It’s official: Emirates Airline will commence daily scheduled service to Dallas/Ft. Worth airport on October 1, 2014. DFW Airport CEO Sean Donohue sent out a note on Wednesday that the airport would “make a special announcement” today about existing international service at DFW, and within the past hour, news sources reported that Emirates is gearing to upgauge its daily flight from DFW to Dubai to a 489-seat A380, up from its current 266-seat 777-200LR plane.
Rumors began circulating towards the end of February that the DFW airport board was in the process of approving construction at international Terminal D to modify three gates to load passengers on the double-decker plane. The project will cost almost $3 million to complete. I published a post several weeks ago analyzing the various prospects among the near dozen foreign flag carriers with current or future scheduled service to DFW that could be possible candidates, ultimately narrowing the list to two viable options: Qantas or Emirates.
Truth be told, I was leaning more towards Qantas than Emirates. As I wrote previously,
There isn’t a clear-cut victor given the remaining data provided, as both DFW airport officials, as well as both carriers, have been nebulous about expressing more details. Some people expected Qantas to annouce plans to send the A380 to DFW airport during yesterday’s restructuring announcements, but it appears that the carrier as reluctant to provide many details other than the re-timing of the MEL-LHR flight. Still, this does indicate a forward-stepping direction as a window of opportunity for DFW.
However, the actual need is much stronger, from a finance and operations perspective, for Qantas to send the A380 to DFW as a curative measure. For Emirates, the decision is much more centered around preventative medicine. Qantas needs to take advantage of any avenue it has to save its ailing long-haul network. While no signs point to DFW being an unsuccessful performer for Qantas, any additional revenue subsidies and cost-curbing measures have to be exploited. Time is not on its side.
Turns out I was incorrect, and Emirates came through as the crown winner. This will be the first carrier to ever operate a scheduled Airbus A380 service to DFW airport, and the second airline to send the A380 to a Texas airport after Lufthansa at Houston.
While the news is exciting and certainly welcomed, there will be implications
The up-gauge to an Airbus A380 represents an 83% jump in daily seat capacity between DFW and Dubai, which is a major surge for a carrier that has maintained a relatively flat level of weekly available seat miles (ASM) to a single ultra long-haul market for over two years.
Of course, in Emirates’ defense, the DFW station has recorded the strongest load factor percentages of all of its US markets (New York, Washington, Los Angeles, Houston, San Francisco and Seattle), with above 90% load factors since its inception. On the flip side of that equation, DFW also sees less foreign flag carrier competition than the rest of Emirates’ US stations. It is noteworthy that despite the high load factors on the DFW route, combined with EK executives publicly stating that DFW is a “high performing market,” for the carrier (although without stating a specific metric such a yields, load-factor, freight, etc), Emirates has chosen not to up-gauge the DFW route to a 777-300ER over the past 24 months. Such a trajectory is usually common for Emirates’ medium-to-long haul routes that generally perform above market expectations and mature at a faster pace than initially targeted by network planning.
Against a larger backdrop are the impending additions of Qatar Airways (July 1) and Etihad Airways (December) to DFW airport’s list of new airline entrants, who will launch daily service to Doha and thrice-weekly service to Abu Dhabi, respectively. The reality is, all three Gulf Carriers target relatively similar passenger types (primarily traffic traveling between North Texas and the Indian subcontinent). While this market is fairly large, and growing, it is questionable whether the actual size and growth of this pie is large enough to support such a massive capacity influx in such a relatively short period of time.
Whether or not it can be seen as political powerplay for Emirates to up-gauge its DFW flight as a “draw-the-line-in-the-sand” message to its regional competitors, any immediate casualties will not be one of the Gulf airlines, but rather one of the European carriers serving DFW. As has been discussed many times previously, the most vulnerable carrier at DFW is KLM Royal Dutch airlines, which operates a 5-weekly seasonal service between Dallas/Ft. Worth and Amsterdam. The local market between DFW and the Netherlands is small, and depends largely on the same type of connecting traffic that Emirates, Qatar and Etihad caters to out of North Texas.
Still, KLM has clung on and weathered through stormy times. It remains to be seen if the EK up-gauge will be the final nail in the coffin, or if DFW can actually support all of this new foreign carrier traffic sustainably over the long-run. It is dubious, however, that with such a major bump in daily seats, the DFW-India market will not turn into an absolute fare bloodbath.
Even the Gulf Coast carriers themselves are not immune to the detriment of over-serving markets with a superfluous level of capacity. The most recent example has occured in the Philippines, where both UAE and Filipino carriers more than doubled daily seats from Abu Dhabi and Dubai to Manila over the course of a 12 month period. In addition to its existing 3-daily 777-300ER flights to slot-restricted Ninoy Aquino International airport, Emirates added a daily service to Clark airport, a secondary airport to the metro Manila area, and pulled the service within months due to deteriorating yields.
