Emirates President On The Future Of Aviation

Filed Under: Emirates

Emirates President Tim Clark is one of the brightest guys in the airline industry. He is one of the main people behind Emirates as we know it today, because he built the airline from the ground up. I don’t think there’s a person who has a better understanding of global aviation than he does.

I could listen to Clark talk for hours. Whenever I fly Emirates (remember when flying was a thing?!) I always enjoyed listening to the “Emirates World” radio channel, and in particular the interviews with Clark. I think I’ve probably heard the same interview a dozen times.

Clark was supposed to retire in June 2020, though obviously this isn’t an ideal time to leave a company you care about. It looks like he may now stay on a bit longer to make sure the airline continues moving in the right direction.

Tim Clark turned Emirates into one of the most well known airline brands

The National published an interview with Tim Clark this week, which is worth a read. I wanted to briefly hit on just a few of the highlights that I found most insightful:

  • Had the laws of supply and demand and survival of the fittest worked, Clark believes 85% of airlines would have gone out of business
  • Clark is happy we have seen as much state aid globally as we have, because otherwise we would have seen a huge number of mergers, and “there wasn’t room for more consolidation”
  • This is a “black swan” event for the airline industry, and the impact of this is worse than the aggregate of all challenges the airline industry has faced since World War II
  • Clark believes that for the next year or two, or perhaps even longer, demand for air travel is going to be tempered; even when it recovers, he expects we’ll be looking at an industry that’s 20-30% smaller than before COVID-19
  • Clark has “written off” this summer, and doesn’t expect much of anything; he certainly doesn’t think that demand will “come back like a tsunami”
  • Clark acknowledges that “the A380 is over,” but also says that “the A350 and 787 will always have a place,” and while they might not be ordered soon, when demand does come back they will be a better fit than ever before (nothing here is a surprise, since we knew the A380 was “dead,” since production was already scheduled to end in 2021)
  • Clark’s view is that he wouldn’t be surprised if the virus disappeared completely by the end of the summer, but if it doesn’t, then a vaccine is the only way that international travel will return in any substantial way
  • He believes that by next summer we’ll have widespread vaccinations, and that things could start to return to normal at that point

Clark thinks this summer should be written off

There’s nothing terribly surprising here, but I do always enjoy hearing Clark’s perspective on things. He’s not only brilliant, but he’s also a straight shooter, unlike many other airline CEOs (“we don’t need to offer premium economy, because our economy is better than premium economy on most airlines”)…

What do you make of Clark’s perspective?

Comments
  1. I agree. I think here in the states we will have an aviation rebound more quickly because our domestic network is so vast and huge. It really is the only way to move people and goods around the country quickly. However, international is going to be next to non-existent for the foreseeable future. Airlines from smaller countries that have a robust highway and domestic train network that relies on international flying for the bulk of their airline business are going to be hurting real bad.

  2. This is far more sensible.

    I really haven’t understood any talk of the “return to normal” as if suddenly, one magical day, travel is going to just spring up overnight (or over the course of a week or two) to the same levels as previously.

    I honestly hope the pandemic has spurred some lasting changes related to hygiene in airports, on planes, and throughout the public transit sector as well. In the rush for expansions and more passengers and more seats, I have felt that this particular standard has not been able to be sufficiently maintained across the board. We see evidence of this with basic cleaning and tight turnarounds. And I am often left to wonder if basic cleaning cannot be thoroughly achieved such that visible items are left behind, how clean are things really with what we cannot see?

    I know over the years, interior cabin designs have been and are being developed for a healthier passenger and crew experience. The innovation from that perspective may prove even more lucrative now…

  3. I hope he is right and a lot of this does make sense. I’d add you’ll see the A380 being phased out very quickly over the next 18 months at airlines that have not yet announced plans to do so. If the industry will shrink 20%-30% into the new normal post COVID, the A380 has no future.

