Issue 6 | March 2010

The Dubai issue

The past year’s press on Dubai has not been kind; and the city has, and is dealing with its share of big financial and future challenges. However this issue of Open Sky seeks to question and correct a fundamental premise we believe is wrong in the debate on Dubai of late; namely the attempt by some commentators and media to emphatically write-off an entire city. Putting aside the recent problems faced by Dubai’s real estate and construction sectors, which have not been insignificant, consider for a moment the airline and aviation industries. Last year was - by global standards - a relative boom at Dubai (DXB); if anything 2010 is showing a further significant surge in aviation activity for both and our hub. Much of this growth is being driven by the commercial success and continuing growth of Emirates, which remained profitable even during the worst of the recession and will soon report strong 2009-10 financial results. In addition to the home carrier, more than 130 scheduled commercial airlines now fly to DXB under an open skies policy; more than almost any other international airport worldwide. In recent months new carriers have arrived and they are as diverse as China Eastern and Kingfisher. DXB’s passenger traffic has increased by a yearly average of 10% since 1980, rising from three million people then, to more than 40 million last year; with cargo growing by 14% a year. By 2030, Dubai Airports forecasts passenger traffic at its facilities will reach 150 million, along with seven million tonnes of cargo and yearly aircraft movements of 750,000. These numbers mirror our own forecasts. Simply put, Dubai is an ultra- competitive aviation honey pot with a big future in our region and as a global-hub in a geographical sweet spot. Some competitors argue DXB is an artificial desert hub (see Open Sky issues 2 and 4), yet the airlines of the world - including most Star Alliance • More than 130 carriers fly to DXB compared to 125 at Frankfurt, 121 at carriers - keep on coming; and Emirates welcomes the competition. Charles de Gaulle, 105 at Amsterdam, 97 at Heathrow and 86 at Madrid. Consider these key trends: • Dubai is less than 12 hours from 80% of world’s population and four hours from one third of world’s population. • DXB managed 40.9 million passengers in 2009, up 10% over 2008. • DXB is the fifth busiest airport for international freight volumes. • DXB is now the sixth busiest airport worldwide in terms of international passenger traffic. • Dubai Airports anticipate traffic to approach 100 million by 2019. • DXB is predicted to have 46 million passengers by 2010/11, making it Despite the recession and new challenges in 2010, Emirates is seeing a the third busiest international airport in the world (behind Heathrow and strong demand pick-up in all three of our cabins and belly-holds. Last Charles de Gaulle), overtaking Frankfurt, Hong Kong and Amsterdam. year presented enormous difficulties to all airlines, but our business fundamentals did not change, even if yields and profitability did. This • Most airports reported negative growth in 2009. Apart from DXB, only a confidence in our strategic plan is what drives and solidifies decisions to few others like Istanbul, Beijing and Kuala Lumpur reported increases. commit multi-billion dollar investments in aircraft like the A380 and A350.

Dubai economic milestones during 2010

1. Dubai hotel visitors will cross the 10 million mark in 2010, in a city of 185 different nationalities. 2. Every two minutes, 23 containers will be off-loaded at Dubai’s ports. 3. As of 2010, one in three Fortune 500 companies will base their regional offices in Dubai and The Economist rated Dubai as the most ‘Competitive Arab Economy’. 4. Dubai Internet and Media Cities today house more than 6,000 internet and communications companies. 5. In 2000, cruise liner passengers visiting Dubai totalled 6,900; in 2010 there will be 325,000. 6. In 1985 oil contributed half of Dubai’s GDP, in 2010 it will be just 5%. 7. Trade and logistics along with financial services will make up two thirds of Dubai’s economy between 2010 and 2015. 8. Dubai Mall will draw in over 40 million visitors in 2010, more than 750,000 every week. 10. The 18 stations of the Red Line of the Dubai Metro will open by the end 9. In January 2010 Bloomingdale’s opened its first ever store outside of the of 2010 and the Metro will transport 1.2 million passengers over 72 km US in Dubai and the world’s first Armani Hotel will open in Burj Khalifa. of track via 42 stations. 1 Other views on Dubai