Granted, the UAE-Filipino market is far less premium than the US-UAE market, as it primarily targets visiting friends-and-relatives traffic as well as seasonal migrant workers headed to the Middle East, but it is an example of how the UAE carriers can encounter stumbling blocks when a glut of capacity can become quickly problematic when the market is not ready to absorb it.
The Airbus A380 is still young in the US, and DFW is the 8th airport to receive it
Despite nearing its 7th year since it entered into commercial air service, the Airbus A380 is still a relatively uncommon long-haul aircraft seen around most major US airports. In contrast to the 787, which has experienced a much higher uptake rate since it entered service in 2012, in spite of its grounding by the FAA for several months in early 2013, the A380 is still only used by a handful of airlines in the US. This is primarily explained by economics: the 787 was built and designed for scale and cost-efficiency, and has made new markets like Tokyo to Denver and San Jose possible with a smaller seating capacity that can operate long-range, or help routes such as Chicago to Warsaw become more economically viable over a gas-guzzling 767.
Conversely, the mammoth A380 requires airports and airlines to fund expensive terminal and gate reconfigurations to accomodate the double-decker widebody plane with two jetbridges. It is also simply a huge aircraft with a dense configuration of seats. Some scrutiny continues to persist surrounding the business logic behind the Airbus A380, given that in the era post-2008 Global Financial Crisis, market demands have changed and its value proposition has become obsolete. Of course, having sent the plane into commercial air service a year prior, Airbus was ill-equipped to adapt accordingly.
Currently, there are currently fourteen network carriers which operate services to the United States who either have Airbus A380-800 aircraft in service or on order, including Air France, Asiana Airlines, British Airways, China Southern Airlines, Emirates, Etihad, Korean Air, Lufthansa, Malaysia Airlines, Qantas, Qatar, Singapore, Thai and Virgin Atlantic Airways.
Of these fourteen carriers, eight currently operate A380s to six US airports: Air France, British Airways, China Southern, Emirates Lufthansa, Korean Air, Qantas and Singapore Airlines. A ninth carrier, Asiana, will launch services to LAX, slated to begin in July. Korean Air is scheduled to launch A380 services to Atlanta in July, and when Emirates sends its A380 to DFW in October, the number of US airports receiving A380s will round up to 8 total.
Current and future A380 services to US airports:
- Air France from Paris CDG to Los Angeles, New York JFK, San Francisco, Washington Dulles.
- Asiana Airlines from Seoul Incheon to Los Angeles (commences July 2014)
- British Airways from London Heathrow to Los Angeles
- China Southern from Guangzhou to Los Angeles
- Emirates from Dubai to Dallas/Ft. Worth (October 2014), Los Angeles, New York JFK
- Korean Air from Seoul Incheon to Atlanta (July 2014), Los Angeles and New York JFK
- Lufthansa from Frankfurt Main to Houston, Miami, New York JFK, San Francisco (resumes April 22)
- Qantas from Sydney and Melbourne to Los Angeles
- Singapore Airlines from Tokyo Narita to Los Angeles and Frankfurt Main to New York JFK
Assessing the tally above, it is interesting to note that of the 8 operators, 7 of them send the A380 to Los Angeles, by far the airport that receives the most A380s from foreign carriers. Next comes New York JFK with 5 foreign operators, and then the number sloughs off widely with San Francisco at a mere 2.
It is interesting to note that some of the alliance-oriented carriers, such as Air France (SkyTeam) and Lufthansa (Star Alliance) deploy their A380 widebodies to a handful of markets in the US that are non-hubs within their respective alliances. Air France, for instance, sends its A380s to San Francisco and Washington Dulles, both of which are United and Star Alliance strongholds. Similarly, Lufthansa sends its A380s to Miami, predominantly a OneWorld fortress for American Airlines. The business logic for this could be that routes such as San Francisco – Paris and Miami – Frankfurt are large volume, premium markets that do not necessitate frequency, but simply larger cabins with a wide volume of seats across all cabins.
It is also noteworthy that Chicago O’Hare is not listed among the airports included above, despite ranking #2 of the top 10 US airports by departures and arrivals. When evaluating the top 10 busiest US airports in terms of international traffic, also excluded from the list is Newark Liberty international airport.
Airbus A380 routes to US airports
DFW is now truly an international airport and has come a long way in ten years
As a young aviation fanatic, growing up, I remember combing through the Dallas Morning News print edition every day for news and articles pertaining to DFW airport and North Texas aviation in general. Every time I came across something of value and importance, I clipped the article and saved a hardcopy in a shoebox, and those articles are still archived in my closet back at my parents’ house.
To be truthful, news in the late 1990’s and early-mid 2000’s were fairly mixed for DFW. There were some bright spots: the opening of the new Terminal D and Automated People Mover system, and some higher-level items such as runway extensions and expanded parking lots.
