Introduction

This chapter takes the literature review as an input to develop the formal case study research
process and the steps that were taken to complete this study. The study research approach,
employed in the study, is presented. The empirical testing will begin by describing, briefly,
Emirates from a corporate and historical overview, which will then be extended to some
suggestions on their operating business model.
Emirates Scheduling Practices
As was discussed and analysed in the previous two chapters, an adapted model produced by
Belobaba is being used to build comparisons between academic work and the real world. This
work has not covered to the full extent of the model, as certain parts of the network strategy
involve sensitive corporate information to the company is therefore not available to the public for
research. So the paper is as factual and unbiased as possible, the parts of the strategy including
fleet planning, revenue expectations, and route evaluation have been ignored for the airline
analysis.
The Hub and Spoke Model
The majority of Emirates passenger traffic is merely connecting through DXB and the airlines
organisational model at its home base is geared towards catering to these flows of connecting
traffic. Emirates operates a hub and spoke operational model with a single hub that is based on a
number of arrival banks followed by departure banks, which allow for passengers to connect via
the hub between various end points.
The hub and spoke operational model has been practiced by airlines around the world, and
although it contains a number of negative aspects pertaining to such issues as airport congestion
around peak times and the uneven use of human resources at the hub, the hub and spoke system
remains very popular with medium to large sized airlines.
Dubai is at its busiest between 05:00 and 10:00 when the airlines main overnight arrivals bank
morphs into its main morning departure bank. The second busiest period is between midnight
and 02:00, when an identical move, albeit largely in the opposite direction takes place. Outside
of these banks, in the middle of the afternoon, the Emirates terminal at DXB is in relative
hibernation in comparison to the rest of day, where at time the terminal is near capacity, both
inside and outside on the apron.
Scheduling, Connectivity, Timetabling and Capacity
The timetabling of an airline encompasses not only the actual airline schedule, but also fleet
assignment and network planning (Baldanza, 2010). The basis of the Emirates timetable is

Dubai. The flights are scheduled to optimise connection possibilities and reduce connection
times on trunk routes. The result of this can be unpleasant departure times and extended ground
times in an outstation.

To provide an example of unsocial departure times from an outstation, the flight EK409,
operating MEL-KUL-DXB, departs Melbourne at 03:35 and arrive DXB at 13:00. This arrival
time provides connections to the second European departure bank. If the flight were to leave
MEL earlier, at 23:00 for example, the aircraft would arrive at DXB at 08:25. This causes a
misconnection with the departure banks, requiring the passengers to have an extended
connection. Furthermore, in order to depart MEL at 23:00, the aircraft would have leave DXB
for its outbound sectors at 22:25. This is part of the minor departure bank, but does not provide
optimum connection possibilities at this time.
The same is true of EK306, Beijing Dubai. This flight remains on the ground in PEK for
nearly nine hours before its return to Dubai. If this flight were to depart after a standard 90minute turnaround at 16:15, the arrival time in DXB would be 20:55, which again misconnects
with the target destinations of Europe and Africa.
Coupled with connectivity and timetabling, Emirates have incorporated frequency into their
plans. Where destinations have high levels of demand, the airline schedules multiple frequencies
to these destinations. The majority of European destinations are served at least twice daily, with
one departure scheduled in each of the morning and afternoon waves and associated late
night/early morning arrival waves. Services to the Indian Subcontinent and the Middle East have,
in some cases, upwards of 5 services per day; some of these connect with the banks in DXB and
others facilitate the regional travel demand.
Fleet Assignment
Emirates have a fleet of 148 aircraft comprising of 8 models of airplane built by two
manufacturers. Within these eight models, capacity differences exist, particularly with the B777
fleet. Appendix 2 tabulates the different configurations. By operating multiple configurations, the
airline can better assign capacity to demand across all classes of travel. This brings inherent
complexity to the airline and requires extra planning from the responsible parties. Aside from the
need to control capacity on a given route, consideration must also be given to restrictions places
upon particular types of aircraft and certain places. Not all aircraft can land at all airports. This is
brutally apparent with the operation of the A388.
Another example lies in the use of the A332, for some airports on the Emirates network, this is
the largest aircraft that can be accommodated at those stations. When these restrictions are