‘’Dubai’s key advantage - its superior infrastructure - will stand it in good ‘’Yet for all the dismay among investors at the decision to call a standstill on stead during the recovery. The crisis has hurt Dubai’s aspirations, but the Dubai World’s debts, foreign businessmen and analysts are being careful governance and transparency efforts undertaken to restore its reputation not to write off Dubai’s role as the region’s premier service hub. Although may make this plan more realistic over the medium term.’’ - Moody’s nearby cities including Abu Dhabi itself and Qatar’s Doha have been trying Investors Service to catch up and establish themselves as regional centres, even a smaller, more sober Dubai will have two main advantages: a more liberal culture “We have been in Dubai since 1946. In fact, we were the first bank to do and a well-developed international transport infrastructure. The Jebel Ali business there. Dubai will retain its status as a regional financial center.” free trade zone by itself accounts for as much as one-quarter of Dubai’s - Stephen Green, Chairman HSBC Holdings economy.’’ - Financial Times “Dubai shows that if you are part of the global economy, you do well; you ‘’To think that Dubai has sustained its growth and continued to be a magnet don’t have to have oil.” - David Aaron, Director of the RAND Center for for capital from around the world, with virtually no underlying collateral Public Policy to offer as guarantee other than the multiplier effect of money generating “Don’t count Dubai out… It has world-class infrastructure, a high-quality more money, is an astounding story in itself… I expect Dubai to soon be talent pool, and will continue to be an important financial center for back in the global race for human and financial capital. No other city can decades to come... Dubai has the opportunity to learn lessons... and thrive” claim what Dubai does: built on nothing but sand and human imagination.’’ - Carlyle co-founder, David Rubenstein - George Abraham, The Ottawa Citizen ¬

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Emirates is currently seeking qualified candidates to apply for inter-carrier cooperation, which allow the operation and the expansion the following positions in our Public, International, Industry and of our route network. The successful candidate will be required to Environment Affairs team, based in Dubai. manage geographically focused government, political and bilateral projects. Skills required include negotiations and advocacy and technical knowledge of air services and code share agreements. Attention to Manager, Public Affairs detail, team work and an outcome focus are essential. This role is to initiate, implement and manage public affairs, policy and Ref - MIA&A/MS/14262 government relations activities and campaigns which support Emirates key political, policy and stakeholder relationships and regulatory needs, as well as current and future aeropolitical and commercial aspirations. Senior Analyst The role has a geographic focus and requires strong communication The role is to provide statistical and data input on public affairs, skills such as advocacy, speech writing and message development, as aeropolitical and environmental matters by preparing comprehensive well as international political awareness. Creativity, an outcome focus analysis, negotiating options, business cases, reports, campaign and proactiveness are essential. proposals, policy documents and official responses. The successful Ref - M/MS/14264 candidate will have solid experience in advanced econometrics, data modeling, research and statistical analysis. Attention to detail, creativity Manager, International Affairs and the ability to explain complex issues in simple terms are essential. The role is to obtain, protect and enlarge the aeropolitical rights for Candidates interested in any of the above positions should apply via Emirates through inter-government bilateral air services agreements and this link.

2 The end of the airport curfew? Open Sky: they said it best… Each issue Open Sky brings you the best quotes from our perspective on liberalisation, alliances, aeropolitical protection, free and fair trade, economic policy and global business.

