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Emirates Order for 90 A380s ‘Not Enough,’ Clark Says
September 09, 2010, 10:13 AM EDT
By Steve Rothwell


(Updates with analyst’s comment in seventh paragraph.)

Sept. 9 (Bloomberg) -- Emirates, the world’s biggest airline by international traffic, said the 90 Airbus SAS A380 superjumbos it’s buying won’t be sufficient to meet the carrier’s projected demand.

The aircraft “are well spoken for and frankly, the way things are going for us at the moment, the 90 certainly won’t be enough,” President Tim Clark said today in a phone interview. “Demand for our services seems to be continuing to grow apace. We’re moving forward very robustly.”

The carrier, already the biggest customer for Airbus’s 517- seat plane, has expanded its traffic sixfold in the last decade by connecting international passengers through its Dubai hub. Emirates is also the biggest operator of Boeing Co.’s 777 long- range airliner.

Emirates has 12 Airbus A380s in its fleet, with another three to go into service by November. Deliveries will restart in September 2011, with the carrier receiving the remaining planes through November 2017.

The pace of development at Dubai airport, which last year handled 41 million passengers to rank as the 17th-busiest hub in world, was one of the main obstacles to growth, Clark said. The executive estimated that the airport, growing at about 15 percent a year, will handle as many as 100 million passengers by the end of the decade.

“There is no point trying to bring airplanes at a time when you have no place to put your passengers,” Clark said.

Second Airport

Dubai is developing a second airport, Dubai World Central- Al Maktoum International, which opened to cargo carriers in June and will start serving scheduled passenger flights in March. The government aims to make Al Maktoum the world’s busiest airport, with eventual capacity for 160 million travelers, and Emirates will shift its base there.

Al Maktoum will need 10 to 15 years before enough carriers have moved there to make it Dubai’s main airport, Clark said.

Emirates’ ability to maintain expansion may also depend in part on competitors in the Persian Gulf region that are pursuing a similar strategy, said Andrew Lobbenberg, a London-based aviation analyst at Royal Bank of Scotland Group Plc.

Qatar Airways Ltd., half-owned by the state, has orders and options for more than 170 Boeing and Airbus planes to build up its base in Doha, about 235 miles (380 kilometers) west of Dubai. Etihad Airways, government-owned by Dubai’s neighboring emirate of Abu Dhabi, also has expansion plans.

“A lot depends on what happens with the other Gulf carriers,” Lobbenberg said in a telephone interview. “If Dubai survives as the sole hub in the Gulf, then you could justify a more aggressive outlook.”

The expansion of the three airlines has helped boost traffic in the Middle East by 19 percent in the year to August, making it the fastest-growing region in the world this year, according to data compiled by the International Air Transport Association.

--Editors: Tom Lavell, Jerrold Colten.

source:http://www.businessweek.com/news/2010-09-09/emirates-order-for-90-a380s-not-enough-clark-says.html