understood, it is clear that each city to be served does not necessarily have a fleet of 148 aircraft
that can be utilised. Another factor that needs to be considered is the availability of engineering
support in the outstations. When Emirates schedules a certain aircraft to operate a route, the
engineering support in the destination station must be competent on that type. Engineers are not
necessarily licensed for all aircraft types.
Day of Operations
All of the previously discussed planning and strategies all come together on the so-called day of
operations at the NCC. The NCC directly controls all the flights and aircrafts operating on that
day. The day of operations is where all of the fluidity mentioned in earlier chapters occurs;
weather, maintenance, crew illness and other factors all come to play a part in the multiple
changes that occur throughout a day. All of these factors are controlled by the airlines departure
control system. In Emirates case, this is a system of their own called Mercator. The origins of
the data inputs for this system are from the route and schedule strategists at the outset; they build
the daily operations one to two months in advance. This is then passed onto the maintenance and
crewing departures where the flights are crewed and a plan is built to cycle aircraft through
required maintenance. Live data is received from aircrafts via ACARS, which is fed into the
Mercator system to produce a live display of the actual day.
Emirates Network Strategy Advantages
The strength of Emirates network planning of Emirates has helped build the organisation to
what it is today: a billion dollar profit company. Due to the regions of the world to which
Emirates operate, they have utilised this to their advantage. During the GFC, Emirates was more
or less untouched financially due to their ability to focus market strength in other parts of the
world. Relating back to the major traffic flows, even though there was a major downturn in
international travel in Europe and North America, the traffic flowing from Asia to Africa and
regional travel was still extremely strong.
Further advantages lie in the efficiency of their fleet utilisation, which was around 18 hours per
day according to the Emirates annual report of 2009. Emirates have their aircraft on the ground
for the minimum time required before despatching it again. The only extended ground times
were found to be for engineering or scheduling purposes. The efficient fleet allocation has also
contributed to a profitable load factor for Emirates flights. In 2010, the load factor was reported
in the Annual Report to be an industry high of 80%. This high load factor has been borne from a
strategy of matching capacity with demand and well thought-out scheduling, at least from the
perspective of this paper. Obviously, other factors such as marketing are also at play but are
irrelevant to this study.
Emirates Network Strategy Disadvantages

Even though the Emirates network strategy has brought the airline some real benefits, which
have placed them at the top of the industry, there are disadvantages as well. One such
disadvantage is the inherent inefficiency with operating a hub-and-spoke network. Operating
flights in banks causes times of at, or over, the capacity of terminal buildings, inefficient use of
manpower and infrastructure and difficulties in controlling flights on time performance. Debanking the hub would present solutions the previous problems. Capacity will be spread out
across the day and with that brings a more acceptable use of manpower. Furthermore, de-banking
will cause flight departures to be more spread out making them less susceptible to airport
congestion delays.

It has already been seen that the hub serves arrival banks and departure banks. The arrival banks
are scheduled to have a bank of departures directly following them. For some flights, this is not
the best situation from a passengers perspective, for example, passengers arrive on the first
arrival in the bank at 2200, but leaves on the last departure of the bank at 0400, that gives them a
six-hour layover in DXB. This method does however provide the most connections available
though within a reasonable amount of time.
Intelligent Misuse
Emirates controls a substantial fleet of ultra long-range aircraft: B77L and A345. These aircraft
are not used to full potential when they are deployed on services to Africa and Europe. With
reference to the literature, this is called Intelligent Misuse. The idea of intelligent misuse is to
purposefully use an aircraft on a flight for which it was not designed as a means to keep aircraft
utilisation at a profitable level (King 2007). It is not known if this is a temporary measure or one
that is more permanent. Currently Emirates ultra long-haul flights (above 15 hours) are to the
Americas. One could also argue that New Zealand flights fall within this category if the
Australian transit stop was removed. Although these flights exist, the applicable aircraft does not
operate them.
The B77W is deployed on services to LAX and SFO. Taking into account the range of the
aircraft and payload abilities, it was discovered that the airline could take quite a payload hit
regarding cargo and passenger transportation. On these routes, due to the distance being covered
by the aircraft, payload could be restricted, that is minimal cargo would be carried or not 100%
of seats can be filled. It is therefore assumed that the yields attained on the B77W not operating
at capacity are greater than operating a full B77L or A345.
Although operating ultra long-range aircraft on medium range flights surround the
underutilisation of the aircraft, if these aircraft were to be solely allocated to ultra long-range
flying, the utilisation time would be significantly decreased. The medium range flights to

