Emirates looks at add-on fees as life gets tougher

Two Emirates A380 superjumbos at Auckland International Airport. Photo / Dean Purcell

Emirates boss Sir Tim Clark is searching for new ways for the airline to thrive - including more add-on charges - as the aviation industry becomes harder to forecast.

He's been there since the start of Emirates in 1985, and while it was shaking up the airline industry before the word "disruption" entered the business lexicon, the new disrupters are now causing it headaches.

After a tough start to the year there's been a return to growth in the United States following the lifting of the laptop ban, he says, Britain and Europe look strong and Dubai-bound flights from Oceania - despite being forced to drop uneconomic transtasman services - ar also healthy.

The airline has delivered 29 consecutive years of profit. But Clark says he's not as certain about what the future holds as he was in the past.

"It's not as easy to predict and forecast as it might have been 10 years ago - anything can happen. It's a question of having to navigate through the short and medium term as to what the network is going to look like," the airline's president told the Herald from Sydney where he met Qantas counterpart Alan Joyce.

The rise of long-haul, ultra-low-cost carriers is something Emirates is watching.
Norwegian Air has brand new planes offering seats across the Atlantic for $150, and Air France has just unveiled a new budget airline, Joon, targeting millennials.

"We've got to see how the likes of Norwegian get on with this - if they make it work and it's a going concern and deliver the profits - other entrants will look at that and think if they can do it, so can we," says Clark.

He says the industry is in a test period at the moment.

Emirates has recently ended its all-inclusive ticket pricing policy by offering passengers seat choice at a cost, as other airlines have been doing for years.

"A lot of the complaints we got were that people were unable to choose a seat together - groups, families - and they said to us 'we will pay more if we can have the emergency exit row' or whatever. It's served both purposes, increased income for us, but also allayed the concerns for people about where they were going to sit."

Clark says the airline is also looking at baggage charges. Passengers to the United States don't necessarily want 46kg of luggage, he says; they may rather have a cheaper fare for 20kg, and if they want more luggage allowance, should pay for it.

Charging for priority check-in, and more access to global lounges (for those who don't qualify with mileage status or by flying in premium cabins) are also being assessed.

The airline has started charging US$150 ($211) for four hours' access to Dubai lounges and that has been popular.

"There's a raft of things we can do and we're testing it as we go. We don't want to remove the brand value - delivering a quality product at an affordable price - but times are changing, and people's aspirations are changing," says Clark.

"What might have been good in the business model 30 years ago might not be right now, so we have to adapt. All businesses, whether it's banking or retail, are having to change as well."