The Business Herald’s markets and banking reporter.

13-year journey paying off for airline

Emirates veteran sees more potential yet in NZ market

Vindication. That's how top Emirates executive Gary Chapman views the airline's growth in New Zealand over the past 13 years.

Since 2003 the Middle Eastern carrier has expanded to the point where it now operates five daily services here, flying more than 2000 seats into and out of the country every day.

READ MORE: 17 hours in the sky: Diary of the world's longest flight

The fifth service - a non-stop flight into Auckland from Dubai, avoiding the usual stopover in Australia - launched this week.

In an interview at Auckland Airport after jetting in on the inaugural flight, Chapman recalled the launch of Emirates' first service here.

"I remember coming on that service with our chairman, Sheikh Ahmed, and I also remember there were a few journalists that were perhaps a little bit, I wouldn't say cynical, but were questioning whether this would be a long-term commitment with Emirates or whether we would be gone tomorrow."

He says those "doubters" have been proven wrong.

"Now we've got the non-stop, I think that's really strong evidence of our commitment and how important New Zealand is to us." So with five daily services up and running, is that it for Emirates in New Zealand?

"I don't think you can say that," Chapman says. "I think the stronger New Zealand becomes and the opportunities for freight and passengers increase then you continue to look at these things."

He says there is potential for the daily non-stop flight, currently operated with a Boeing 777-200LR, to be upgraded to an Airbus A380 super-jumbo.

"As demand builds, and it's building very strongly, I can see a time when we have the A380 on it." Chapman is Emirates' president group services, and is in the top echelon of the company with chairman and CEO Sheikh Ahmed bin Saeed Al Maktoum and Sir Tim Clark, president of Emirates Airline.

An accountant by trade, his responsibilities include all of the carrier's finance, human resources, medical services and legal functions.

Chapman also happens to be a Kiwi who grew up in Papatoetoe and left New Zealand in 1975.

"I never had any plans to leave, but I went on a trip to Europe and never quite got back," Chapman says. "I'm not alone in that."

He says the non-stop flight is an important addition to the airline's services into this country and forward bookings are already solid.

"By taking out Australia, you reduce the travel time by three hours and it enables people coming from Europe and the Middle East and Africa to have one stop into Auckland and vice-versa."

Auckland Airport chief executive Adrian Littlewood says the new Emirates service is another important step in growing New Zealand's tourism market.

"Opening up that direct service from Dubai really gives us significant capacity into some of those important markets in the Middle East, India and other markets that Emirates serves," Littlewood says.

We cover the globe, employing well over 100 nationalities.
Gary Chapman

Chapman joined Emirates in 1989. By that stage he had already been working in the Gulf for more than a decade.

The airline has seen phenomenal growth since he joined.

Emirates, which is owned by the Dubai Government, reported a 10 per cent lift in annual revenue in its last financial year to US$26.3 billion, while profit jumped 34 per cent to US$1.5 billion.

Chapman also heads Emirates Group's ground handling, flight catering and cargo business. Additionally, his brief covers the management of jet fuel price risk, a crucial responsibility in any airline.

Chapman says Emirates' government ownership allows the airline to take a long-term view.

"You don't have to worry about a share price ... and let that drive what you do," he says. "You're not looking over your shoulder at the analysts who think they can do a better job than you." He says Emirates has been "blessed" to be based in Dubai.

"The Government sees aviation, communication and trade as essential to growth." It's not all sunshine and roses, however.

One of two Emirates A380 super jumbos arrives at Auckland International Airport. Photo / Dean Purcell
One of two Emirates A380 super jumbos arrives at Auckland International Airport. Photo / Dean Purcell

The United Arab Emirates, like other big oil producers, is hurting from a more than 70 per cent slump in crude prices.

"Where we're based, in the Middle East, the economies are predominantly driven by oil," Chapman says. "You've now got roughly two-thirds of the revenue flows taken out of the Middle East region. That liquidity squeeze doesn't help anyone." He says those dynamics will inevitably impact the corporate travel market that's a big earner for airlines like Emirates.

Rival Gulf airline Qatar Airways and Singapore Airlines have also commented that the oil slump is affecting business travel.

On the other hand, low fuel prices have been a blessing for airline profitability.

But Chapman says a stronger US dollar has limited the benefit for Emirates. "Lower oil prices have been a bit of a boon for the aviation industry, but we are a US dollar-based business and the strong US dollar has worked against us," he says. "On one hand we've done well on lower fuel costs, but on the other hand the yield has actually suffered."

On the recruitment front, Chapman says Emirates will be taking on 400 to 500 flight deck crew and up to 5000 cabin crew this year, including in New Zealand.

"They're quite big numbers," he says. "We cover the globe, employing well over 100 nationalities and we're looking for the very best people for the job." Chapman, meanwhile, wasn't jumping straight back on the plane on Wednesday for its return flight to Dubai.

He was staying in Auckland for a few days to catch up with friends and family and is spending the weekend in Whitianga before getting back to business.

Gary Chapman

• Responsible for the Emirates Group's finance, human resources, legal and IT functions, in addition to managing ground handling and travel services company, dnata.

• A qualified accountant, joined Emirates in 1989.

• Before joining the Emirates spent 12 years with a company involved in construction and the provision of support services to the oil industry with postings Oman, Bahrain, Kuwait, Paris and Houston.

• Big role in Emirates' sponsorship of Team New Zealand

- NZ Herald

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