Oil Prices A Boon For Emirates As It Launches 3rd Daily Flight To Cape Town

Oil Prices A Boon For Emirates As It Launches 3rd Daily Flight To Cape Town

Cape Town is one of the most popular travel destinations in the world for Dubai-based Emirates, and the fast-growing airline plans to add a third daily flight to the top South African tourist spot, Albawaba reported.

Connectivity to Cape Town has been increasing over the past few months, according to Traveller24. Many international and African airlines have launched new direct flights there. Direct flights between Cape Town and London, Nairobi and Botswana’s Okavango Delta are all planned.

The new Emirates Cape Town flight is an addition to the two daily flights already offered between Cape Town and Dubai and it’s about meeting growing demand, the airline said.

The increased frequency underscores South Africa’s importance as a major business and tourism destination, the airline said. The code share cooperation between Emirates and South African Airways means greater access to SAA’s customers on Emirates’ global network.

Increased business activity between Africa and Asia has helped Emirates, national carrier of the United Arab Emirates, become one of the largest airlines operating in Africa, according to a report in HowWeMadeItInAfrica.

The airline serves 28 destinations on the continent, in October adding Bamako, Mali. Emirates plans eventually to fly between almost every African market and Asia.

Emirates operates four daily flights between Dubai and Johannesburg, and a daily flight between Dubai and Durban.

The Emirates Group today released its 2015-2016 profits, announcing a milestone year with profits up 50 percent compared to the previous year through expansion and strategic investments, according to Emirates247.

The group posted a $2.2 billion profit for the year ending March 31, 2016.

Oil prices a boon for Emirates

“Looking at the year ahead, we expect that the low oil prices will continue to be a double-edged sword – a boon for our operating costs, but a bane for global business and consumer confidence,” said Sheikh Ahmed bin Saeed Al Maktoum, Emirates Airline CEO. “The strong U.S. dollar against major currencies will remain a challenge, as will the looming threat of protectionism in some countries.”

Africa accounts for about 10 percent of Emirates’ global passengers and revenue, according to Hugh Frach, senior vice president of commercial operations for Emirates Europe, Africa and the Americas, in an earlier AFKInsider report.

“Many of these African markets are underserved,” Frach said during a media roundtable in Dubai. “We see developing traffic flows between almost every African market and Asia in particular.”

Emirates added 29 new aircraft during the fiscal year, bringing its total fleet count to 251 at the end of March.

The airline also opened a new dedicated airport lounge in Cape Town, according to Albawaba.

Emirates and protectionism

The extent to which African governments are willing to block competitors to protect their own airlines is astounding, said Ed Winter, former CEO of fastjet, in a 2013 How We Made It In Africa interview.

Emirates recently partnered with U.K.-based fastjet, a low-cost African airline group,  allowing passengers of the Dubai carrier to buy tickets in East and Southern Africa, AFKInsider reported:

“If you go around all the (African) countries, there are loss-making state airlines, and the protectionism being exhibited by virtually all of these governments is doing nothing other than to reduce the level of air transport, kill competition and create a situation where they are going to continue subsidizing their own state airline,” Winter said.

For Emirates, airline protectionism isn’t limited to Africa. In Germany, Emirates is limited to landing at four airports.

And protectionism isn’t the only limiting factor for growth of foreign airlines in Africa, according to How we made it in Africa.

Due to inadequate airport infrastructure, many African airports can’t accommodate the Airbus A380, the world’s largest passenger liner. Emirates has 67 in its fleet.