Europe, Middle East and Indian Subcontinent fit perfectly in between the long haul flights; i.e.
where the B77L and A345 are used in long range flying, the way these flights are scheduled
means there is ample time between arrival and next departure to operate a regional flight
therefore increasing the utilisation.
Future Plans
According the Emirates website (2011), there have been multiple new routes announced. These
routes and the aircraft type operating them include:
Dublin, Ireland (A332)
Lusaka, Zambia (A332)
Harare, Zimbabwe (A332)
Dallas, United States (B77W)
Seattle, United States (B77W)
Rio de Janiero, Brazil (B77W)
Buenos Aires, Argentina (B77W)
These flights are not all to be operated independently. Lusaka will be a tag on flight from Harare
as is Buenos Aires from Rio de Janiero. As one would expect, these flights are scheduled to
depart and arrive into the current banks in DXB. According to Boeing (2011) and Airbus (2011),
Emirates outstanding order book currently includes 145 (A350 and A388) Airbus aircraft and 42
(B77W) aircraft. Emirates seems to be moving towards fleet consolidation based around the
B77W, A388 and A350.
summary

This chapter has described the business model and historical background of Emirates as well as
the hub and spoke model, scheduling, fleet assignment and day of operations as applied directly
to Emirates. The advantages and disadvantages of these practices have been discussed. Although
parts of Emirates operations are known ton have disadvantages, plausible reasoning for these
decisions being made has been presented.

The Difference: Hub and Spoke vs. Point to

Point
By Miyuru Sandaruwan on 22 December, 2010 in Uncategorised
Lets start The Networker with a tutorial about a question that many of newbie route network
enthusiasts may be curious on.
You may have heard about Point to Point and Hub and Spoke models in airline networks. What
do they exactly mean ? What are the use cases ? And how could they work for the success of an
airline ? Lets find out.
Point to Point
A Point to Point network is a typical route network where an airline focuses mainly on its Origin
and Destination ( O&D ) traffic.
This means that the airline is more interested in transportation of passengers originating from one
city ( A ) to another ( B ) and vice versa, but not in connecting passengers between C and B via
A.
Low Cost Carriers are considered to be pioneers of this paradigm with a classic example being
Southwest Airlines of US.
Hub and Spoke
A Hub and Spoke network is a route network where an airline will not only plan on transporting
passengers between two points, but also to connect passengers between two distant cities via its
hub.
An example of a Hub and Spoke network can be seen from the following diagram.

( Image by
elwood64151 on Wikipedia )

Imagine that as a bicycle wheel, literally. The airline uses the routes from its hub to other cities
as spokes to connect each of them via its hub.
The Hub and Spoke model originated with American Airlines, but perhaps the airline that uses it
the best in present day is Emirates Airline.
A Hub and Spoke model essentially needs to have different banks of flight departues and arrivals
in order to connect an arrival from city C, with a departure to city B, at the hub A.
This paves way for the airline to attract highly lucrative transit traffic, which at some airline
contribute more to fill a flight than O&D traffic.
However, this model is not without its downsides. Keeping flights tightly scheduled to fit this
bank might be challenging, and actually operating them on time to provide the connections might
be even more challenging.
However, the advantage, as well as the increased use of Hub and Spoke models by competitors
have forced not just many legacy full fare carriers but also Low Cost Carriers to embrace a Hub
and Spoke model.
Perhaps one LCC that does this best, is AirAsia with its three ( soon to be four ) affiliates and the
long haul unit AirAsia X. AirAsia does not provide passengers with direct connection options
( although since their latest booking engine upgrade, you can do so ) and guarantees, and it is up
to the passenger to self-connect. This saves the airline both time and money while the carriers
ever increasing network with naturally banked scheduling provides a good amount of connection
opportunities. Another LCC that seems to be following this path is FlyDubai ( IATA: FZ ) which
also provides connectivity to/from its big brother Emirates flights on selected routes.
I hope this clears out any doubts or questions you may have had about the two different main
airline route network models. Feel free to ask any questions and to share your opinion, in the
comments section.
- See more at: http://www.flightglobal.com/blogs/the-networker/2010/12/the-difference-hub-andspoke-vs-point-to-point/#sthash.hNGZY3sW.dpuf

How Sustainable is EmiratesB us in es s Mo de l?

