Current challenges in the WA aviation industry - part 2

by Kassem Seedat, Specialist Consultant - Legal and Commercial

Emirates Airlines has announced the withdrawal of 1 of 2 daily services, opting to mothball the daily EK424/EK425 service, operated by a B777. This leaves EK420/421, an A380 service, as sole daily return offering to Dubai. The ostensible reason for this is the planned closure of Dubai International Airport’s southern runway for planned April-May 2019 resurfacing and upgrade works, something which the airline says will reduce its capacity by 25% over this period.

Another reason which can be put forward is that Emirates is being beaten at its own game: other airlines are offering equal or more competitive products both in aircraft amenity and service quality.

It’s been a tenet in civil aviation since shortly after the Emirates model started that Emirates pioneer routes, only for Abu Dhabi’s Etihad Airways and Qatar Airways to copy these with exemplary service and better staff conditions. Etihad withdrew a daily service to Perth in October 2018, citing the need to “improve system profitability”.

Now, Australian and in particular prospective WA passengers flying from Perth can choose between other carriers with arguable better fleets: Cathay Pacific’s A350s to southern China as intermediate stop, Singapore Airlines’ B787 aircraft to the lion city and then on to ultimate destinations or Thai Airways’ B787s. Each obviates transiting in the Middle East, which for many locals has become anathema. With ANA (All Nippon Airways) to start return daily B787 flights to Tokyo-Narita in September this year (promising another route onwards to third destinations), load factor pressure on Emirates is likely to increase.

More pointedly, since March 2018, Qantas’ daily B787 direct flight to London Heathrow offers something which no other airline can boast: non-stop flights to the European capital most favoured by Australian travellers. This route is amongst the airline’s most popular with an extremely high take-up despite the 17-hour flight time.

In short, Emirates can’t really compete as it used to either by luring travellers with a one-stop route to Europe or supposedly the newest fleet, at least not from Perth.

Another factor is that inbound tourism to WA has been and continues to be weak. Overall, international visitor numbers grew 0.6% in the year to September 2018, according to preliminary statistics published by the State government agency Tourism Western Australia, being 11.3% of all international visitors to this country. When one considers that international visitor numbers to Australia as a whole increased by 6% for the same period (per Tourism Research Australia), WA’s difficulty in attracting visits to the “wrong end of the continent” are put into an uncomfortable relief.

Tags: Airline Competition, WA Tourism

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