Emirates mulls cheaper long-haul flights as discount rivals grow

Emirates, known for luxurious planes with showers and bars, is considering adding cheaper long-distance flights in order to better fend off aggressive competition from low-cost carriers. “More and more international network carriers will be starting to move into the long-haul, low-cost market,” Emirates president Tim Clark said. “That will be the shape of things to come.” Traditional airlines such as Lufthansa and Air France-KLM are trying to expand their low-cost offerings as discount carriers including Norwegian Air Shuttle ASA and Singapore’s Scoot push into the sector’s most lucrative segment. The rivalry is burdening network carriers such as Emirates at a time when terrorism, the economic slowdown in the Middle East and the UK’s planned exit from the EU are already depressing travel and reducing fares. Emirates, which has exploited its Persian Gulf location to turn its Dubai hub into an inter-continental crossroads, has had a particularly rough year. Low energy prices have sapped demand for lucrative premium bookings from executives in the oil and gas industry, while terrorist attacks in Europe have scared off travelers from Asia. Profit at the airline’s parent company Emirates Group plunged 64% in the first half to 1.3b dirhams, the company said last week. Airlines are operating in a world “fraught with volatility,” Clark said. The difficult conditions are especially troublesome for Emirates, the world’s largest international carrier, because it has ordered $112b of aircraft that it will somehow have to fill at a profit. The outlook for fares and passenger demand for the rest of this year “looks fairly flat, but we’ll continue to grow our business because we have planes coming,” Clark said. “Full-service network legacy carriers will have to adjust their businesses for what will be a fierce segment.”<br/>