  4. Yeah, we know the A380 is dead in terms of production, but Emirates at one point said it would be “the backbone of its fleet well into the 2030s.” Question: in light of all that’s going on, when will we see not only Emirates, but everyone else, park the A380 for good?

  5. My respect for Tim Clark is as much as yours. But in the success story of Emirates there’s another gentleman who was often called “aviation legend”. Sir Maurice Flanagan who passed away shortly after his retirement. His interviews were as awesome as the ones with Clark and Shk Ahmed. So much entertaining and informative.

    But I do disagree with the following statement: “we don’t need to offer premium economy, because our economy is better than premium economy on most airlines”). No that I really don’t agree. When I fly to Dallas from Dubai it’s 16 hours flight outbound if direct. I rather pay something extra and upgrade on Premium Economy on BA and AA and the backrest is 100% better off when compared to Economy seat. I do agree, EK offers better entertainment. Free WiFi. But when flying more than 6 hours PE on most airlines makes a big difference to me. I was really looking forward to this implementation on EK but with the current uncertainty I doubt it will happen any time soon.

  6. Nassim Nicholas Taleb himself would have issues with him calling COVID 19 a “black swan” event. A global pandemic was something that’s been expected for quite a while now. Google “the big one” and you’ll see articles from doctors and health experts within the last few years…

    The airlines totally messed up when it comes to evaluating serious risks to their own industry, and they shouldn’t pretend like there hasn’t been any warning.

  7. @JN – there’s really only one person who endless talks about this explosion of pent-up demand, that the economy is going to go from 0 to 60 in about a week, and all is rosy again. Nobody trusts that person, or even takes them seriously at this point.

    Rational actors know this is going to take years.

  8. I respect Tim Clark as well and am glad he is able to stay longer even though his planned retirement is next month. I agree reopening will be gradual but I think the first 1-2 weeks of reopening will find international flights at over 60% capacity. I know a lot of friends here in the USA who have immediate family living abroad that they want to go visit them at the first moment when it’s possible.
    When Tim Clark stated the A380 is dead, that doesn’t bode well for EK given it has over 100 A380s so whoever succeeds Tim Clark will have a lot of work to do!

  9. I am just curious why he thinks it will just disappear by the end the summer. I hope he is right, but I would like to understand the reasoning. Is there another example of a virus that was this widespread (SARS was not) and just disappeared so quickly? The 1918 flu did eventually disappear, but not until after a second (bigger) wave.

  10. @Ben

    Oh my apologies. Must have read fast from the mobile. Makes sense since EK had and hopefully still has plans to implement PE. For QA to me it doesn’t matter. Since I am based in the UAE I can’t fly with them anyways. Thanks for clarifying.

  11. @Joey

    The A380 is dead in terms of future. Before it mattered but right now it’s a given fact and I guess it really doesn’t make much difference for passengers to read this statement. They will fly EK (like myself) on any aircraft as long as the price and the timetable satisfies needs.

  12. @Ben I too LOVE the Emirates World Radio especially the interviews with Tim Clark! Second best mood setter for an EK flight after the EK boarding music (which they only play on arrival now). Hopefully we hear some more even after his retirement.

    Btw, you can listen to Emirates World on the EK Website

  13. Seconded what Chris said. Talking about what travel restrictions in place would get lots of (returning) clicks!

  14. @ Chris @ Dangerous Dave — We have that, and have been trying to keep it updated daily. Click on the yellow pandemic banner at the top of every page, then look at “Coronavirus Travel Policies & Advisories”

  15. The A380 will likely die a slow (or fast) death. And the fact that it’s not a great cargo aircraft does not help,
    But in the immediate future, until a vaccine or treatment is reliably available, there’ll still be the need for social distancing. And you can fit say 100 passengers on an A380 with lots more distancing potential than on a 777. Granted that won’t be economical but airlines (essentially Emirates) could use the A380 as a selling point in this manner.

    I dont’ see the bars coming back anytime soon though.

