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Speaker 1: Emirate Airlines wrapped up a major order for Boeing Aircraft,

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Speaker 1: ceiling an agreement for ninety of the US manufacturers coming

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Speaker 1: seven seven seven X wide body aircraft and adding five

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Speaker 1: of the smaller seven eighty seven model for more. Bloomberg's

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Speaker 1: Guy Johnson spoke with Emirates Airlines president Tim Clark.

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Speaker 2: The world feels like a very turbulent place right now.

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Speaker 2: You've got obviously a lot of geopolitics, feels like the

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Speaker 2: global economy slowing down. Why is the right moment now

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Speaker 2: to place a big order like this.

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Speaker 3: Well, there's a number of reasons for that, one, not

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Speaker 3: besiding what you just said about the sort of geopolitics

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Speaker 3: and things going on in the Middle East. Demand for

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Speaker 3: travel on memors at the moment is one of the

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Speaker 3: strongest it's ever been in its history. And if we

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Speaker 3: had those aircraft we ordered today in place tomorrow, we'd

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Speaker 3: fill them up.

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Speaker 4: It's as strong as that.

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Speaker 3: So the reason we've bought these was one to replace

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Speaker 3: some of the old seven seven sevens and eventually in

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Speaker 3: the three eighties, and also expand the network. So we

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Speaker 3: have ninety extra seven seven sevens. We've increased the order

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Speaker 3: on the seven eight sevens by thirty eight thirty five,

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Speaker 3: so up to side, So we'll have two hundred and

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Speaker 3: forty five boeings on all are coming in and the

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Speaker 3: three eighties will keep going as long as possible because

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Speaker 3: they are so potent for us in our business model,

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Speaker 3: and the three fifty start being delivered next year, fifty

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Speaker 3: of those, so that'll allow us to manage out the

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Speaker 3: oldfully expand the network, and do all things that we

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Speaker 3: plan to do notwithstanding the current situation. Because if we

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Speaker 3: are driven by short terms and we'd never buy an aircraft,

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Speaker 3: we have to take the view that things are going

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Speaker 3: to are going to be good in the future, that

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Speaker 3: demand will restore itself, and there will always be bumps

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Speaker 3: in the road, but in the end we'll manage those.

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Speaker 2: We were anticipating that we would see a large air

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Speaker 2: bus order here as well.

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Speaker 4: What's holding that up.

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Speaker 3: Well, look, we've been looking at more three fifties. I

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Speaker 3: think we've we've still got to get over the last

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Speaker 3: jump for the commercial terms of this, and we have

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Speaker 3: to get through some of the engine issues that exist

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Speaker 3: at the moment.

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Speaker 4: Hopefully they'll go away in the future.

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Speaker 3: They'll roles being the signal slot supply will provide an

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Speaker 3: engine that is going to do the job that we

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Speaker 3: need for.

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Speaker 4: His roles.

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Speaker 2: Being more commercial now under new management, is that part

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Speaker 2: of the problem.

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Speaker 4: Is this a performance issue or a financial issue?

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Speaker 3: I think I think the new CEO has got to

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Speaker 3: reset the company. I think they they and he's doing that.

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Speaker 3: And of course the the perhaps the the aggression of

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Speaker 3: the old days was probably wasn't doing them much good

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Speaker 3: in terms of the support and the engines themselves. He's

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Speaker 3: trying to reset that, get that onto a commercial footing

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Speaker 3: as far as Rolls Royce is concerned and its shelders.

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Speaker 3: But at the same time, you've got to develop engines

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Speaker 3: that are fit for purpose, that are good, solid resival,

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Speaker 3: good on fuel, and can can manage the duror the

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Speaker 3: problems that we present for very high takeoff weights, very

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Speaker 3: high temperatures, dust low temperature for performance. It's six hundred

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Speaker 3: in the summer months.

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Speaker 4: It taxes the engine.