Dubai-basedEmiratesAirline,foundedin1985withjust2leasedaircraft,isoneof thefastestgrowingandmost consistentlyprofitable
carriersinaviationhistory.Ontrac ktooperatetheworldslargestA380andB777fleets,ithasalsobecomeBoeingsandAirbussinglemost
importantcustomer.Finally,ifhistoricalgrowthtrends persist,Emirateswillbecomeoneoftheworldslargestpassengerand cargo
airlines bythe end of the next decade (at that time, Dubai might also boast the world largest airport).Nevertheless,
there is a fair amount of skep-ticismwithrespecttothecommercialviabilityandlong-termsustainabilityofEmiratesbusiness
model.Somecritics,essentiallytheCEOsofits(European)competitors,holdthatEmiratesgrowthhassimplybeentheresultofsubsidies.
Otherscitethepolitical instability of the Middle East, or argue that the buildup of vastovercapacityintheGulfregionwill
dimtheairlines prospects. In this article,we will provide a SWOT analysis of Emirates business model that needs to
be discussed in thebroadercontextofDubaisoverallgrowthand deve-lopment strategy into which it is firmly embedded.
By Andreas Knorr and Alexander Eisenkopf
A Brief History of Emirates
In 1974, three years after independece, the rulers of the UAE decided to establish a
joint flag carrier: Gulf Air .However, a tense relationship between the airline and the
Dubai government existed ever since its inception, as the latter refused to give in to
Gulf Airs demands to abandon its open-skies policy. In reaction, Gulf Air reduced
frequencies and capacities to and from Dubai by more than two thirds between1984
and 1985 without advance notice(Wilson2005). Since foreign carriers proved unable
or unwilling to fill the gap, Dubais then ruler, Sheik Mohammed bin Rashid AlMaktoum,convened a team of experts headed by Maurice Flanagan and later
joined by Tim Clark and the rulers then 26-year old son, Sheik Ahmed bin Saeed AlMaktoum to devise an emergency plan. The groups recommendation to set up a
home carrier for Dubai was quickly accepted by the ruler, but he imposed two
conditions: The new airli-ne should meet the highest quality standards and there
would be no additional capital injections from the government other than the
agreed USD 10millionstart-up capital. On October 25th,1985, Emirates first flight
departed toKarachi, using an A300,wet-leasedfrom Pakistan International
Airlines.The rest is history: in 1987, Emirates began to serve it first two European
destinations London Gatwick andFrankfurt , from 1995, it has operated an all
wide body fleet, and in 2001,2003 and 2005 Emirates placed some of the largest
aircraft orders ever. As of October 2007, Emirates route network extends to 91
destinations on all conti-nents. In its last business year,ending March 31st, 2007,
the airline transpor-ted 17.5 million passengers and 1.2milliontons of cargo on
102aircraft.Currently, 118 aircraft are on firm order (of which 20 will be allfreighters),including 55 A380 and 43 B777.
The Emirates Group
Emirates Airlines (including its cargosubsidiary Emirates SkyCargo) isonly one
division of the EmiratesGroup, a state-ownedglobally activetravel and tourism
conglomerate,which provides a plethora of aviation-related ancillary services.
Finally, theEmirates Group owns 43.6 percent of SriLankan Air lines.

