By David Knibb
Even Tim Clark, president Emirates Airline, is surprised at how well his carrier is doing
When he and a group of other expatriate airline veterans drew up the business plan for the flag carrier of the United Arab Emirates, they knew Dubai's location made it a potential hub between Africa, Asia and Europe. But no one was sure how well it would work.
The recent new route to Shanghai underscores its success.
"Three weeks after launching Shanghai in April 2004 we were making heaps of money on it," Clark beams. "Most airlines plan on a two-year payback for a new route. We normally expect six months. But profit after three weeks is unheard of."
One of the main reasons, it turns out, was unexpected traffic between Cairo and Shanghai. "No one had expected this," Clark says. "We had just created a conduit to facilitate the flow of Chinese and Egyptians."
Shanghai is an obvious example in what Clark sees as almost a miracle – traffic generated by creation of a hub that links 83 destinations in 55 countries, most on a one-stop basis. He cites examples of African traders seeking IT help in India, miners from Perth in Australia going to Africa, German tourists visiting Australia.
"What we're finding is that as the hub approaches critical mass, the business is starting to energise in a big way."
The world's perception of Emirates changed in 2001 when it became one of the launch customers for the Airbus A380, Clark recalls. "Even though Emirates was a well-planned and well-orchestrated airline, before that we hadn't really put our head above the crowd." With that A380 order, he says, "we burst onto the world stage."
Dubai itself is in what Clark calls "explosion phase" with its own mega-projects and traffic growth, but it was the advent of long-range widebodies that allowed Emirates to turn Dubai into what is becoming the world's biggest sixth-freedom hub, and to convert Emirates into what Clark proudly calls "a 21st Century airline" with the world's largest hub-and-spoke network.
He rejects the complaint by point-to-point carriers that Emirates is diverting passengers away from them. He talks instead of "growing the pie", of stimulating traffic between city-pairs they do not serve.
"It is not true that we rape and pillage international markets," he claims. "We are growing our network on the basis of connectivity. If other airlines adopted our model, the number of people taking to air travel would explode."
The head of an airline that owes much of its success to sixth freedoms might be expected to criticise point-to-point carriers for lobbying their governments for protection. Yet Clark reserves his biggest complaint for the bilateral system itself. "Dinosaur, primeval and hierarchical" are labels he uses to describe it.
"This whole business about borders and terms like fifth and sixth freedoms are an anachronism," he insists. "This is Planet Earth; we're living in a global economy. As multilateralism moves across the planet, with free trade agreements, the World Trade Organization and the world wide web," he predicts, it will keep "chipping away" at the old order.
"I think some of us 21st century airlines like Emirates need to lead on that," Clark remarks. "When it comes to preaching the word about removing these obstacles, we're missionaries."
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Source: Airline Business