  16. It is unfortunate that he is retiring next month 🙁 It’s truly gonna be a huuuuuge loss for Emirates. As Lucky said, he is one of the brightest guys in the aviation industry. I remember reading a book written by HH Sheikh Rashid Bin AlMaktoum that Sir Tim Clark was part of the British delegation that arrived in Dubai in the early 80s to discuss the launch of a new airline based out of DXB, following the drop out of Gulf Air from Dubai. It was Emirates which revolutionized air travel by perfecting the hub-and-spoke system. I would say, if it weren’t for him, Emirates wouldn’t be where it is today.
    All wide-body fleet, 115 A380s, and 150+ 777s. Ahh, Emirates is truly a gamechanger in the aviation industry.

  17. His comments are mostly reasonable, rational, and grounded in reality. One or two do stand out as nonsense…

    “Clark’s view is that he wouldn’t be surprised if the virus disappeared completely by the end of the summer, but if it doesn’t, then a vaccine is the only way that international travel will return in any substantial way”

    Simply “disappear” by the end of summer?! That is simply not rational in any way – it’s magical thinking one might expect from The Orange Tyrant. Are you sure he really said this? It calls into question his credibility.

    This one is simply very hopeful and optimistic:

    “He believes that by next summer we’ll have widespread vaccinations, and that things could start to return to normal at that point”

    Depends on your definition of “widespread” (and “start” and “normal”). Things will not even begin to start getting back to anything you would recognize as “normal” until most of the world (including it’s poorest, most trouble places) have good vaccination coverage, and even if we get a vaccine quickly, that’s going to take some time. Emirates may be flying to a lot of places by end of summer 2021, but things won’t look much like “normal” for a much, much longer time.

  18. I love the part where he talks about a vaccine and when it will be out and when he thinks covid will disappear. His expertise: zero. Did he ask the experts: probably, but only heard what he wanted. No one knows.

  19. With fuel prices low, A380 may have a bit of a lasting power. If social distancing on the planes is what customers demand (and willing to pay for) going forward, A380 may be the answer (if comparing it to similarly reduced load factors on other aircraft.

    If the demand gradually returns, I would hope that airlines raise fares and keep load factors below 67% (or consider it the new 100% normal). Flying should cost what it actually costs if airlines are expected to operate at an acceptable risk level to crew and passengers.

    The moment is ripe for seat and interior cabin innovation!

  20. Sir Clark may be well-respected in his industry, but he is heading a company whose business ethics I am less than impressed with.

    Emirates cancelled all my flights back in March and has yet (inspite of numerous requests) to refund the money I paid directly to Emirates. All replies from Emirates results in some version of “we’re busy”. Since Emirates’ planes are flying drastically reduced schedules, why are they “too busy” to do what all my other airlines did in a reasonable time?

    Not too busy to take my First Class payment, but apparently too busy to refund it.

  21. @Nicola

    Agree that economy from DXB – DFW is not acceptable on EK. Did that once at the end of a cruise and could not upgrade in any way to a better seat. Pure and absolute torture. Don’t understand how anyone can fly EK economy. Even the flight I had from BKK – NRT on a 380 economy was a total disaster. Seat pitch non-existent (seat in front smacked my nose).

    To like EK Y you have to be a midget or love free booze so much that you are blotto within an hour so snooze it off.

    So many dire predictions about the 380. But there is room for some of them. When fully loaded they offer more efficient seat miles per dollar than any other aircraft. So when Gatwick is basically closed and travel increases we will see slot restrictions at LHR commanding more hub-hub 380 flights than ever before. The realistic life of an aircraft these years is still north of 30 so EK will still be flying them but in reduced numbers well into the 30’s.

    Personally I still love the Queen of the Skies and if Boeing had been able to complete the upgrade the 747-8 might have been exactly the right size. I still wish the impetus was there to re-engine the 747 somehow as a fuel efficient twin. Unfortunately this would look a lot like the Max with engines too big for the gear and, perhaps, reinforcement of the engine mounts unmanageable. Dream on 😉

  22. We still upset. We have to go back our home Canada. Trivandrum to Dubai and Dubai to Toronto. Do something and took us from here.

