Emirates Airlines flying high - fast
Emirates Airlines flying high - fast
CASH-RICH: Sheikh Ahmed has been given $125 billion to spend on aviation.
View more photos
PARIS - THE chairman of Emirates Airlines - Sheikh Ahmed bin Saeed Al-Maktoum of the ruling family of Dubai - has grand ambitions, and a bankroll to match.
He has a huge pot of money to spend - US$82 billion (S$125 billion) from his government, the airline and other financiers.
He has ordered 55 superjumbo A-380s to create the biggest fleet of these double-decker planes in the world. And he wants to make Dubai, a sheikhdom by the sea, the busiest airline hub in the world, overtaking London, New York or Singapore.
It would be easy to dismiss such spending as a rich man's folly, but Sheikh Ahmed, so far, has delivered on his word.
He built Emirates from a two-plane operation, starting with US$10 million in 1985, into the world's eighth-largest international carrier, with 105 planes, all wide-bodies.
Emirates is the world's fastest-growing airline - it will take delivery of one new Boeing or Airbus plane a month for the next five years - and is one of the few to be consistently profitable, with ambitions to become even larger still.
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Changing landscape
'We have never seen anything like it before,' said Mr Robert Cullemore, a consultant at Aviation Economics, a London advisory firm. 'We have never seen growth at this rate.'
At the recent Paris Air Show, Sheikh Ahmed met Airbus chief executive Louis Gallois and added eight more A-380s, with a list price of US$2.6 billion, to his fleet.
He held a news conference to publicise Dubai's plan to spend US$82 billion on aviation, including building a new US$33 billion Dubai World Central International Airport that will have six runways and, at twice the size of Hong Kong Island, will become the world's largest airport complex.
'What we are witnessing today is the rewriting of the world's aviation history, and the beginning of a new era of global aviation,' he said at the time.
Being oil-rich helps. Emirates Airlines, said Mr Howard Rubel, an aerospace analyst with Jefferies & Co, 'has got cash, clout and cache'.
Aviation has helped transform Dubai, a desert trading post with hardly a paved road just 50 years ago, into a place where 25.6 million people flew in last year.
Oil now represents only 5 per cent of Dubai's economy, which increasingly relies on revenue from super-luxurious hotels, a growing financial centre and on serving as the regional headquarters for global brands.
Oil services company Halliburton, for instance, is moving its headquarters from Houston to Dubai. Universal Studios, Nickelodeon, Microsoft and Cisco are also setting up offices.
Dubai is on a US$365 billion building spree - and development means more flights. Construction includes the Burj Dubai, the world's tallest building, and the Mall of Arabia, the world's largest shopping mall.
In an interview at the luxurious Bristol Hotel in Paris, Sheikh Ahmed, 49, said the airline's growth matches the frenzied development in the 3,885 sq km emirate.
'When we started talking about expanding our airline, people thought we were bluffing or that it would take 20 to 30 years. But we have proven them wrong,' he said.
Emirates Airlines earned US$844 million on revenues of US$8.1 billion for the fiscal year ending last March.
As the ruling family is also the government - current ruler Sheikh Mohammed bin Rashid Al-Maktoum is Sheikh Ahmed's nephew - there is a minimum red tape, and decisions can be implemented quickly.
The airline also benefits from an enviable location. It bases its strategy on the fact that its planes can reach any point on the globe non-stop from Dubai and can connect any two city pairs with just one stop in the Middle East.
'Airlines like the Emirates are pushing for the latest and greatest. It is making an obvious distinction with American carriers that are nickle-and-diming the passengers,' said Mr Jon Kutler, head of Admiralty Partners, a Los Angeles aerospace private equity company.
Sheikh Ahmed, who was educated in Britain and the United States, believes the aviation market will inevitably grow and keep Emirates flying high despite the intense competition.
'You talk to someone six to seven years back, and they said that if fuel reached US$70 a barrel, no one would be flying. But now, we are seeing prices at up to US$75 and US$77 a barrel, and we do not see any kind of a decline. The demand is there and will continue to be there.'
