be more optimistic.

Heathrow is one of Emirates most important airports and we support its expansion and the third runway, but the lack of infrastructure investment has meant in 20 years Heathrow has fallen from first in Europe to fifth in terms of destinations served. Without a serious re-assessment of the importance of a fully functional Heathrow to UK Plc, there is a real risk we cross a tipping point in operational integrity. We recently submitted a detailed proposal to the UK CAA outlining what we call an EcoApproach for the most modern QC2 compliant aircraft types arriving into Heathrow. This would considerably enhance its capacity, but not at the cost of higher noise, emissions or tarmac laying. It covers approach and landing and is similar to the solution adopted to improve noise reduction on departures to allow for a smarter curfew operation. For our part, Emirates injects well over £260 million each year into UK local airport economies and has a total fleet related UK gross capital spend of £15.4 billion. We have been serving the UK regions for almost 20 years – in fact we started serving Manchester before Heathrow – and today almost

Aviation’s rare gift is the ability to not just reflect existing economic and tourism connections between regions; but to grow them with a significant multiplier effect. So let’s not forget this or allow others to ignore it, particularly in this, the most important year in the great British democratic cycle. Volatility and disequilibrium dominate the global economy, skewing the data upon which decisions for long term, capital intensive projects depend. With the UK’s national debt as colossal as it is, appetite for huge undertaking I accept, is not there at the moment. But ladies and gentlemen, the industry’s return to equilibrium is not as far off as some people believe, and our industry will emerge stronger, leaner and more fit for purpose.

Growing the tourism pie - a German perspective Do foreign carriers just redistribute existing passenger traffic within a market, with an insignificant increase in visitors? Data from the German Federal Statistical Office on inbound tourist numbers to Germany seems to put to rest this redistribution vs. overall market growth argument. Total international visitors to Germany have nearly doubled over the last 15 years - a significant increase in the size of the overall pie.

Overseas visitor arrival growth into Germany: indexed 1994–2008

Total Japan China/Hong Kong India Arabian Gulf States Asia Africa Australia, New Zealand and Oceania

Overnight stays Overnight stays 2008 forecast 2015 6,039,837 7,700,000 1,130,328 1,200,000 942,988 2,000,000 421,514 750,000 776,550 1,600,000 4,979,828 6,700,000 463,399 400,000 569,610 600,000

Population in millions 5,018.2 127.9 1,343.6 1,186.2 33.5 3,998.7 985.7 33.8

The growth rate varies considerably by market. Tourists from Africa, the Americas and Asia grew below the average growth rate, whereas those from Australia/Oceania and Europe grew in line with the average. One market’s growth rate stands out over the past 15 years - tourists from the Arabian Gulf States, where numbers quadrupled. While Emirates is only one of many carriers to expand its services to Germany - from just two weekly flights to Frankfurt in 1987, to today’s 49 weekly flights to four cities in Germany - we are confident that our flights were responsible for a good chunk of this growth. Even the Lufthansa sponsored ‘Initiative Air Transport’ from summer 2009, confirmed that Emirates most recent additional flights to Düsseldorf resulted in a bigger overall passenger market for all carriers from Germany.

Growth in overseas visitor arrivals into Germany, indexed at 1994 levels. Source: German Federal Statistical Office.

The German National Tourist Board expects that the number of tourists from the Arabian Gulf States will grow further, forecasting they will spend 1.6 million overnight stays in Germany in 2015 - almost as much as Japan and India combined.

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Kangaroo logic Passenger market shares between London Heathrow and Australia - All classes

Alliances, joint services and revenue sharing agreements all add up to less competition and reduced consumer choice. Yet in its February 2010 statement approving a five year extension to the Qantas-British Airways Joint Services Agreement (JSA) on the Kangaroo Route, Australia’s competition regulator said that: “The increasing competition from other carriers means the JSA is unlikely to result in any substantial lessening of competition in the relevant markets”. It is important to note that British Airways downgraded and exited Brisbane, Melbourne and Perth markets following the commencement of the JSA and this followed the trend of European carriers stopping services to Australia in lieu of their Star and SkyTeam alliance partners. On the same day the ACCC issued its above approval, British Airways announced it was reducing services to Sydney - despite reporting loads of 86% in the most recent Bureau of Infrastructure, Transport and Regional Economics (BITRE) data. The renewal of the JSA secures significant revenue streams for Qantas-British Airways, but more importantly cements oneworld’s position on the route (see pie chart).