The Dubai Governments aviati-on-Related Activities

Viewed from an even higher level of aggregation, the Emirates Group, inturn, is only
one element in a compre-hensive bundle of aviation-relatedactivities, allof which
come under theresponsibility of Sheik Ahmed binSaeed Al-Maktoum: (1) the
DubaiWorld Central Consortium (activity: to build Jebel Ali Airport City
includingDubais new mega-airport);(2) DubaisDepartment of Civil Aviation (activities: all aviation-related regulatory fun-ctions, operator of DXB airport, of Dubai Duty
Free and Dubai CargoVillage) and (3) Dubai AerospaceEnterprise (activities: aircraft
leasing,airport planning and management, con-sulting, maintenance and aviationrela-ted education and training).
EmiratesBusiness Model
Emirates Airline (or rather the Emirates Group as a whole) is a cruci-al element of
Dubais growth and deveopment strategy. Currently based onthe Dubai Strategic
Plan 2015 (Dubai Government 2006),its objective is to prepare the emirate for the
post-oil era by firmly establishingit as a leading tourist destination (including trade
fairs and conferences), as a center for financial, IT and professional services,as a
location for corporate headquarters and light manufacturing, and, last but not least,
as a regional transportation logistics and distribution hub (regional refers to the
area between Singapore, Europe, Southern Africa).Obviously, Dubais (and, as a
result,Emirates) spectacular growth in recent years on average, GDP increased
by13.4 percent per year since 2000, and its population is set to grow fromtodays
1.45million to around 5.4 mil-lion by 2015 (1968: 6,000!), has been helped by two
complementary factors:sound politics and its very favorablegeographical location.
The former includeits uniquely liberal (by regional standards), cosmopolitan
environment, political stability, free-trade agree-ments with most of the booming
Asian economies, world-class infrastructure, efficient public services, and very lowto
non-existent corporate and income taxes. The latter point reflects the fact no major
agglomeration on the globe is further than 8,000nautical miles away from DXB. As a
result, any two major cities on earth can be connected via Dubai with only one
stop.It is against this backdrop thatEmirates business model must be analyzed.
First and foremost, the airline plus the next to 140 carriers which serve DXB
provides excellent air links worldwide, not only for the bene-fit of Dubais thriving
tourist industry, but also of its rapidly expanding local business community
(including the thousands of foreign companies that have set up their regional
presence there). To be more specific, Emirates business model is built on the
follwing features:

A well-balanced mix of O&D- and transfer traffic in its passenger business(currently

50:50, although the intro-duction of the A380 fleet is likely to increase the transfer
passenger share to60 percent);


A very strong focus on cargo traffic,which generates 20 percent of Emirates
revenues one of the highest percentages in the airline industry (to the authors
knowledge, only LANChile tops Emirates in this segment,achieving a 40 percent
turnover share);

strong presence in those secondarymarketsthat are underserved byEmirates

competitors such as BA, LH,and AF which focuson their own hubs(London, Frankfurt,
Munich, Paris) for long-distance flights. Typical destinati-ons in this category include
Newcastle,Manchester, Birmingham, Glasgow,Dsseldorf, and Hamburg in
itsEuropean network as well as Kochin,Kolkata, Thiruvananthapuram,
andAhmedabad in India, to name just afew. Emirates competitive advantagein
these markets is enhanced by thefact that it, unlike the competition,does not have
to deploy a fleet of rather small and,hence,inefficient short-hauland even regional
air crafts for feeder flights to its hub, but can offer long-haul service standards
instead (moreo-ver, given its much longer averagestage length, Emirates is not
subject tocompetition from low-cost carriers eit-her);

strong presence in marketsthathave been largely unconnected to theglobal air

transport network, and espe-cially to the Middle East, to India,Southeast Asia and/or
Africa, for lack of a (potent) local flag carrier. Thisholds not only true forthe vast
majori-ty of Emirates 15 destinations in Northand Sub-Sahara Africa (Emirates
CEOTim Clark recently observed in aninterview with the online edition of German
weekly magazine SPIEGEL,that Africa is a ripe fruit which onlyneeds to be picked).
It also includescities like Moscow, Brisbane, Perth,So Paulo, New York, and Houston;

high frequencies: The mid-term objective is to serve most destination sat least twice
daily. Currently Emirates operates three waves atDXB, a fourth is being gradually
phased in;

high-quality service in all classes on board and on the ground including up to 600
entertainment channels in allclasses and limousine service (pick-upand drop-off) for
first and business class passengers;

high labor productivity: Accordingto a recent study by UBS, a Swiss bank, Emirates
unit costs are around40 percent lower than KLMs(Horth/Alwyn 2005), a cost
advantage that is likely to even increase after theintroduction of its A380 fleet; and

