Emirates Bali capacity boost backed by growing European transfer flows

United Arab Emirates (UAE) carrier Emirates Airline has outlined plans to introduce a second daily service to the island of Bali in Indonesia, from July 2, 2017 as it seeks to take advantage of growing demand for travel to and from the popular leisure destination. The new service will particularly offer more convenience and connectivity options from Europe, a market that is helping underpin the demand growth.

The new outbound flight ‘EK360’ will depart the airline’s Dubai International Airport hub in the early hours of the morning (01:25) and arrive at Denpasar’s I Gusti Ngurah Rai International Airport in the mid-afternoon (14:30). This will provide enhanced connection options from Amsterdam, Moscow, London, Paris and other points across Europe and also onward links domestically in Indonesia to the likes of Surabaya, Makassar and Lombok.

The return flight ‘EK361’ will depart Bali in the early evening (16:40) and arrive back into Dubai International Airport in the late evening (21:40). Both inbound and outbound services will also accommodate connections to and from Dili in East Timor and complement the airline’s existing schedule in and out of Bali.

As a leading holiday and tourism destination, Bali welcomed nearly five million foreign tourist arrivals in 2016, a million more than in 2015. There were notable increases in tourism numbers from the United Kingdom (+32.1 per cent year-on-year), France (+25.7 per cent y.o.y.), Germany (+27.9 per cent y.o.y.) and Russia (+29.2 per cent y.o.y.) in 2016, according to Bali Government Tourism Office statistics.

Emirates commenced services to Indonesia in 1992 with three flights per week via Singapore and Colombo, Sri Lanka and since March 2013, the airline has been operating three non-stop flights daily to Jakarta from Dubai with a Boeing 777 aircraft.

The UAE carrier has also been operating daily flights connecting Bali and Dubai since June 2015. This flight like the new rotation is flown using a Boeing 777-300ER offering up to 20 tonnes of belly-hold cargo capacity per flight and providing two-class seating for 428 passengers – 42 in Business Class and 386 in Economy.

Bali is a significantly important market for Emirates with traffic data showing high interest from across its network, specifically in the leisure segment. The new flight will introduce almost 6,000 additional weekly seats into the market, with 90 per cent of these being in the Economy cabin – potentially accommodating approximately 280,000 additional annual leisure travellers.

A look at traffic numbers from the AirVision Market Intelligence tool from Sabre Airline Solutions shows that Emirates carried an estimated 260,000 bi-directional passengers between Dubai and Bali in 2016. Data for the first two months of this year already show a 26.5 per cent rise in numbers versus the same period last year. This growth is being driven by transfer traffic with local O&D demand actually slipping -22.1 per cent during the period and its share of traffic declining from 15.4 per cent across the first two months of 2016 to 9.5 per cent in the same period this year.

Under closer observation, the data shows the clear origin markets that are behind Emirates’ strong passenger demand into Bali. The Dubai – Denpasar local demand accounted for just 12.7 per cent of total traffic on the route in 2016, with origin flows from Amsterdam, Paris Charles de Gaulle, Munich, London Heathrow, Dusseldorf, Zurich, Moscow Domodedovo, Frankfurt, Hamburg and Lisbon exceeding 3,000 annual passengers in the full year. In fact over 12,000 passengers (around 33 a day) from Amsterdam to Denpasar connected via Dubai in 2016, around 13.3 per cent of the total directional O&D market.

Growing its transfer share from western Europe

Last year an estimated 1.15 million passengers travelled to and from Denpasar’s I Gusti Ngurah Rai International Airport to and from destination across western Europe, a market of almost 1,575 PPDEW (passengers per day each way). This market has grown 37.9 per cent in the past year, 96.6 per cent since the start of the decade and 172.8 per cent over the past ten years at an average annual growth of 19.2 per cent.

Emirates’ debut of direct flights into Bali in June 2015 have helped it grow its own share of the traffic from just 1.0 per cent in 2010, up to 11.4 per cent in 2015 and 15.2 per cent last year. It is currently the second largest operator in this market behind Gulf rival Qatar Airways, which had a 25.2 per cent share in 2016 – effectively one in four of all passengers flying between western Europe and Bali flew with Qatar Airways.

An additional 316,000 bi-directional O&D passengers flew between western Europe and Denpasar in 2016 and Emirates was responsible for around 80,000 of them. It is showing a strong performance in and out of Bali with excellent loads to and from Dubai, and its growth rate in 2016 was the largest of the top ten operators in the market.

At the beginning of this decade the western Europe - Bali market was dominated by Asian carriers Singapore Airlines and Malaysia Airlines, however the flag carriers have lost out to the enhanced, and more convenient, connection options now available via the Middle East. The strong leisure flows, some with high yield profiles, could make this a market open to long-haul low-cost operations in the future.

In the meantime, the second rotation from Emirates will enable to compete more strongly for transfer passengers with its Gulf rival Qatar Airways. The latter already offers two rotations per day into Bali from Hamad International Airport in Doha using an Airbus A330-300 and Boeing 777-300ER on the two daily flights, including an early hours departure from the Middle East that offers strong connectivity from the European market.