“The US Department of Justice, who are the experts in competition issues, called for strict remedies to protect the public interest, because the alliance will blatantly harm competition and the consumer…The Department of Transportation has chosen to stick two fingers up at them… this draft decision is a real kick in the teeth for consumers and they will be paying the price for it for years to come.’’ - Sir Richard Branson on the Department of Transportation’s recent draft decision on AA-BA. “Passenger numbers dropped in all traffic regions with the exception of the MiddleEast/Africa.” - Lufthansa Group commenting on its late 2009 results. ‘’The ‘virtual airline’ has not yet come to pass, but the virtually-useless alliance is closer than some airline managers would like to admit.’’ - Amongst all the ear-splitting debate on aviation and the environment in the Wall Street Journal in a piece about the future of airline alliances. last year, the one issue that barely raised a whisper was aircraft noise. ‘’The third driver creating over-capacity in some markets is Three decades ago, aircraft noise around city airports was the only audible government policies. Many airlines are pressurised by their environmental debate. Airport protests were common, governments paid governments to expand services and widen networks in support of for expensive double glazing of windows in affected homes, and the media national policies to develop incoming tourism or local business. Such covered the topic endlessly in London, New York, Hong Kong, Sydney, airlines tend to order or operate many more aircraft than required Tokyo and Zurich. in the markets they are serving. The most recent and vivid example of this is that of the Gulf airlines, of Abu Dhabi and For many policy makers, the airport curfew was the solution. From , which have been tasked by their governments to 11pm to 6am, dozens of the world’s airports were closed for business. match the worldwide network and success of their neighbouring The economic price was high; closing even one major airport at night carrier, Emirates. For these carriers profitability is seen as a long-term greatly affected others. A 10pm to 7am curfew in New York imposes an objective, not a short-term requirement.’’ - Professor Doganis as unintentional 2.30pm to 10.30pm curfew on takeoffs from Los Angeles to contained in the recent edition of his book Flying Off Course. New York. The ripple effect of airport curfews continues to impact flight scheduling across the world. ‘‘High Speed Rail will generate demand for Heathrow and serving Heathrow will generate demand for HSR. However policymakers must With the advent of modern, quieter aircraft, compliant with the latest Stage realise that HSR will place increased pressure on an airport operating 4 noise standards, Emirates believes that the era of blanket airport curfews close to maximum capacity.’’ - Bow Group from its report ‘The Right is drawing to a close. The economic and social benefits of tailored curfews, Track - Delivering the Conservatives’ Vision for HSR’. which reward the operators of modern, quiet aircraft, would greatly outweigh the technically redundant restrictions of blanket bans. In a 2008 study, Air Services (ASA) independently reviewed the noise impacts of the new A380 over six months at 16 locations, in The perils of creeping protectionism and around curfew-restricted Sydney, and compared these against the B747-400. The study showed that the A380 produces less than half the noise of the B747. The A380 was between 2.3 and 6.7 decibels quieter than the 747-400 on take-off (on the logarithmic decibel scale, a three-decibel reduction is equivalent to halving the noise level). The A380 is not the only quiet achiever. We will soon see the arrival of ’s 787 Dreamliner and Airbus’ A350-XWB, with further noise reductions. And it’s not just manufacturing technology driving down noise. Operationally, commercial aircraft can be flown in ways never dreamed of To its detriment, commercial aviation has a history of defying the gravity in the sixties and seventies. Steeper descents and departures keep height of sound global trade policy. Government officials declare it to be a ‘special from housing at a maximum, while modern navigation systems and ground case’ and rationalise that it therefore should be exempt from the same wise GPS allow for aircraft movements away from affected communities. policy principles readily applied to other sectors. In the face of historic global economic challenges over the past 18 months, politicians sensibly Toronto Pearson airport cleverly allows quieter aircraft to land before 7am sounded a clarion call to embrace open markets and resist the temptation while disallowing older, noisier aircraft. New aircraft need to be rewarded of protectionism. with landing slots outside of existing curfews in airports in Sydney, London, Tokyo, Zurich and Frankfurt. Why shouldn’t a new, quiet 500-seat Brazilian President Luiz Inácio Lula da Silva (left) warned “…protectionism A380 be rewarded versus an ageing Ilyushin-76 freighter or a 727 cargo can seem beneficial at first ...but in the long term, it wounds countries.” operation? Lord Mandelson, former EU Trade Commissioner and current UK Secretary The economic benefits would be significant. The travelling public wins of State for Business, Innovation & Skills (middle), echoed this warning: thanks to greater schedule flexibility and choice. Airlines win by not having “Economic openness is the engine that will power the global economy in to cancel flights that miss curfews due to weather or operational delays. the upturn. Protectionism may appear to treat the symptoms of economic And airport communities will still experience a net reduction in noise, with downturn, but it is also the poison that prevents a full and fast recovery.” older, noisier aircraft relegated to day-time landing slots. Ambassador Ron Kirk, the US Trade Representative (right), added “…now Now is the time for governments to incentivise airlines who invest in is not the time to turn inward. Now is not the time to be timid. Now is the modern, low noise aircraft through special curfew exemptions for outside time to revive global trade, and to lay the groundwork for an even more slot landings and take offs. Will London, Sydney or Tokyo be first? robust, more open trading system in future decades.” 3 A world first for Wolgan Valley Within three months of its opening in October 2009, the new Emirates Energy, to ensure 35% of the resort’s power comes from renewable energy Wolgan Valley Resort and Spa in Australia received carbon neutral sources. Wolgan Valley is also dedicated to sourcing regional food and certification from leading New Zealand-based accreditation organisation, supplies from within a 100 mile radius, which further reduces emissions carboNZero. In doing so, Australia’s first conservation-based luxury associated with the transportation of these materials – as well as boosting resort also became the first hotel in the world to achieve carbon the local economy. neutral certification from an internationally accredited greenhouse gas certification scheme. carboNZero certification indicates that the greenhouse gas emissions associated with Wolgan Valley’s operations have been independently measured and verified in accordance with international standards. It also recognises the resort’s commitment to continuously manage and reduce its emissions and neutralise unavoidable emissions through the purchase of a small quantity of verified carbon credits. The certification of the A$125 million resort was made possible through a combination of initiatives, including large-scale environmental rehabilitation programmes, removal of cattle from the property, and protection of existing remnant vegetation areas. To date, over 175,000 indigenous trees have been planted in wildlife corridors and along creek banks on site. The overall footprint of the resort was already relatively low, due to the application of green building principles in its design and construction, including the use of solar power and heat recovery. The resort contracted its electricity supplier, Origin