Source: MIDT 2009

The Emirates-Australia partnership continues to deliver on employment, investment, tourism and trade - and was further strengthened during recent UAE-Australia talks in Canberra. Existing arrangements allow Emirates an extra seven weekly services from March 2010 and a further seven from March next year were confirmed. Commenting prior to the talks, the Hon Anna Bligh MP Premier of Queensland said “My Government appreciates the long-term commitment Emirates has shown to Queensland and Australian airline and tourism industries. Certainly, we are living in difficult economic times and it is important the aviation sector is innovative in its response to emerging challenges.”

British Airways and Qantas cited competition from Emirates among others as a main reason for requiring the JSA to be renewed, even though the numbers simply do not stack up. On the route between Australia and London Heathrow, Emirates has 8% and 9% of Economy and First/Business bookings respectively, compared to the combined share of 35% and 43% for Qantas and British Airways. In the view of Emirates, regulators must look more deeply at issues of market concentration and the overall influence of alliances on consumer choice and competition on key routes.

• Aircraft in fleet

145

• Longest flight

Dubai - Los Angeles (16 hours 25 minutes)

• Number of destinations (passenger and cargo)

102

• Shortest flight

Muscat - Dubai (1 hour)

• Passengers (2009)

25.9 million

• First flight

25 October 1985

• Seat factor (2009)

76.2%

• Employees (Airline)

28,791

• Cargo (2009)

1.47 million tonnes

• Nationalities in workforce

154

• Weekly departures from Dubai International Airport

1,196

• Financials 08/09 (Airline)

Revenue US$12 billion, Net profit US$268 million

• New 2010 routes

Amsterdam, Dakar Madrid, Prague, Tokyo

• A380 routes

Auckland, Bangkok, Jeddah, London Heathrow, Toronto, Paris, Seoul and Sydney

Gothenburg Glasgow Newcastle Hamburg Manchester Amsterdam Birmingham Dusseldorf London Frankfurt Prague Paris Munich Zurich Vienna Venice Milan Nice Zaragoza Rome Madrid Athens Tunis Malta Casablanca Tripoli

Toronto Toledo San Francisco

New York

Los Angeles

Graphic illustration only, not a complete representation or to scale. © 2010. Emirates. All rights reserved.

Houston

Moscow

Istanbul Larnaca Cairo

Kabul

Abidjan

Accra

Addis Ababa

Luanda

Chennai Kozhikode Kochi Thiruvananthapuram Colombo Malé Kuala Lumpur Bangaluru

Lagos Entebbe

Karachi Dhaka Ahmedabad Kolkata Mumbai Hyderabad

Eldoret

Nairobi

Dar es Salaam

Seychelles

Tehran Beirut

Amman

Tokyo Osaka

Guangzhou

Kuwait Dammam Bahrain Riyadh Doha

Taipei

Hong Kong

Jeddah

Manila

Bangkok

Sana’a Singapore Jakarta

Route Map

Lilongwe Mauritius São Paulo

Damascus

Shanghai

Lahore Delhi

Dubai

Khartoum

Dakar

Beijing Seoul

Peshawar Islamabad

March 2010

Johannesburg Durban

Cape Town

Brisbane Perth Melbourne

Sydney Auckland Christchurch

Andrew J Parker - Senior Vice President Public, International, Industry & Environment Affairs Email: [email protected]

Will Löfberg - Manager Public Affairs Email: [email protected] or [email protected]

Dubai

Sharjah Muscat

©2010. Emirates. All rights reserved. ©2010 Emirates. All rights reserved. January 2010

Fast facts

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