NEW YORK TIMES
CASH-RICH: Sheikh Ahmed has been given $125 billion to spend on aviation.
View more photos
PARIS - THE chairman of Emirates Airlines - Sheikh Ahmed bin Saeed Al-Maktoum of the ruling family of Dubai - has grand ambitions, and a bankroll to match.
He has a huge pot of money to spend - US$82 billion (S$125 billion) from his government, the airline and other financiers.
He has ordered 55 superjumbo A-380s to create the biggest fleet of these double-decker planes in the world. And he wants to make Dubai, a sheikhdom by the sea, the busiest airline hub in the world, overtaking London, New York or Singapore.
It would be easy to dismiss such spending as a rich man's folly, but Sheikh Ahmed, so far, has delivered on his word.
He built Emirates from a two-plane operation, starting with US$10 million in 1985, into the world's eighth-largest international carrier, with 105 planes, all wide-bodies.
Emirates is the world's fastest-growing airline - it will take delivery of one new Boeing or Airbus plane a month for the next five years - and is one of the few to be consistently profitable, with ambitions to become even larger still.
RELATED LINKS
Changing landscape
'We have never seen anything like it before,' said Mr Robert Cullemore, a consultant at Aviation Economics, a London advisory firm. 'We have never seen growth at this rate.'
At the recent Paris Air Show, Sheikh Ahmed met Airbus chief executive Louis Gallois and added eight more A-380s, with a list price of US$2.6 billion, to his fleet.
He held a news conference to publicise Dubai's plan to spend US$82 billion on aviation, including building a new US$33 billion Dubai World Central International Airport that will have six runways and, at twice the size of Hong Kong Island, will become the world's largest airport complex.
'What we are witnessing today is the rewriting of the world's aviation history, and the beginning of a new era of global aviation,' he said at the time.
Being oil-rich helps. Emirates Airlines, said Mr Howard Rubel, an aerospace analyst with Jefferies & Co, 'has got cash, clout and cache'.
Aviation has helped transform Dubai, a desert trading post with hardly a paved road just 50 years ago, into a place where 25.6 million people flew in last year.
Oil now represents only 5 per cent of Dubai's economy, which increasingly relies on revenue from super-luxurious hotels, a growing financial centre and on serving as the regional headquarters for global brands.
Oil services company Halliburton, for instance, is moving its headquarters from Houston to Dubai. Universal Studios, Nickelodeon, Microsoft and Cisco are also setting up offices.
Dubai is on a US$365 billion building spree - and development means more flights. Construction includes the Burj Dubai, the world's tallest building, and the Mall of Arabia, the world's largest shopping mall.
In an interview at the luxurious Bristol Hotel in Paris, Sheikh Ahmed, 49, said the airline's growth matches the frenzied development in the 3,885 sq km emirate.
'When we started talking about expanding our airline, people thought we were bluffing or that it would take 20 to 30 years. But we have proven them wrong,' he said.
Emirates Airlines earned US$844 million on revenues of US$8.1 billion for the fiscal year ending last March.
As the ruling family is also the government - current ruler Sheikh Mohammed bin Rashid Al-Maktoum is Sheikh Ahmed's nephew - there is a minimum red tape, and decisions can be implemented quickly.
The airline also benefits from an enviable location. It bases its strategy on the fact that its planes can reach any point on the globe non-stop from Dubai and can connect any two city pairs with just one stop in the Middle East.
'Airlines like the Emirates are pushing for the latest and greatest. It is making an obvious distinction with American carriers that are nickle-and-diming the passengers,' said Mr Jon Kutler, head of Admiralty Partners, a Los Angeles aerospace private equity company.
Sheikh Ahmed, who was educated in Britain and the United States, believes the aviation market will inevitably grow and keep Emirates flying high despite the intense competition.
'You talk to someone six to seven years back, and they said that if fuel reached US$70 a barrel, no one would be flying. But now, we are seeing prices at up to US$75 and US$77 a barrel, and we do not see any kind of a decline. The demand is there and will continue to be there.'
NEW YORK TIMES
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