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Speaker 3: And yet the biggest buyers of the three fifty one

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Speaker 3: thousand are in this region and we're all on a.

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Speaker 4: Mission to push.

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Speaker 3: Them out as far as they can go with the

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Speaker 3: takeoff weights that we're so the engine has got to

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Speaker 3: do a little bit better for us that it might

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Speaker 3: have had to do for SAT British Airways because they

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Speaker 3: don't have to operate in these kind of conditions. I

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Speaker 3: think they'll get there in the end, and when we

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Speaker 3: get some visibility of that and.

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Speaker 2: We get some undertakings, then we'll be looking at it.

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Speaker 2: We are going to see it looks like a large

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Speaker 2: Turkish order. Are they now the new threat in the region?

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Speaker 2: Are you know me? How many years have we been asking?

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Speaker 3: Used to say to me, will three carriers? If he

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Speaker 3: had Gata Airways is a room for all of you?

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Speaker 3: And then roll the clock to where we are now,

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Speaker 3: and what would you say? They're all booming. Gata went

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Speaker 3: from whatever it was to two hundred plus two hundred

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Speaker 3: and fifty it he had, okay, went ahead, and then

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Speaker 3: it's shrunk and now it's growing back again.

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Speaker 4: Everybody has continued to three large carriers.

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Speaker 3: Turkish has basically said, well, you know, we can manage

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Speaker 3: this as well. They build a big hub and they

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Speaker 3: start flying all over the world. So yes, they'll have

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Speaker 3: a big order probably coming out. Do I have a

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Speaker 3: problem with that, No, because I'm a great believer in

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Speaker 3: demand for travel globally, being very strong and robust, more

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Speaker 3: so now than our pre COVID. This is the paradox

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Speaker 3: which gets everybody offsided. More people are traveling, more people

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Speaker 3: are traveling more often and paying high affairs, and still

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Speaker 3: they keep coming at us. So, and don't forget. You're

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Speaker 3: in the part of the world, the Middle East where

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Speaker 3: Sally Raby has got us like a two and a

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Speaker 3: half trillion dollar spend plan. You've got a lot of

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Speaker 3: economic activity in the UA and the other state. So

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Speaker 3: it's sucking in labor, is sucking in investment and everything else.

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Speaker 4: It's a really good place to do business now.

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Speaker 3: So in answer to the question, whether it be Rear

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Speaker 3: there coming along or Leon or whoever it was, bring

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Speaker 3: it on, it does not.

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Speaker 4: It's going to face me.

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Speaker 2: Have you mentioned the geopolitics and what is happening in

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Speaker 2: the region. You've had to obviously close down your roots

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Speaker 2: into Tel Aviv. How much is that costing you do

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Speaker 2: you see it persisting? What do you see the landscape

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Speaker 2: looking like?

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Speaker 3: Well, I look, you know, in terms of what we

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Speaker 3: had three flights today going there, three seven seven sevens

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Speaker 3: going in that they were full and they were very

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Speaker 3: high yielding, and a lot of these Raerei traffic went

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Speaker 3: through the hub, through Dubai and onto other parts of

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Speaker 3: the world.

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Speaker 4: We've lost all of that.

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Speaker 3: But then in the past, we've lost Yemen, we've lost Libya,

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Speaker 3: we've lost Syria, We've we've had all these things. It's expensive,

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Speaker 3: it's it's it hurts a little bit. But can we

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Speaker 3: manage it?

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Speaker 4: Of course we can.

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Speaker 3: Okay, there's always a backfilm process that we can do.

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Speaker 3: As far as the longevity of the situation is anybody's guest.

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Speaker 3: I have no idea what's going to happen there at all.

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Speaker 3: It's pretty ugly there at the moment, and I don't

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Speaker 3: think any of us would think otherwise. But we have

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Speaker 3: a business to run. I've got another one hundred and

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Speaker 3: thirty odd destinations to operate with the fleet of two

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Speaker 3: hundred and sixty aircraft.