COP15 - still all to play for After a year of long anticipation, the recent COP15 talks came and went in a The ball is now squarely in ICAO’s court, and those of its member states. flurry of snow and tear gas - with most parties involved being disappointed Emirates continues to support a global, sectoral system for managing by the outcome. As one commentator wryly noted: ‘the aviation industry got aviation emissions - a system prepared and administered by ICAO, which nothing out of Copenhagen - nothing it wanted, and nothing it didn’t want’. would involve fair and achievable emission reductions targets for the Despite intense lobbying by the aviation industry, ably represented by whole industry. The objective would be a system where aviation pays for IATA, ATAG and ICAO, there was not a single mention of aviation in the final its emissions once only, and where these funds are put back into aviation Copenhagen Accord. Some may see this as a victory, but the continuing efficiency research and climate change mitigation. 2010 will be the year uncertainty plays into the hands of those wanting to further tax aviation where ICAO has a final chance to come up with an industry solution, emissions with a patchwork of double- and triple-dip taxes and levies. before one is foisted on us by the UNFCCC.

EU ETS - see you in court As foretold in Copenhagen by IATA’s CEO, Giovanni Bisignani, the US Air concerned. The EU Member States and other European countries Transport Association (ATA) and three US airlines (American, Continental expressed a formal reservation on the clause, indicating that they do not and United), lodged a joint action in December 2009 against the UK consider themselves bound by it. Department for Energy and Climate Change (DECC), challenging the legality of including non-European airlines in the EU ETS. The basis of the Despite most international law experts doubting the success of the action, challenge questions the right of the EU (and its Member States) to legislate Bisignani went on to say that he expects many governments to legally against carriers from other states, which is contrary to the terms of the challenge the unilateral approach of the EU ETS in the coming years – with 1947 Chicago Convention – the legal heart of modern commercial aviation. further challenges from the US, Japan, China and others. He maintains that aviation’s inclusion in the EU ETS “will not happen” in 2012, and that In a 2007 ICAO resolution on emissions trading schemes, the US fought the European Commission knows “exactly” that aviation’s inclusion in its hard for the inclusion of a clause that ensures states may only implement ETS is “simply illegal”, and in contravention of the Chicago Convention. such schemes on the basis of a mutual agreement between the states The UK DECC has vowed to defend the US ATA challenge vigorously.

Emirates Friendship Hospital, which is sponsored by the Emirates Airline Foundation (a non profit charity organisation formed by the Emirates Group), docked at Tungipara in the Gopalgonj district of Bangladesh, where in the month of December 2009 alone it treated almost 6,000 adults and children. 4 Greater competition...’a good thing’

Coincidentally, in an interview earlier in the month, Transport Minister John Baird stated that “If we can get more carriers flying into Canada, we hope it’ll bring more tourists and have greater competition through reduced prices in the long run … So that’s a good thing.” Emirates agrees and hopes that the Minister uses the study to override the calls for protectionism from Air Canada and their Pilot’s Union.