no alliance membership: In the words of Tim Clark: If we take thelong-term view,

then alliances offer asure-fire way of achieving mediocrityand reduced profitability
(as quoted by Horth/Alwyn (2005)). However,select code sharing agreements are in
place.
SWOT Analysis
Strengths
Many of Emirates strengths come fromthe right decisions taken at its
foundation,and from it sunique organizational structure. Not only does the carrier
benefit from having been created from scratch only 22 years ago, resulting inflat
hierarchies and essentially no legacy costs, but,more importantly, the central role of
aviation in Dubais development strategy also guarantees Emirates a very favorable
political environment. First and foremost, the overall responsibility of Sheik
AhmedBinSaeed Al-Maktoum for all aviation-related activities in Dubai and thelack
of a NIMBY-culture with res- pect to airport expansion or new airport projects
ensure that the airline will notin decades face infrastructure bottlenecks (which
increasingly stifle the growth prospects of its principalEuropean
competitors).Second, Emirates profits from the very low charges at its home airport.
While landing fees are by and large identica lto those at major European airports, no
airline flying into DXB has to pay any additional charges (such as noise charges, ATC
charges, security charges etc.). This is because the airport infra-structure and all
related services are provided by Dubais government and fully financed from the
state budget.Itis a hotly debated issue whether this particular fee regime is a form
of indirect subsidy to Emirates. Judged against the EUs state aid rules, thiswould
clearly not be the case since Dubai operates an open-skies policy and all airlines are
subject to the samenon-discriminatory treatment. From an economic perspective,
the lower over-all level of charges at DXB might result from a variety of reasons:
cost savings due to higher factor productivity, the non-existence of a double markup (as a result of the central manage-ment of Dubais aviation interests by sheik
Ahmed bin Saeed Al-Maktoum),monopoly rents enjoyed by other hub airports at the
disadvantage of their air-line clientele, and lower marginal damage costs of noise
pollution inDubai (because of different ecological preferences).Third, Emirates like
all other companies doing business in Duba ior, for that matter, in most Gulf states
bene-fits from Dubais low tax regime,which only subjects subsidiaries of foreign
banks and energy companies to corporate tax. Obviously, this is an advantage as
long as the company remains profitable. As ordinary citizens including expats do not
pay inco-me tax either, and enjoy generous government-financed social

benefits,too, Emirates is a very attractive employer paying above average net

wages although gross wages are lower than in Western countries.Fourth, Dubais
immigration laws are quite generous by international stan-dards. This does not only
hold for for-eign experts who may be easily recrui-ted by local firms. It also applies
to transit passengers who do not have toclear immigration at DBX when changing
planes. While this might appear to be a negligible fact at first sight, it greatly
improves Emirates competitive position on quite a few routes. A good example
would be trips from Brazil to Japan (1.2 million Brazilians are of Japanese descent).
On this route,three almost equidistant itineraries via the USA, Europe and DXB are
available, one of which via the USA requires a transit visa. Another exam- ple
would be the UKs restrictive and complicated transit regulations for residents of
some Asian countries en route to the USA even if they do not leavethe airport while
in transit.Fifth, another of Emirates strong pointis its award-winning service in all
clas-ses,which is matched or exceeded only by very few other carriers such
asSingapore Airlines. Sixth, clever mar-keting for example, Emirates, notLufthansa
was named official carrier of the 2006 FIFA World Cup hosted by, Germany has
created a very strong brand awareness worldwide. Finally,since the UAEs currency
is firmly pegged to the US dollar, Emirates has benefited, at least in recent years,
froman additional devaluation-related cost advantage, especially vis--vis its
Eurozone-based rivals.
Weaknesses
It is almost impossible for outsiders to discern any relevant weakness.However,
although notoriously unre-liable as a source, some posters on travel-related internet
blogs are complaining about(allegedly) slipping service standards in general and
lack of consi-stency in service quality in particular. Indeed, Emirates was less
successful recently in winning Skytraxx and other awards for outstanding service
quality.
Opportunities
Clearly the most important contribu-ting factor to Emirates success,and a huge
opportunity for future growth,Is Dubais very favorable location. Some3.5billion
people live within eight flight hours. Moreover, Dubai is placed right at the
crossroads of some major passenger and cargo flows, e.g. Asia(China/India)-Africa,
Europe-Southeast Asia, Europe-Australia/New Zealand, India-North America, the
economic importance of which is set togrow in parallel with the rise of the near-by
emerging economies. In additi-on, DXB has become a major and frequently timesaving connecting point for passengers (and cargo) trave-ling from secondary
cities, especially in Western Europe, en route to Australasia and even Africa. In fact,
for passengers flying from, say, Hamburgto Sydney, Emirates offers a one-stop
connection instead of at least two stops on almost all Oneworld, Skyteam or Star
Alliance routings. And for flights to Asia, Emirates offers the same one-stop service
as its European rivals, butto a larger number of destinations).What is more, not only

