In Theory: Emirates is a rule changer
After a quarter of a century since its establishment, Emirates is now a key foundation in Dubai's economy
One can only admire the great financial results achieved by Emirates airline amid the global financial crisis, especially when the crisis led to the bankruptcy of hundreds of prestigious financial institutions and airline companies.
After a quarter of a century since its establishment, Emirates is now a key foundation in Dubai's economy. It is difficult to imagine Dubai's economy without the massive contributions of Emirates, whose operations became linked to various economic sectors, such as trade, transport, hospitality and the ever-growing tourism sector.
Amid the crises big local companies face, especially in the real estate sector, Emirates airline shines as the indicator of the vigour of the economy of Dubai, and the UAE in general. Credit should be given to the Emirates management and Shaikh Ahmad Bin Saeed Al Maktoum, its Chairman, for the nearly $1-billion (Dh3.67 billion) increase in the company's annual profits, the indirect contribution in stimulating economic activity and the important contributions to the country's gross domestic product (GDP).
Other local companies are supposed to benefit and learn from the professionalism and transparency that characterises the working of Emirates airline which helped it avoid the problems many other distinguished local companies, as well as some public shareholding companies, experienced.
In this regard, it is not surprising to see Emirates top the profitable international airline companies around the world. Judging from the orders placed for the purchase of aircraft in the Farnborough International Airshow 2010 and ILA Berlin Show 2010, a bright future awaits Emirates, which has transformed itself in the past few years into one of the largest airline companies of the world.
It seems like both Etihad Airways and Qatar Airways are walking the same path, and this will enhance air traffic in the region. Boeing expects that global demand for commercial airplanes will increase to around 31,000 by 2029, estimated to be worth $3.6 trillion, with the Middle East and specifically the Gulf region accounting for 23 per cent of that demand.
Therefore, it is possible to say that if Asia is leading the way towards revitalising the global economy in the post-crisis period, then Etihad, Qatar and Emirates are playing the role of revitalising international air traffic. One example is Emirates airline's orders for aircraft, especially the order signed at the Berlin air show for 32 Airbus A380s, which takes its total to 90 of these aircraft.
Transportation centre
Etihad is also expected to increase its number of aircraft from 55 to 100 within the next decade. Qatar Airways is likely to buy 178 Airbus and Boeing airplanes in the coming years, worth $35 billion.
Within this approach, the Gulf Cooperation Council (GCC) countries will turn into one of the most important transportation centres in the world. The attributes of such an approach are beginning to take shape with Etihad Airways, Qatar Airways and Emirates introducing long haul flights and travel routes to Australia and the Americas.
Until a couple of years ago, long haul flights were exclusive to prominent international companies, such as French, German and British airlines. However, Emirates, Qatar and Etihad have changed the situation which led to international companies viewing them as worthy competitors to their conventional centres of activity.
Nonetheless, the international companies should understand the reality that the world is changing. Modern technology and telecommunications have rendered previous geographic distributions obsolete and have provided plenty of opportunities for all countries around the world.
These changes have also paved the way for shifting the economic centre of gravity for many economic activities from their conventional areas into new ones that are characterised by competitiveness and quality of services. This imposes new developments in international economic relations that must be comprehended and dealt with in good spirit.
In short, Emirates airline with its continuous positive results is a thriving example of the success that can be achieved by local companies in various circumstances, including difficult conditions brought about by the global financial crisis or the situation that preceded the first Gulf war three decades ago.
Dr Mohammad Al Asoomi is a UAE economic expert.