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Speaker 4: So we've just got to go on with it. China.

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Speaker 2: How quiet is China right now? Is it going to

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Speaker 2: come back? And got the APEC summit coming up this week?

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Speaker 3: Well, I think it's going through an interesting time the

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Speaker 3: Chinese economy. That's why we have this summit coming up,

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Speaker 3: et cetera. But as far as we're concerned, we have

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Speaker 3: restored our frequencies there, we could still do a lot

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Speaker 3: more in China.

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Speaker 4: It's no point sort of writing off China.

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Speaker 3: I mean it's there may be a lot more on shuring,

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Speaker 3: there may be a lot of closer to home tertiary production,

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Speaker 3: et cetera, et cetera.

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Speaker 4: But this country is probably strong.

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Speaker 3: Enough to deal with all of that and still be

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Speaker 3: as solid as it is on the basis that you know,

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Speaker 3: global demand continues to grow.

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Speaker 4: Demand for what goes on in China will get you

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Speaker 4: to go.

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Speaker 3: There will be competitors coming up, we know that, and

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Speaker 3: there'll be a lot of people who are concerned about

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Speaker 3: what happened in COVID and what's been happening geopolitically. But

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Speaker 3: you don't write China off on that basis. So it's

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Speaker 3: still going to be a potent market for us. It'll

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Speaker 3: be a potent market both internally for its own domestic carriers,

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Speaker 3: and I think a lot of carriers would go into

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Speaker 3: China a lot more than they are doing if they could.

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Speaker 3: And we were restricted to thirty five flights a week,

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Speaker 3: could we do seventy or eighty and ninety flights a week?

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Speaker 4: Of course, we grew look at the cities that are

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Speaker 4: still underserved.

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Speaker 2: Do you think there needs to be a single rule

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Speaker 2: book for airlines in terms of where they are flying

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Speaker 2: or overflying. At the moment, we seem to have a

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Speaker 2: scatter gun approach. Some air lines are flying some routes

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Speaker 2: across across the Middle East, across Russia, others than taking

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Speaker 2: different routes. There doesn't seem to be a commonality to

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Speaker 2: the approach that is being taken. Do you do you

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Speaker 2: think that's wise? Do you think we need to see

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Speaker 2: a more common approach. Some airlines are having to fly

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Speaker 2: very long legs at the moment, increasingly long legs to

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Speaker 2: get round some of.

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Speaker 3: The geopolitical issues we've already been talking about. Yeah, I

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Speaker 3: think in terms of these these reroutings. Of course, for

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Speaker 3: a number of reasons that we have a Russian situation

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Speaker 3: where a lot of carriers are not over flying Russian,

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Speaker 3: they're having to take a lot of details. Then you

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Speaker 3: get the normal risk assessment when you get military activity,

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Speaker 3: whether it be in the Middle East and Israel area,

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Speaker 3: or in Iraq or Syria or whatever.

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Speaker 4: And each of the carriers we talk a lot to

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Speaker 4: each other.

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Speaker 3: And we make our own risk assessments and what's likely

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Speaker 3: to happen in those areas, and that's monitored by the minute. Actually,

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Speaker 3: we've got a whole team of people that look at

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Speaker 3: the routings of the aircraft, looking at the volatility on

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Speaker 3: the ground if there is some, and making the adjustments

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Speaker 3: we do. But always this risk assessment is driven by

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Speaker 3: no risks in terms of the aircraft and its passengers

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Speaker 3: and crew, So we do whatever we need to do

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Speaker 3: to try and go around. As a rule, I think

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Speaker 3: we tend to be doing the same thing, notwithstanding the

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Speaker 3: geopolitical requirements of things like overfly Russia.

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Speaker 1: That was ember It's Airlines president Tim Clark speaking with

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Speaker 1: Bloomberg's Guy Johnson