has the UAEs government has been very successful in negotiating free-trade
agreementswith all major economies from the USA to the emerging markets of
Asia(though not with a reluctant EU),which are very likely to further increa-se
demand for air travel to and from theUAE. What is more, the entire Arabian
peninsula has been one of the fastestgrowing regions worldwide. Since many
neighboring countries,including gthe most populous one, Saudi Arabia,have
embarked on a progressive libera-lization of their air transport markets,new
opportunities for growth exist for Emirates also in its home region.Finally, Emirates
decision to operate ahuge fleet of A380 aircraft will enablethe airline to continue to
grow at all slot-constrained airports it serves, too including all of its European
competi-tors main hubs.
Threats
From the point of view of most for-eign, in particular North American, observers, the
(alleged) political insta- bility of the Middle East, poses by far the biggest threat to
Emirates growth.However, this perception is clearlynot based on hard facts with
respect to he Gulf states, and recent history tellsa different story as well. Although
also affected by severe regional politi-cal crises even early in its start-up period
Iraqs invasion of Kuwait and the latters liberation soon after cross ones mind ,
but also by more recent events like the wars in Afghanistan and Iraq, as well as the
outbreak of SARS, Emirates has so far proven its robustness.A much more likely
threat is the increasing lobbying by some of its competitors in core markets such a
Australia, France and Germany, as wellas in largely untapped ones like Canada, for
legal protection against Emirates expansion on their hometurf. For instance,
Lufthansa is vigo-rously campaigning against Emirates plans to serve Berlin and
Stuttgart even though the operators of these two air- ports have long attempted to
attract more intercontinental services which Lufthansa has been unwilling to provide, or, in the case of Berlin, has been unable to provide profitably. Nevertheless, it is
the very aggressive growth plans of some other Gulf-based carriers, most notably of
Qatar Airways and Abu Dhabi-based Etihad Airways, that might pose the most
serious future threat to Emirates. Qatar Airways currently operates a fleet of 57
aircraft with another 113 on firmorder, and Etihads fleet comprises 25widebodies
(plus 21 aircraft on order).While Qatar Airwayscatch-up stra-tegy with Emirates
seems to rely large-ly on undercutting its competitor while offering similar product
quality, Etihads expansion might prevent Emirates from obtaining much needed
traffic rights to countries that do not pursue an open-skies policy (note that both
Emirates and Etihad are UAE- based carriers). What is more, both the Qatari and
Abu Dhabis governments(i.e. ruling families) have devoted huge budgets to the
expansion of their local airport facilities. By 2008, Dohas air- port will be able to
handle 50 million passengers (compared to todays 6 mil-lion), while Abu Dhabis
airport will be upgraded to 40 million pax (9milliontoday) in addition to a
substantial expansion of cargo facilities. It remains to be seen whether this
unprecedented buildup of capacity by two (still)unprofitable regional competitors

(andtheir government owners) will have a negative impact on Emirates in thelongrun.

Conclusion
Emirates success is clearly not built on sand. In fact, it is based on a hard-toemulate mix of an excellent geogra- phic location and outstanding manag-ment,
embedded in an ambitious,visionary development master plan. Nor is it unique. In
many respects,strong similarities exist between Emirates approach and Singapore
Airlines rise from a small regional player to a global power housein the airline
industry only a few decades ago. It therefore seems reasonably safeto conclude that
Emirates is writing another of the very few success stories in the history of civil
aviation