By Stephen Dabkowski and Rod Myer
DUBAI-based airline Emirates has asked the Federal Government for the right to double flights in and out of Australia from 42 to 84 as part of a plan to continue the airline's aggressive growth.
That number of flights would mean the airline would have to run three flights a day out of Melbourne, Sydney, Perth and Brisbane. If the Federal Government and international airline regulators approve the plan, Qantas' lucrative position on the Australia-Britain route would come under severe pressure.
Emirates president Tim Clark, in Australia for the Melbourne Cup, said the airline had asked for permission to expand its Australian operations.
"Australia is a very strong market for us," he said. "In fact, in terms of income generation Australia is now No. 3 in the world for Emirates, which is quite amazing given that many other foreign carriers have backed away from the market."
Emirates' request for further access to the Australian market comes at a sensitive time. The Government is expected soon to release its review of international airline regulation, which could result in protection for Australian airlines being wound back.
Mr Clark said he believed the review was likely to result in greater competition as more foreign airlines would be given landing rights in Australia.
He said Emirates' attempt to boost its Australian access did not mean the airline would try to muscle in on the Australia-to-Los Angeles route, believed to be Qantas' single most important revenue earner, providing 18 per cent of its profit. Singapore Airlines is trying to lever that route open.
"The trans-Pacific route doesn't suit our strategy just yet," Mr Clark said. "Contrary to reports, we have not asked for access to that route."
He said the jump in crude oil prices would add between $US350 million ($A470 million) and $US400 million to Emirates' costs this year, but despite that impost, the company's half-year results, to be released in mid-November, would be an improvement on the the $US350 million profit for the corresponding period.
He said increased profit growth had been achieved by cutting costs in other areas of the airline as well as revenue growth exceeding expectations.
Emirates' profits are a sore point in the airline industry, with Qantas and several analysts saying the company is subsidised by its parents, the Government of the United Arab Emirates and Dubai's royal family. BBY airline analyst John Veldhuizen said Emirates was "considered to be subsidised" and its aggressive growth plans could harm Qantas. However, "Qantas has dealt with Emirates' competition very well in the past", he said.
Yet another reason to trim the "fat" at the rat! 