Air Canada’s response Air Canada’s contribution post the release of the report was to misread its contents and to suggest publically that Emirates had experienced low load factors on its flights between Dubai and Toronto. In fact, Emirates capacity on the route in 2008 flying a B777-300ER was 111,564 seats, of which 99,288 were filled - a load factor of 89%. Emirates recently released an economic impact study that showed the In 2009, flying the same Boeing aircraft until 1 June and then the A380 real price to Canada’s tourism sector, business, airports and governments for the rest of the year, 134,736 seats were offered, of which 122,870 were of Transport Canada’s current protectionist aviation policy. The study, filled - a load factor of 91%. conducted by InterVISTAS - the independent transport and tourism consultancy - found that if Emirates increased to a double daily service to Toronto and added daily flights to Vancouver and Calgary, it would generate C$480 million of economic benefits and over 2,800 jobs for Canada: • 274,927 new passengers travelling through Toronto, Calgary and Vancouver airports annually. • C$115.4 million in new economic activity at airports in Toronto, Calgary and Vancouver annually. • C$82.6 million in new tourism spending annually. • An additional C$246 million in new spin-off economic activity annually. • C$38.1 million in new tax revenue annually. The study also highlighted the creation of an additional 27,000 tons of cargo export capacity for Canadian goods between Canada, Dubai and points beyond. Currently, demand for cargo space for Canadian goods on Emirates flights exceeds capacity, with space routinely sold out months in advance. The study was released in Vancouver during the Olympics, where British Columbia Premier Gordon Campbell said: “This study identifies a great economic opportunity and highlights the need for more progress on Lufthansa’s Canadian website this month reveals that it is not shy of Open Skies agreements to remove barriers to international tourism and promoting its flights over Germany to India, Dubai and the Middle commerce”...“As a province and a country, we need to capitalize on East & Africa - despite it and Air Canada’s repeated arguments services like those offered by Emirates Airline to realise our full economic about the dangers of sixth freedom carriage, when it applies to potential.” Premier Campbell was represented at the event by British other carriers. Columbia Transportation Minister Shirley Bond (right in picture above).

Ottawa defends Canada’s protectionist skies, Don Martin, January 2010 The world’s largest passenger jet, a two-story Airbus 380 behemoth, from western premiers, mayors, MPs from all parties, Toronto business lands at Toronto three times a week packed with wealthy Arab tourists interests and tourism officials to boost gravity-defying links to the Middle and energy-based business executives. The pride of the Emirates Airline East. fleet routinely fills more than 90% of its 489 seats to and from Dubai… For 11 years now, Emirates has been screaming protest at a full throttle …The best Transport Canada can come up with to explain its reluctance roar, demanding permission to bring daily flights to Toronto, Calgary and to approve daily service - and it took its spokesperson two days to find Vancouver only to be told by Transport Canada there’s no demand for her speaking notes - is “there is no shortage of seats to meet the demand”. increased service. That’s code for Air Canada protectionism, even though the airline doesn’t fly to Dubai. It does, however, have partner links to Dubai through London …This would be a bizarre one-off aviation anomaly if not for the fact that or Frankfurt. Transport Canada’s market interventions have already driven two global giants to depart Canadian runways. Both Airlines and Air France Giving Air Canada special protection “is anathema to any logical business pulled out of Vancouver last year after the feds denied them daily flight thinking and highly anti-consumer,” argues the Consumers’ Association of access, relocating to Seattle along with hundreds of jobs and the business Canada. For a pro-business, free-enterprise Conservative government to benefits of non-stop links to south Asia and . What’s doubly bizarre obstruct its commitment to open skies, a policy renamed to fit with party is how wide and deep the support is for this particular airline’s service to colours as a Blue Skies policy, is unconscionable in a world where keeping expand. Transport Minister John Baird has been bombarded with pleas our businesses globally linked and competitive is a key to the recovery.

