Another set of good results for Emirates airline. Business as usual. As expected you might say. Yes, perhaps, but that would be a too easy dismissal of the airline’s achievements.
In a year when competition increased, not least from other high quality players in the region and when Emirates itself added more new wide-bodied jets than the entire fleet size of many airlines, it is remarkable to have maintained both high seat factors and to have seen profits surge.
I am a European who has watched the trajectory of Emirates since the beginning. In my early airline career in the 1980s, when a flatmate of mine, who had joined dnata in London, told me they were going to set up an airline I was surprised. In 1987, when Emirates started a London-Gatwick service competing on the Dubai route with my then employer, British Caledonian Airways, I couldn’t see how it would work. After all, we were only putting 30-40 passengers to and from Dubai on our DC-10 aircraft with most customers going to and from Hong Kong. How could Emirates possibly fill an entire aircraft?
I was wrong. Over almost 30 years, Emirates has played on Dubai’s status as a trading nation and meticulously built up a global network whose time has now come and is being emulated by the other Gulf carriers. Initially there was a need to protect Dubai’s access to key markets as other carriers withdrew capacity in the early 1990s and to work hand in hand with the development of the tourism industry in Dubai. However the pace of growth has accelerated and is increasingly explained by the shift in 21st century macroeconomic dynamics.
Range of connections
Emirates was the first to see the potential, now being tapped by other Gulf carriers, to exploit newly emerging markets such as Asia, Africa and Latin America by offering an expanding range of connections through its Dubai hub. This has contributed to the rapid growth seen at both the airline and at Dubai Airport over the last ten years or so. The airline has been able to use this geographic advantage combined with its fleet of state-of-the art aircraft, excellent airport facilities and a competitive and appealing customer proposition to underpin its growing market share and to deliver the profitable results we see today.
This development has not happened by chance. It has required visionary leadership and the airline is fortunate to have had Sir Tim Clark at the helm, a man who is steeped in the techniques of route evaluation and in the technical capabilities of aircraft. He has led the team who have blazed the trail for Emirates’ innovative network development and his is a voice which is listened to closely by Boeing and Airbus when planning their aircraft design specifications.
Today’s success has not been without its challenges nor will they disappear for the future. Governments and airlines in some parts of the world complain that Emirates benefits from “unfair” advantages. It will have to continue to explain its model and remain on a charm offensive around the world to avoid blockages to its future growth.
There are those, however, who have understood the tectonic shift in 21st century aviation. The partnership that Emirates has established with Qantas will, I believe, be adopted by others in the future. Willie Walsh, CEO of IAG, parent of British Airways believes the Gulf carriers should be congratulated and that others should learn from them. The financial results of the last year reflect a business run on a clearly commercial basis and one who’s management stewardship has been diligent since the outset.
The writer is Director, JLS Consulting