But it pretty much ended at that. Capital investment and infrastructural upgrades were outweighed by lackluster Air Service Development. In general, the 2000’s were a fairly lost decade for both DFW and its largest tenant, American Airlines. Things started unraveling after 9/11 when the airport lost scheduled services on Japan Airlines to Tokyo, Air France to Paris and Sabena to Brussels. American eventually added a second daily service to Tokyo, but the other two carriers were never back-filled.
Following this, there was the never-ending, woeful labor sagas and pilot strikes carried out by American Airlines starting in early 2003, and the road was long and sorrowful until its bitter end in 2011 when AA filed for Chapter 11 bankruptcy. In the intermediary, American cancelled several long-haul routes from DFW that I particularly cared about, such as Osaka, Lima, and Zurich, and DFW also lost an extremely high-visibility bid to fly nonstop to Beijing in 2006. I followed the politics of this campaign closely for months, and it was a slam-dunk, sure-to-win application that would have won approval from the US DOT had American not had such a toxic relationship with its pilots that met its doom when it ran into contractual flying time conflicts.
It didn’t end there. Delta pulled the plug on its DFW hub in early 2005, eliminating thousands of local jobs and cutting hundreds of daily flights to markets in a devastating blow to avoid bankruptcy. Virtually overnight, the vast majority of Terminal E became a ghost-town with 22 vacated gates. The sight was beyond depressing.
Shortly thereafter, AeroMexico and Mexicana withdrew services from DFW and the airport struggled to sustain a sufficient volume of daily international flights to fill up Terminal D to its designed level of use when it actually opened to the public. Eventually, American had to move domestic operations to Terminal D in order to support the businesses of airport tenants, concessions and facilities.
Meanwhile, both the airport and American also busied themselves with expensive, fruitless pursuits such as attempting to block Southwest Airlines and Love Field airport from repealing the Wright Amendment, which they lost in 2006.
It was around this time in late 2005 when I stumbled across an article written by DMN writer Suzanne Marta that featured Airline and Terminal Manager Joe Lopano at the Routes conference in Copenhagen that year. Routes is a self-proclaimed global gathering for aviation organizations from across all continents and countries, bringing together airlines, airports, tourism authorities, civil aviation authorities from all over the world.
In the article, Marta reveals how the DMN had a rare chance to “observe the process up close” and details the busy activity of DFW airport officials delivering presentations and sales pitches designed to woo foreign carriers, in a manner similar to speed-dating.
Back then, Terminal D had ton of extra capacity, and Lufthansa was the only airline that connected DFW to a global hub in Frankfurt. In her article, Marta describes how Joe Lopano “flirted” with Emirates, JetBlue, Qatar, Air France and Finnair, and even distributed T-Shirts that read, “We can land an A380. Got anything bigger?”
Soon after, I left Texas to attend college in the Midwest, and have remained in the region since that year. Yet, DFW airport has always remained my #1 airport.
I had the fortune of connecting with Mr. Lopano one semester while I was an undergraduate to interview him for a management project. He gave me greater insight into the dynamics of the industry and the challenges of attracting, recruiting and sustaining new air services to a market such as Dallas/Ft. Worth, with its South-Central geography and dominance by a single carrier, American.
That was in 2007. The fruits of Mr. Lopano’s labor have paid off significantly since then, and the world at DFW is vastly different now, despite having to endure one of the most grueling financial climates in history.
Since then, the Open Skies agreement between the European Union and the United States has permitted British Airways to move their DFW flight from London Gatwick to Heathrow. Traffic, yields and revenues have exploded in the interim. KLM commenced nonstop service to Amsterdam. American Airlines launched nonstop service to Madrid, and in-tandem, formed a transatlantic, metal-neutral joint-venture agreement with Iberia and British Airways. Once American Airlines re-configures its 777s into a 2-class cabin configuration, I fully expect all of DFW’s European and deep South American routes to be flown on 777s year-round.
Next came one of the most exciting news pieces of the decade, the arrival of Qantas to DFW in 2011, nonstop to Brisbane and from Sydney. Within a year, service was ramped up from thrice weekly to daily. Nonstop service from Emirates to Dubai soon followed.
South of the border, American added Rio de Janeiro, restored service to Lima, and just recently launched Bogota. On the Asia front, American launched Seoul, and will be launching Shanghai and Hong Kong later this year. Korean Air has grown its weekly frequencies to Seoul from 3 weekly to daily. Qatar is launching DFW, and Etihad is starting Abu Dhabi.
On the North American front, DFW has attracted JetBlue, Virgin America, Alaska, WestJet, Cayman Airways, restored AeroMexico, and has achieved noteworthy success with Spirit. American has emerged from Chapter 11 and merged with US Airways as a stronger, leaner, and better-poised carrier to compete in the 21st century.
I couldn’t be more proud. That is why today is such a big day for me.
When I think back to that T-Shirt discussing the A380, it’s truly amazing that that dream will become a reality on October 1. To make the deal even sweeter, it could read with the added tagline, “Got anything bigger? Because we still have plenty of room for more.”