EK/EY/QR/SV | Gulf States Based-Carriers

[hkskyline]

An Airline With A Deafening Roar
Why Dubai's fast-growing Emirates gets to call the shots with Boeing and Airbus
By Carol Matlack, with Stanley Holmes in Seattle
27 March 2006
BusinessWeek

Habib Fekih was traveling in the Mideast as a salesman for European planemaker Airbus in 1985, the year Dubai's ruling family set up a dinky airline called Emirates to shuttle Pakistani workers between Dubai and Karachi aboard two leased planes. "Nobody believed Emirates could be a successful airline,'' recalls Fekih, who now heads Airbus' Mideast subsidiary. "It was the joke of the day.''

Nobody's laughing now. Emirates today is the world's 10th-largest airline, winning praise for top-notch service as it expands everywhere from New York to New Delhi. And it's buying airplanes at an astounding rate, with $37 billion on order and billions more expected soon. No other carrier's order book comes close. That gives Emirates unparalleled clout with Airbus and Boeing Co., the more so because Emirates buys only widebodies, the aircraft makers' most profitable models. Indeed, Emirates is already forcing Airbus and Boeing to design new widebody planes to its specifications and to undertake costly revamps of existing models.

Following the Dubai Ports World controversy, could Emirates use that power to hurt U.S. exports by steering multibillion-dollar orders to Airbus instead of Boeing? Aviation industry experts say Dubai's rulers are unlikely to let politics sway their purchasing decisions.

But Emirates and its blunt, British-born president, Tim Clark, sure know how to make suppliers sweat. He recalls that when Boeing was considering launching its new long-range 777-300ER, its program chief, Lars Andersen, ``came to me and asked, 'What do I need to do to get you to buy this plane?''' In exchange for carte blanche on design specs, including size and flying range, Emirates ordered 46 of the new planes, more than any other carrier. ``Clark knows what he wants, and we listen,'' says Scott Carson, Boeing's executive vice-president for sales.

In hopes of snaring orders for 40 to 60 planes from Emirates, Airbus has reworked plans for its new A350 with a new wing design and other modifications that have added more than $1 billion to development costs. Boeing, with its 787 Dreamliner competing for the same order, could buckle to pressure from Clark to develop a stretch model with up to 310 seats. Clark is warning Airbus that if it doesn't spend millions to improve the fuel efficiency of its A340-600 jet, Emirates could cancel or delay its $4 billion order. ``Oh yes, we are working them over,'' he says. While most airline executives keep mum about their talks with the planemakers, Clark steps up the pressure by speaking openly about his demands.

DOUBLE-DECKERS

This upstart has buying muscle, all right. And with a fleet set to grow from 80 to more than 150 planes by 2012, including 45 of Airbus' new A380 double-decker megaplanes, Emirates can keep expanding from its Dubai hub. But could that projected growth prove to be a mirage? Dubai's population is only 1 million, and Emirates is still a fraction the size of the top U.S. and European carriers. If growth stalls, billions in Boeing and Airbus orders could evaporate.

Not likely. Clark and Emirates Chairman Sheikh Ahmed bin Saeed al-Maktoum have shrewdly developed Dubai as a hub linking Europe and the U.S. with booming Asian markets. Clark, who has run Emirates since its founding, is a veteran airline executive who has lived in the Mideast for 30 years. The carrier posted $637 million in profits last year on $4.9 billion in sales. Its flights are 70% full, on average, a healthy ratio. Travelers rave about extras such as a 200-channel in-flight entertainment system. "It's like the difference between a motel and a really nice hotel,'' says Fred Watts, a businessman waiting in Emirates' sumptuous lounge at John F. Kennedy International Airport in New York.

There are some clouds on the horizon. Mideast political instability is a constant worry, and as other carriers acquire longer-range aircraft, Dubai's attraction as a hub could diminish. But for now, Emirates looks set to stay on course -- and to keep buying those planes.

