Changes coming at Emirates?

There are changes coming at Emirates and (although the local media will not tell you this) they all suggest a slow down in the airline’s growth.

Timely – this just in from Gulf Business on 25th July. Dubai’s Emirates denies alleged recruitment freeze

First up – there are some flight reductions which is not something EK has done in the past few years.

1 October FCO from 3 to 2 daily
1 August LED from 7 to 5xw
1 August SAW canceled
1 September LIS from 7 to 5xw

Also LAX will operate seasonally with a B77W instead of A380, BKK will be reduced back to 6x daily from 7, and GIG-EZE down gauged to B77L from B77W.

There are a number of other seasonal reductions; including to Jakarta and Oslo.

Second – the impending arrival of Christope Mueller (former CEO of Malayisan) who is joining EK as Chief Transformation Officer.

Mueller has previously worked as CEO at both Aer Lingus and most recently at Malaysian. At both airlines he has a blank sheet to turn around the airline. Although it appears that some of the changes at Malaysian led to conflict with the government owners.

Here is Mueller talking about change management:

Christoph Mueller talks about multi-cultural dimensions of change and corporate culture

He does not need my advice – but start with the key numbers; do not believe anything that is put in front of you. Verify every piece of key data. Have a team of people that you trust to give you the analysis that you need.

Maybe the first place to tackle will be the $2.7billion in sports marketing and promotional costs. No more Jennifer Aniston?

Third – the rumour mill says that EK has just put all new ground employments on hold. Effectively a hiring freeze. A common managemnet technique in the 1990s and 2000s.

Rumours also of a slow down in cabin crew recruitment and/or unpaid leave.

Fourth – rumours of over – capacity (see reductions above) has led to suggestions that some of the A380 orders may be converted to smaller A350s.

That said with the space and landing slot restrictions at DXB EK basically needs a smaller number of very large planes rather than a larger number of smaller planes.

But the phasing out in 2016 of the remaining A330s and A340s means that EK has no smaller plane for new thin routes or for regional routes.

Fifth – as a global pilot shortage starts to bite, Emirates seems to be doing little to keep experienced pilots while reducing the entry requirements for new pilots. That has to put even more pressure on the training functions. Pilots complain of excessive flying hours and lack of rest due to east/west and night time rosters.

Sixth – Constraints at DXB do hold back EK’s ability to both grow and to be flexible with its fleet. DWC was originally planned to be fully operational now. It will not be until around 2025. The only way forward is to move flydubai to DWC in full to free up arrival and departure slots at DXB.

All that said; Emirates is profitable. Fuel costs are still working in the airline’s favour and the airline’s broad network means that geopolitical issues in one location can be offset by new opportunities elsewhere.

But the very fact that the company is hiring a CEO level Chief Transformation Officer means there is a real sense that change is needed.

Mueller starts officially in September. I suspect the briefings are already underway.





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