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Du Preez Piloting Emirates’ Business Exploits

Du Preez Piloting Emirates’ Business Exploits

 

 

 

 

 

 

 

 

BY SIMON MULI

Kenya is home to the largest aviation infrastructure and the busiest airport in East Africa, with flights connecting the country to others in the continent and beyond. This has afforded her the best in the global air transport network to rumble through its skies and perch on its airports. One of them is the world’s largest long-haul carrier, Emirates. The Dubai-based airline recently appointed a new Country Manager for East Africa, Hendrik du Preez, to pilot its regional growth strategy both, in passenger travel and cargo freight. Now coming into one year since his appointment and completing the eighth year with the airline, Du Preez discusses some of the recent developments at the carrier, its main
challenges and opportunities for the future.

 Emirates is positioning itself for the next phase of growth in the Kenyan market. What do you hope will be your magic bullet in terms of strategy?

We constantly evaluate our routes, see if they are profitable and whether there is additional need for capacity. We obviously need to see how the economy does in the next year or so. Last year, the economy took a dip. But that is often a common factor in Africa; whenever there are elections, things tend to slow down until surety returns in the market. In the beginning of the year, there was a little bit of uncertainty. However, a number of things have happened during the course of the year that has reinstated confidence in the market. Compared to last year, 2018 has been a very good inbound season across East Africa.

 

What happened to your prospects for a third daily flight between Nairobi and Dubai?

Last year, we had three flights that were operating in June till the end of October. However, the authorities only gave us the approval for that period. At this stage, our two flights daily flights are doing well and are very successful. We are re-evaluating to explore the possibility of adding an extra flight, depending on how well the economy is doing and whether or not if there is enough traffic for us to sustain another flight.

 

Nairobi is one of your most important freight stations, thanks to Kenya’s status as a flower garden for Europe. But in your 2017/18 financial year, the Emirates Sky Cargo carried 27, 000 tonnes of fresh flowers, which is barely a quarter of the annual flower exports. How are you planning to grow that?

In addition to the flights that go out daily, we have seven flights coming in to cargo flowers from Nairobi to Amsterdam. Numerous players in the flower industry have told me it has been quite a difficult year due to the weather patterns. But we are heading back to the peak season, now, all the way till Valentine’s Day next year. If there are additional opportunities for growth, we can always see where to realign our resources and bring in additional flights.

 

Aviation and the travel industry are notoriously vulnerable to socio-economic and political events as well as the ever changing expectations of consumers. How does Emirates navigate these vulnerabilities in today’s world?

Companies need to be agile and forward-thinking in the face of these news things. When the global oil prices go up for example, if you do not make the right adjustments on ticket prices at the right time, you are going to lose money as a company. Unlike other industries where you get 20% to 30% profit margins, the airline industry gets between 3% and 5%. Also, we always work closely with our partners to identify new segments to support us as a business.

 

You fly the world’s biggest fleets of Airbus A380s and Boeing 777s, configured a record plane seat of 615 passengers and fly some of the longest non-stop routes. What is the big thinking behind all this?

That’s right; we are the biggest operators of the Airbus A380s and Boeing 777s in the world and should start receiving the 777X by 2022. The Airbus A380s and Boeing 777s are a lot more fuel efficient, which is another main thing with airlines today. The more fuel efficient you can be, the more passengers you can carry for a lower cost. We also operate one of the youngest fleet, on average, because as our planes become older, we phase them out and replace them with new ones that are equipped with new technology and improved fuel efficiency. This goes back to the history of our airline, since it was started in 1985. It was the vision of the CEO of the Emirates Group, Sheikh Ahmed bin Saeed Al Maktoum, to develop the airline to what it has become today. Also, using the strategic location, Dubai, as a central stop, you can connect 60% of the world’s population in an eight-hour radius.

 

In the emerging market, Sub-Saharan Africa included, you have experienced slackening demand. What is so challenging about this part of the world?

There is a lot of volatility in the emerging market and lack of enough foreign direct investment (FDI) – but a lot has been changing. Recently, we had all African leaders going to China, where some US$ 60 billion was pledged for investments in Africa. Another challenge in Africa is the big gap between the very low income and the very high income population. Countries like South Africa and Egypt have a much bigger and growing middle income segment. As that further develops, the purchasing power will increase and that means more people have access to travelling. In the near future, Africa is predicted to become one of the biggest growing markets in aviation industry, purely because of these economic factors. Another challenge has been accessibility to air travel in Africa. Not many years ago, for people to travel from East to West Africa, they had to catch a connecting flight in Europe. But there is still a lot of opportunities and airlines now need to create the right products in the right place. Historically, airlines have been sending their old aircrafts to operate in Africa. That has also been changing and they now understand that this market is as important to them as any other markets globally. For us, we have got some of the newest aircrafts coming to Africa.

 

Airline industry experts have been proclaiming the death of the first class for many years, in favour of more economic seats. But you still sell premium tickets. Why?

People are buying premium tickets out of this market. I have definitely not witnessed a decline in premium tickets in East Africa. In fact, our aircrafts are one of the few that fill from front to back, rather than the other way round. People come from as far as Mombasa by their own means to Nairobi, to get into our first and business classes, because they are that good. We are the first airline to introduce showers on board. Hundreds of millions of dollars have been invested in the unique wine selection we serve on board as well. It is those unique features that create loyalty among our clients, because they know what to expect.

 

Finally, increasingly, budget airlines are eating into the market share of legacy carriers like yours. What are you and your peers doing to reinvent yourselves to counter this apparent onslaught?

I wouldn’t say budget airlines are eating into our market share. What is happening a lot of the time is that the budget carriers are expanding the entire market by affording those who couldn’t fly before, a chance. They have opened up new destinations that legacy carriers could not access. And for whatever reason, once they taste the travel experience, these people often tend to upgrade their experiences. At the same time, we all cater to different segments of the market. You have the very cost-conscious segment and we are looking at ways to tap into that market. For example, we are exploring ways to see how one can pay less if they don’t take a bag with them. But at this stage, our business model has been very strong and works; we continue to constantly redevelop and reinvent.

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