5 Extracts from Speech by Tim Clark to the UK Airport Operators Association annual dinner on 2 March 2010 Our most pressing need is to persuade whichever party forms Government half of our daily frequencies to the UK are to cities outside London. UK this summer to pursue policies that enable the economic benefits of regional airports are catalysts for economic and social development in aviation to be fully realized. This deep and serious recession has reminded their local cities and surrounding regions, particularly when long-haul all of us that jobs are precious, investment hard to come by, sales never services are secured. Through our growth of operations to Manchester, easy and international mobility crucial. Birmingham, Glasgow and Newcastle, we see these markets can support, and that their economies are supercharged, by long-haul services. Such success, in combination with positive change at Heathrow and Gatwick, The fact remains that any serious international carrier wants to serve says we can be more optimistic. Heathrow, given its global status. It was no accident that Emirates’ first route for the A380 was Heathrow in December 2008. We plan to add a second A380 to Heathrow, meaning two of our five flights a day will be on the superjumbo. Emirates is encouraged by and intends to take advantage of the proposed ‘green slot’ principle for the new runway as outlined by the Government in 2009. This incentive is good policy and we applaud the bias shown to fuel, emission and noise efficient aircraft.

Heathrow is one of Emirates most important airports and we support its expansion and the third runway, but the lack of infrastructure investment has meant in 20 years Heathrow has fallen from first in to fifth in terms of destinations served. Without a serious re-assessment of the importance of a fully functional Heathrow to UK Plc, there is a real risk we cross a tipping point in operational integrity.

We recently submitted a detailed proposal to the UK CAA outlining what we call an EcoApproach for the most modern QC2 compliant aircraft types arriving into Heathrow. This would considerably enhance its capacity, Aviation’s rare gift is the ability to not just reflect existing economic and but not at the cost of higher noise, emissions or tarmac laying. It covers tourism connections between regions; but to grow them with a significant approach and landing and is similar to the solution adopted to improve multiplier effect. So let’s not forget this or allow others to ignore it, noise reduction on departures to allow for a smarter curfew operation. particularly in this, the most important year in the great British democratic cycle. Volatility and disequilibrium dominate the global economy, skewing the data upon which decisions for long term, capital intensive projects For our part, Emirates injects well over £260 million each year into UK local depend. With the UK’s national debt as colossal as it is, appetite for huge airport economies and has a total fleet related UK gross capital spend of undertaking I accept, is not there at the moment. But ladies and gentlemen, £15.4 billion. We have been serving the UK regions for almost 20 years – in the industry’s return to equilibrium is not as far off as some people believe, fact we started serving Manchester before Heathrow – and today almost and our industry will emerge stronger, leaner and more fit for purpose. Growing the tourism pie - a German perspective

Do foreign carriers just redistribute existing passenger traffic within a Overnight stays Overnight stays Population market, with an insignificant increase in visitors? Data from the German 2008 forecast 2015 in millions Federal Statistical Office on inbound tourist numbers to Germany seems to Total 6,039,837 7,700,000 5,018.2 put to rest this redistribution vs. overall market growth argument. Japan 1,130,328 1,200,000 127.9 Total international visitors to Germany have nearly doubled over the last 15 China/Hong Kong 942,988 2,000,000 1,343.6 years - a significant increase in the size of the overall pie. India 421,514 750,000 1,186.2 Arabian Gulf States 776,550 1,600,000 33.5 Overseas visitor arrival growth into Germany: indexed 1994–2008 Asia 4,979,828 6,700,000 3,998.7 Africa 463,399 400,000 985.7 Australia, New Zealand 569,610 600,000 33.8 and The growth rate varies considerably by market. Tourists from Africa, the Americas and Asia grew below the average growth rate, whereas those from Australia/Oceania and Europe grew in line with the average. One market’s growth rate stands out over the past 15 years - tourists from the Arabian Gulf States, where numbers quadrupled. While Emirates is only one of many carriers to expand its services to Germany - from just two weekly flights to Frankfurt in 1987, to today’s 49 weekly flights to four cities in Germany - we are confident that our flights were responsible for a good chunk of this growth. Even the Lufthansa sponsored ‘Initiative Air Transport’ from summer 2009, confirmed that Emirates most recent additional flights to Düsseldorf resulted in a bigger overall passenger market for all carriers from Germany. The German National Tourist Board expects that the number of tourists from the Arabian Gulf States will grow further, forecasting they will spend Growth in overseas visitor arrivals into Germany, indexed at 1994 levels. 1.6 million overnight stays in Germany in 2015 - almost as much as Japan Source: German Federal Statistical Office. and India combined. 6 7 Kangaroo logic