  23. I am sure Emirates airlines will come out of this Covid situation as they have such good management and workforce and not to forget the visionary Sir Tim Clark.

  24. Yes a highly respectable aviator!! However one comment that I must disagree is the question of not considering the introduction of ‘ economy plus ‘ given I travel from Dubai to Dallas and Auckland , nonstop…. whilst appreciating all the gimmick being offered.. a better ” economy ” is called for!!

  25. It’s easy to build up a company from the ground up when you have billions of bucks, and when the airline owner is the cousin of the civil aviation authority and of the airport owner. The fact that he banked Emirates’ future on the A380 (which turned out to be a flop before Corona virus even kicked in) shows me that sir Tim Clark is not as much of a genius as he is portrayed in the article and comments.

    With oil prices dried up for the immediate future and with aviation demand (still) in the single digits I wonder if the emirs will reconsider the financing strategy of Emirates.

  26. @Mike

    I am so curious to know more about your credentials to understand how you came up to these conclusions. I live in Dubai since 2004 and beside being obviously a customer since 16 years, I know many people working for Emirates. I know about their policies, commercial strategies and ethics. Dubai is not Qatar or Abu Dhabi. Did not have back then and even less today, the capability to subsidize a multibillion dollar business. But I know people ready to pay more in order to fly with Emirates and for endless number of reasons.

    However it’s a free world and everyone deserves to have a say.

  27. @Mike

    I can’t agree with you about the A380 being a flop. It probably was and still is almost a perfect airplane for EK in the sense that they do long haul hub destinations. They also use cramped versions for moving workers in and out. Airbus rushed to be first and Boeing wisely chose not to compete in the Super Jumbo race. So for many routes the 380 is a money maker but it might have been better if a more fuel-efficient airplane plane had been adopted. But for much of EK’s route map it was certainly a successful moneymaker.

    With so few airlines adopting the 747-8 we don’t hear much about the bottom line. It didn’t have the pizazz of the 380 so for EK wasn’t an obvious choice but in the long run might have been better.

  28. There is a lot of adulation here from the fanboy club of STC, much of which I take issue with.
    STC has always been self righteous and confident in his decision making, yet fails to see the error of his ways in his stewardship of EK. The company has lost direction in recent years, relying on thin margins and low operating costs to generate modest profits in lucrative times. The full year results published just yesterday show just a 1.6% profit margin on revenue of AED 104bn. It always was a risk to defy rational wisdom and order a fleet of behemoth aircraft, which left the airline exposed to any downturns and unable to reduce capacity quickly on thinner routes. Agreed Covid-19 is a black swan event, but even prior to the virus, there were signs that at least a slowdown was probable, yet EK failed to position itself.

    His statement that the A380 era is over and the way forward is contrary to what he was quoted just a few months ago in November. He criticises BA for not ordering ‘hundreds’ of A380, and admonishes Airbus for cancelling the program.

    I agree the world has massively changed, but STC has left EK with an unnecessary exposure to the retraction in demand, and lacked foresight. Furthermore his two lieutenants groomed to take over, Christoph Mueller, and Thierry Antinori, both left in the past couple of years so the management of change is in limbo.

    One thing that I am very much in agreement with is the post by Nicola, reference Sir Maurice Flanagan. He was amazing to work with, and the true pioneer for Emirates. I have the utmost respect for him.

  29. I believe that someone should mention that they fired more than 100 pregnant crew ,leaving them with no medical insurance in the middle of their pregnancy(!) For sure COVID-19 has had a huge impact on aviation but a company never lets go pregnant ladies, I wonder whether these 100 redundant pregnant crew made any difference financially to the company now that they stayed without medical insurance and no job? Maybe it would have been better not to lay off people in need next time.

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