The recent forecast by the International Air Transport Association (IATA) points to the decreasing profitability of MENA carriers in 2011, mainly due to increased capacity which does not meet regional demand, although market players are predicted to record US$400 million profits in 2010.
Infrastructure developments within the air transportation sector are the focus of many governments in the Middle East which according to IATA include eight new runways in the Gulf at the cost of US$100 billion.
Many national carriers increased flight frequencies and added new routes in 2010, although few invested in communications or advertising. The Middle East’s air transportation sector saw continued growth in traffic, the fastest in the world throughout the crisis, spearheaded by the UAE.
Airlines in the Middle East region are seeing a rise in demand for air travel and thus the likes of Emirates and Air Arabia, who are championing the development of the sector in the region, are confidently ordering more aircraft.
As the UAE emerges from the crisis, Emirates Airlines is becoming one of the most profitable and fastest growing airlines in the world. The airline remains number one in the UAE, the longest running and also the most profitable in the region.
The player is not only committed to protecting its route network, but also sought to expand it even during the crisis. The strategy to become a global airline, joining a myriad of different global destinations transiting through Dubai, remained a priority with the network of destinations reaching 105 as Emirates added Tokyo among another 5 routes in 2010.
Cost control strategy
The carrier’s main strategy is to keep a close watch on its costs and this aspect of its operations became even more pertinent throughout 2009 and 2010, amidst the global economic downturn. The company continued to look at a range of measures to keep costs down and improve efficiency. These include reviewing supplier contracts, encouraging staff to suggest ideas for cost-savings and suspending non-urgent projects.
Growth, quality, performance and sustainability remain staples of the company’s goals. Emirates’ order for the Airbus A350 XWB super-long range and super efficiency aircraft will enter the fleet from 2014. Early in the year, the airline ordered 30 Boeing 777-300ER aircraft for US$9.1 billion.
Bearing the fruits of hard work
Emirates has built up a strong brand name as a trendsetter in aviation, particularly in terms of service excellence, coupled with consistent profitability. In 2009, Emirates was voted the second best First Class by Skytrax and in 2010 the airline was voted the eighth best airline in the world by Skytrax.
The airline ranks amongst the top 10 carriers worldwide in terms of revenue, passenger kilometres, and was the largest airline in the Middle East in terms of revenue, fleet size, and passengers carried since the year 2007. In 2010 the airline was the sixth largest airline in the world in terms of international passengers carried and largest in the world in terms of scheduled international passenger-kilometres flown.
Luxury at its best
Emirates has a frequent flyer programme that provides a variety of awards to its members and is also strongly positioned as a luxury airline as it focused strongly on improving its first class and business class.
The airline’s first class passengers have access to a full suite, complete with closing doors to ensure privacy, a mini-bar, a coat rack and storage. They also have a 23in LCD screen. The seats in first class convert into a 2m fully flat bed which is ideal for long distance traveling.
The remaining fleet feature “Skycruiser” flat beds with integrated passenger seat control, along with the ICE system and a 19in screen. First class seats sometimes include a personal minibar. The newly delivered A380-800, first class features private suites, two shower-equipped lavatories and a spa, along with access to the first and business class bar area and lounge.
The sky is high
Emirates Airlines’ business fundamentals are strong and the company was already highly competitive before the downturn hit Dubai. The breadth and global spread of its business helped shield Emirates from the impact, allowing it to adjust its operations to focus on higher-growth, higher-yield markets and specific business areas.