Seat belts fastened
Saturday 16 July 2011 7:00
Laurie Berryman
Brian Nicholls talks to Laurie Berryman, Emirates UK vice-president, about why flourishing links with the Gulf could blossom into something much bigger.
We can be sure of one thing in these otherwise uncertain business times. North East air links abroad – the route to export opportunities – are going to get a huge boost. Emirates airline is reconsidering its previously deferred plan to replace, with a much larger Boeing 777 aircraft, its Airbus A330 that flies North East passengers daily to the Middle East and onward to many other parts of the world where business is to be found. Flights between Newcastle and Dubai then, if the change goes ahead, would each seat 428 passengers instead of 278. Emirates’ decision to revisit its North East potential follows an 8% increase in passenger growth at Newcastle during the past year to March 31.
At the same time, the Dubai airline – recently named Airline of the Year – is intensifying searches for an acceptable alternative to the British Government’s controversial air passenger duty (APD), whose blanket application is hurting not only Newcastle and Durham Tees Valley airports, and many more regional airports besides, but also North East businesses that are trying to boost sales by exporting in a period when currency exchange rates favour it.
Since the daily Emirates service to Dubai began in 2007, trade between the North East and Australasia alone has trebled from £100m to £300m, for which the airline is widely credited.
The passenger tax therefore, in government revenue terms, is self-defeating.
Asked by BQ in exclusive interview about the likelihood of a stepped up North East service in light of the airline’s recently announced soaring profit throughout, Laurie Berryman, vice-president for UK and Ireland, revealed that Emirates is now taking delivery of 52 more of the largeraircraft, one of which would probably be assigned to the North East.
“I personally believe, without knowing anything for real, that the prospect of a 777 may be nearer now for the North East,” he says. “When recession hit, we delayed bringing in new aircraft. But that deferment has now ended.
“For the next two years, between May 2011 and March 2013 we are taking delivery of 52 more aeroplanes. I am sure one of those new 777s will find its way to Newcastle. It’s certainly on our wish list.
“Our last financial year showed Newcastle growing by 8%. That may sound constrained, but the load factor was so good there wasn’tmuch space to grow into. In cargo too we carried another 300,000 kilos. So Newcastle went on growing at a good rate – a record year for load factors. This contributed, along with all the other routes, to make a fantastic profit for the airline.” It’s good news too for Newcastle Airport during a period when another regional airport, Plymouth, has announced its closure. Emirates, with an additional four million passengers worldwide, actually equalled British Airways in size before the latter recently merged with Iberia. In a 23rd consecutive year of profit, Emirates’ overall passenger rise of 14.5% to 31.4 million did much to hoist revenues 26.4% to $15.6bn.
This, in turn, hoisted gains 52% to a record $1.5bn (£900m). Berryman recalls: “We started the Newcastle route just as the global recession began in September 2007. Within a week, Northern Rock hit its first problems. So we had a fairly tough time early on.
“But I knew when we looked at the route back in 2006 that it would be a success. All the logistics pointed to a population in the North East of England who were being restricted as to where they could fly, long haul.
“They always had to go somewhere else, Amsterdam, Heathrow or somewhere likethat to get to many places. I felt we could tap into that and the proof now is exactly that. The new financial year has also started very strongly throughout for the airline. In April we showed growth of 36% and 82% load factor over the same month a year ago. We did have the dust clouds then. But it is still very good indeed.” And while many North East passengers are disembarking in the Middle East for business or pleasure, many are also going on from there to Australia, Thailand, Malaysia, New Zealand, South Africa and Mauritius. Berryman says the daily increase of passengers would represent “a pretty big increase” over a year.
“Our only problem is that we have so many routes around the world competing for the new 777s that we shall have to wait in line. But it does sound promising for Newcastle.” Emirates’ over-all progress shows 105 flights a week to Dubai from the UK now – from Newcastle, Heathrow, Gatwick, Glasgow, Manchester and Birmingham.
“A very strong spread,” as Berryman calls it– and making Emirates one of the few airlines using nearly all the top UK international airports. Its call centre staff at Wilmslow, who handle calls in 20 languages, is growing to 321 this year to cope with bookings. It’s almost two years since Emirates carried its 250,000th passenger between Newcastle and Dubai and its three millionth ton of cargo. And on Newcastle Airport’s 75th anniversary it flew a Boeing 777 in as part of the celebrations. It flew 418 passengers out that day.
“That record for us still stands till we bring in the 777, then I’m sure we’ll beat that regularly,” Berryman laughs. Cargo out features prominently chemicals from Teesside and inward, Nissan engine parts from Japan. Live lobsters for Hong Kong diners also find a place in the hold. But a major concern for airlines and airports alike remains the APD tax introduced in Britain by the previous government and now continued by the Coalition.