Alliances, joint services and revenue sharing agreements all add up to Passenger market shares between London Heathrow and Australia less competition and reduced consumer choice. Yet in its February 2010 - All classes statement approving a five year extension to the - Joint Services Agreement (JSA) on the Kangaroo Route, Australia’s competition regulator said that: “The increasing competition from other carriers means the JSA is unlikely to result in any substantial lessening of competition in the relevant markets”. It is important to note that British Airways downgraded and exited Brisbane, Melbourne and Perth markets following the commencement of the JSA and this followed the trend of European carriers stopping services to Australia in lieu of their Star and SkyTeam alliance partners. On the same day the ACCC issued its above approval, British Airways announced it was reducing services to Sydney - despite reporting loads of Source: MIDT 2009 86% in the most recent Bureau of Infrastructure, Transport and Regional Economics (BITRE) data. The renewal of the JSA secures significant revenue streams for Qantas-British Airways, but more importantly cements The Emirates-Australia partnership continues to deliver on oneworld’s position on the route (see pie chart). employment, investment, tourism and trade - and was further British Airways and Qantas cited competition from Emirates among others strengthened during recent UAE-Australia talks in Canberra. Existing as a main reason for requiring the JSA to be renewed, even though the arrangements allow Emirates an extra seven weekly services from numbers simply do not stack up. March 2010 and a further seven from March next year were confirmed. Commenting prior to the talks, the Hon Anna Bligh MP Premier On the route between Australia and London Heathrow, Emirates has 8% of Queensland said “My Government appreciates the long-term and 9% of Economy and First/Business bookings respectively, compared commitment Emirates has shown to Queensland and Australian airline to the combined share of 35% and 43% for Qantas and British Airways. In and tourism industries. Certainly, we are living in difficult economic the view of Emirates, regulators must look more deeply at issues of market times and it is important the aviation sector is innovative in its response concentration and the overall influence of alliances on consumer choice to emerging challenges.” and competition on key routes.

Fast facts • Aircraft in fleet 145 • Longest flight Dubai - Los Angeles (16 hours 25 minutes) • Number of destinations (passenger and cargo) 102 • Shortest flight Muscat - Dubai (1 hour) • Passengers (2009) 25.9 million • First flight 25 October 1985 • Seat factor (2009) 76.2% • Employees (Airline) 28,791 • Cargo (2009) 1.47 million tonnes • Nationalities in workforce 154 • Weekly departures from Dubai International Airport 1,196 • Financials 08/09 (Airline) Revenue US$12 billion, Net profit US$268 million • New 2010 routes Amsterdam, Dakar • A380 routes Auckland, , Jeddah, London Heathrow, Madrid, Prague, Tokyo Toronto, Paris, Seoul and Sydney

Gothenburg Glasgow Moscow Newcastle Hamburg Manchester Birmingham Amsterdam London Dusseldorf Frankfurt Prague Paris Munich Zurich Vienna Milan Venice Toronto Nice Tehran Zaragoza Rome Istanbul Toledo New York Madrid Beijing Beirut Damascus San Francisco Tunis Seoul Tokyo Amman Malta Larnaca Kabul Peshawar Los Angeles Casablanca Islamabad Osaka Tripoli Lahore Shanghai Cairo Houston Dubai Dammam Dubai Taipei Dhaka Ahmedabad Guangzhou Riyadh Hong Kong Doha Muscat Mumbai Jeddah Hyderabad Dakar Khartoum Manila Bangaluru Chennai Bangkok Kozhikode Addis Ababa Kochi Thiruvananthapuram Sana’a Abidjan Lagos Colombo Accra Malé Kuala Lumpur Entebbe Eldoret Singapore

Nairobi ©2010 Emirates. All rights reserved. January 2010 Jakarta Dar es Salaam Seychelles Luanda Lilongwe Route Map Mauritius March 2010

São Paulo Johannesburg Brisbane Durban Perth Cape Town Sydney Auckland Melbourne

Christchurch Graphic illustration only, not a complete representation or to scale. © 2010. Emirates. All rights reserved. not a complete representation Graphic illustration only, ©2010. Emirates. All rights reserved. ©2010. Emirates.

Andrew J Parker - Senior Vice President Public, International, Industry & Environment Affairs Will Löfberg - Manager Public Affairs Email: [email protected] Email: [email protected] or [email protected] 8