Interview: Emirates CEO on the Next Generation of Fees
Photo Credit: Few airline CEOs have driven as much innovation as Emirates' Tim Clark. But with business faltering slightly, he may soon make some tweaks to the airline's passenger experience. Emirates Airline
Skift Take
Emirates may be among the world's most innovative airlines, but even it is focused on the bottom line. And since fares have been falling, coach passengers may need to get used to the idea that Emirates will start charging for extras, just as other airlines do.
Future of Passenger Experience
To better understand the challenges facing airlines in an age of fluctuating oil prices, rapid growth, and changing passenger expectations, our Future of Passenger Experience series will allow leaders in the industry to explain their best practices and insights.When other airlines stuck with the status quo, Emirates CEO Tim Clark took chances, both on a giant unproven aircraft — the Airbus A380 — and on a series of passenger-centric innovations, including first class suites with doors, onboard showers and opulent bars.
After more than 30 years at Emirates, Clark is likely more responsible for the airline's success than any other executive. He has taken the airline from a small, Dubai-based carrier into a major global player and massive travel brand synonymous with luxury.
But like all airlines, even Emirates has its troubles. The airline historically has made much of its profits from shuttling oil executives around the world, a business that has become less lucrative as oil prices have fallen. Emirates has also seen demand lag in some areas hit by terrorist attacks and other external shocks. And on the passenger experience front, many airlines have finally caught up with Emirates, with several offering similar perks for premium passengers.
Emirates is still making money — it says it has been profitable for 28 consecutive years — but it has been forced to discount tickets in some markets. And the airline, which has generally not charged for extras like seat assignments or checked luggage, is now planning to be more aggressive in assessing ancillary fees from coach passengers, so it can recoup some of its lost ticket revenue. It's also evaluating adding a premium economy section.
Skift spoke with Tim Clark at the Global Aviation Festival recently in London, asking him about the state of Emirates' business and about the carrier's recent investments in its passenger experience.
Note: This interview has been edited for length and clarity.
Skift: With a global slowdown in the oil economy and terrorist attacks in Europe, how is is business?
Tim Clark: Although passenger numbers are growing, we're having to introduce fare levels that are considerably lower than they were before, to induce people to travel. This is a result of all sorts of things going on in the last 18 months — whether it be socio-economic side of things or whether it be the terrorist activity, which has been prolific in the last two years, starting with Paris in November of '15, then Brussels, then Nice. Then, the bombs in Istanbul airport. As you work your way through all of this, you can see how that will impede demand for air travel.