[Monkey]

Yeah I think Emirates is a phenomena. Etihad, Qatar, and Gulf Air are going down the same route. European and Asian airlines just cannot compete on prices. The Gulf carriers pay their staff pittance (and they have no union rights) and get subsidised jet fuel from the state. They buy loads of huge planes and just dump capacity on the long haul routes so that all the other airlines have to scale back their operations. To be honest I'm not particularly keen on this trend as it threatens to swamp and undercut the non-stop services from Europe to Asia I prefer. Hopefully a new generation of European and Asian long-haul LCCs can match Emirates's prices and keep the non-stop services competitive for economy leisure travellers like me. Hong Kong's forthcoming Oasis Airlines is one such pioneer.

[Luka]

This pictures shows the power of Emirates

[Ben_Burj]

Originally Posted by Monkey

Yeah I think Emirates is a phenomena. Etihad, Qatar, and Gulf Air are going down the same route. European and Asian airlines just cannot compete on prices. The Gulf carriers pay their staff pittance (and they have no union rights) and get subsidised jet fuel from the state.

on the pay your are not right, at least for emirates I know that they pay extremly good salaries. what make the difference is that they don't pay any taxes and here is where they can make enormous saving compared to european airline companies.

[scorpion]

fascinating to learn some backstory and business modeling re: Emirates~~


cheers from california everyone

[SLAA]

I notice that Skytrax doesn't rate Emirates as a five star airline...Not sure, but isn't Emirates known well for their lavish service?????

This also leads me to believe that Skytrax is not a total scam, because forumers have said before that they believed that airlines paid to get their rating, and I am sure if there was an airline like Emirates, they would pay BIG BUCKS to get that ranking...

Any thoughts on both these question....This is starting to be like two threads in one!

SLAA

[yrkn]

emirates is good from the outside
but it does have a lot of flaws going on

[crazyeight]

Not really, it's not that bad. Their business class and first class is top notch, it's just their economy class which is lacking. Overall, it's not bad, it still is a 4 star airline.

[Luka]

I’ve have flown Emirates twice (and once I got upgraded to business ). Their service is fine but its a big airline it depends what kind of cabin crew you get. Some might be tired, over worked and not that pleasant while others could be great. Seat wise I don't know why they didn't make a flat bed in business if they went through the process of changing everything in the cabin. Economy class was quite good comparing to other airlines I have been on. Offcourse the first class suites look fantastic and probably are comfort wise as well. The problem is that not all aircrafts have such good seats (basically inconsistent product). A340-500's and B777-300's have suites in first class but when you change an aircraft to an A330 the seats are like the ones you would have in business class 4 years ago and that causes disappointment for a lot of travellers.
Overall I think it is a good airline. Their entertainment is certainly one of the best in the sky and catering is not bad either.

[samsonyuen]

Who are the highest rated airlines? Are there any five star ones?

[ignoramus]

Originally Posted by samsonyuen

Who are the highest rated airlines? Are there any five star ones?

http://www.airlinequality.com/StarRanking/5star.htm
Qatar Airways
Singapore Airlines
Cathay Pacific Airways
Malaysia Airlines

[MCarr]

I have heard that the pitch in emirates is very bad

[Bertez]

There 777 have amazing pitch....34 i think. However, they are 10 abreast.......

[SLAA]

I decided to declare that I feel that airlines can't use the fact that they are a big airline as an excuse...Its their responsibility, knowing they are a huge airline, that their service should be top notch, and knowing an airline like Emirates with all the money they have flowing in every second, I feel that they should use that money wisely . This is why I dont see why Emirates is not a 5 star airline!!!!!

Still congrats for becoming such a huge airline in just over 25 years!

[classhopper]

It's 4.99-star airline, but not reach 5.

[samsonyuen]

I remember flying Malaysia, and what annoyed me most was that it had a bad pitch.

[Frog]

The economy I though was quite good compared to other times I have flown (Korean Air and Air France)I liked the food and entertainment, but the seating was really the only bad thing, I found it very cramped and uncomfortable.

[yrkn]

the real economy class can only be commented on if you flew in EK
wat they have on paper cannot be used to draw conclusions.

[Maltaboy]

EK is a superb airline with some areas that could use improvement, but I do believe it should be considered a five star airline.

I also think you, SLAA are a very interesting forumer.

[zee]

i have a cousin that works for Qatar Airways n he told em that the reason they have never achieved that status is because of the level of complaints

and also because of passenger votes