THE FOUR COMPANIES THAT CREATED AIR TRANSPORT

4 – EMIRATES – THE NEW STANDARD

In the mid-1980s, no one could have bet a dollar on the future of Emirates, whose creation on 15 March 1985 followed Gulf Air's gradual withdrawal from Dubai services. Operations commenced on 25 October 1985 using two Boeing 737s leased from Pakistan International Airlines with flights between Dubai and Karachi. At the time, Dubai bore no resemblance to what the city has become today, largely due to the contribution of its airline, which had no domestic market. And the political situation in the area has gone through strong shocks with two wars in Iraq and a number of latent conflicts between the Gulf states. And yet, almost 40 years later, it has become the world reference for air transport. How can this be explained?

Admittedly, from the beginning, the Dubai government provided the necessary funds for the creation and start-up of the carrier by injecting $80 million into the operation, but this is the only financial contribution it has received from the beginning. We must look elsewhere for the keys to success. I see three of them for the most part.

First of all, there is a great deal of stability in the management. Since 1985, Emirates has had only one Chairman: Sheikh Ahmed bin Saheed Al-Maktoum and two CEOs, Maurice Flanagan and, since 2003, Sir Tim Clark. And this team agreed perfectly to decide on a strategy that has never varied: to connect the countries of the East of the World to the countries of the West by having passengers transit through an extremely high-quality facility, which more than compensated for the lack of a local market. This is what has forced the company to always achieve excellence in its product, whether in operations or on-board service, but also in all the peripheral trades that make it possible to create this new standard of quality, I mean training, ground handling, engineering, all down to the smallest details, such as the choice of typefaces, colors, or reception in trade fairs in Dubai.

It also took a lot of audacity to become the first and soon the only major customer for the largest civil aircraft, the A380, which allowed Emirates to define and put into operation a product of unparalleled quality. This is how the Dubai-based carrier has become completely dominant for First and Business class customers for all passengers transiting through the Gulf. This is also the reason why the Dubai "hub" has faced strong competition from Western European airports, whose quality of service has become so incomparable with that of the major Gulf hubs. It should also be noted that this model has been copied with varying degrees of success by its competitors in the same area: Qatar Airways with a certain success and Etihad Airways which has suffered a resounding failure.

In any case, all airlines, with the notable exception of the American ones, whose strategy is primarily dependent on the domestic market, have had to position themselves in relation to Emirates. The first concern was to have modern fleets that were more comfortable and more economical to operate, and then to be able to use airport facilities of a level and organization unknown until then. It is also clear that a large part of Emirates' success is due to the complicity between the company, its airport and its handling company, all of which are owned by the Government, which avoids conflicts of interest. I note that all the new major airport facilities in Europe, I am thinking of Istanbul and in Asia, China, Indonesia or India, are designed on the same principle.

So it is not unusual to recognize that Emirates has initiated and developed a new standard for international long-haul air transport. This has also been profitable because since its creation, the company has only had two years of loss in 2021 and 2022, as has the entire air transport industry. In 2023, it posted a net profit of $3.2 billion on a turnover of $32.6 billion, and as far as we know, the figures for 2024 (the company closes its accounts in March) will still be much higher.

The lesson is clear, quality pays off and customers are willing to pay the asking prices and even choose a transit through Dubai even if it means extending their trip a little to benefit from a service on board that it would be too long to recount here.