Coronavirus: Emirates Had Challenges Even Before the Outbreak - Bloomberg

Coronavirus: Emirates Had Challenges Even Before the Outbreak - Bloomberg:

Much as Pan Am Corp. was an emblem of the first wave of global aviation, Emirates has dominated the world airline industry for a generation. Its announcement that almost all passenger flights will be suspended from Wednesday marks the death knell of that era.

The Dubai-based carrier is the largest airline by international passenger traffic, with the capacity to move its customers 391 billion seat-kilometers last year. In terms of cross-border traffic, that’s twice the capacity of any U.S. airline and about a seventh more than the three European carriers that are its closest international competitors in terms of scale.

The shutdown of that vast network is a hammer-blow not just for the industry but for people around the world. There’s a reason so many airlines are (like Emirates) state-owned, or have special rights and duties to their home countries written into their constitutions. They aren’t just a leisure service, they’re a piece of vital national and international infrastructure that can provide an airlift service in an emergency. Emirates’ initial announcement of a complete suspension of flights Sunday was subsequently updated to say that some destinations would remain open “having received requests from governments and customers to support the repatriation of travellers.”

Businesses that thrive on bustling cross-border traffic are inevitably going to struggle in current conditions. Cathay Pacific Airways Ltd., another carrier that, like Emirates, has no domestic aviation market, last week announced it was cutting 96% of capacity in April and May, which is as close as you can get to shutting down. Qantas Airways Ltd. is also ending international flights and Emirates’ local rival Etihad Airways PJSC has made drastic cuts to its schedules.