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The challenges ahead for Emirates Airlines

Dan Gorenstein Aug 13, 2015
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Emirates Airlines is the new titleholder for the world’s longest airline route, from the carrier’s hub in Dubai to Panama City, coming in at a brisk 17 hours and a half hours, give or take.

It’s another feat for Emirates Airlines, a company that has established a reputation for offering a lavish flying experience, replete with mid-flight showers, and meals of Iranian caviar and braised beef in coconut milk.

And more and more American travelers are getting a taste. According to the Centre for Aviation, Emirates is adding a record 600,000 seats in the U.S. this year, which is projected to give the company more than two million by 2016.

Bijan Vasigh of ACG Aviation Consulting Group says those numbers – not the extravagances – have grabbed U.S. competitors’ attention.

“Outside competition is getting bigger and bigger,” he says. “The fear is [Emirates is] capturing more and more customers from U.S. airlines.”

In response, Delta, United and American Airlines accuse Emirates – a state-run entity – of benefiting from UAE subsidies, a claim Emirates denies. If the accusation has any merit, it could curb Emirates’ ability to expand its presence in the U.S., but the carrier has more immediate concerns, says industry analyst Mike Boyd.

“They are buying these Airbus A380’s that can handle up to 600 passengers. That’s a lot of airplane,” says Boyd. “You fill them up, you make a lot of money. You don’t fill them up, you lose a lot of money.”

Boyd says Emirates’ success hinges on its ability move passengers across continents, like its new Dubai to Panama route. It certainly helps get someone on plane for a nearly 18 hours with promises of caviar, fine wine and a shower.