We have no intention to delay or cancel orders
Sheikh Ahmed Bin Saeed AlMaktoum, the US-educated 50-year-old Chairman of the Emirates Group, which operates the Dubai-based international carrier Emirates, believes that the airline is “one of the vehicles on whose virtue Dubai has reached where it has today”.
Sheikh Ahmed Bin Saeed AlMaktoum, the US-educated 50-year-old Chairman of the Emirates Group, which operates the Dubai-based international carrier Emirates, believes that the airline is “one of the vehicles on whose virtue Dubai has reached where it has today”. With over 128 aircraft in service and a further 220 on order, including 54 Airbus A380s, Emirates is already the eighth largest airline in the world in terms of passengers carried and fifth-largest in terms of passenger kilometres flown. In an exclusive interview, Sheikh Ahmed speaks to Business Today’s Kushan Mitra on the airline’s future and whether it wants to be the largest in the world. Excerpts:
Do you believe Dubai would have become the city it has without Emirates?
It is a chicken-and-egg situation. I must say that Dubai started before Emirates, but yes, Emirates is one of the vehicles on whose virtue Dubai has reached where it has today. But Dubai in itself will always be the main focus for investors.
Dubai is suffering from a major real estate crisis nowadays. As a ruling family member, what do you think caused this crisis?
This crisis is not unique to Dubai; it is a function of the market. This is the case in India, the rest of the Gulf states, the whole of the Middle East, in Europe and in America. It is the market, it goes up and down, and at the end of the day, I believe, that Dubai will continue to do well.
Do you foresee a recovery in the Dubai real estate market?
Definitely. However, as I said, global market conditions are weak and Dubai is a part of the global market. When things improve, Dubai’s market will also improve.
Emirates’ rise from a small airline with just two planes to one of the world’s mega-carriers has been viewed with envy by other airlines, who insinuate all kinds of reasons for its success. How would you answer such allegations?
You know, I think, they think because we are a Gulf state carrier, it is all oil money… (that) has been injected into the airline… but the truth is that Dubai does not have much oil, (which accounts for) less than three per cent of our GDP. And that money has not been pumped into the airline.
How much of a problem is the politics of aviation for an airline like yours, not just in India but across the world?
Aero-politics is a problem for all airlines who want to keep up their pace of growth (going) at a thousand kilometres an hour. There is politics, there are lobbies. But I think it is manageable. If you try, you will get what you want, and this has been our experience over the past two decades. We find this in India, in France, in Australia, in Saudi Arabia, in so many places where they feel that protection is right for their country. But if you prove to them that this is not the case, that the world is changing, we see more flexibility in many countries. Look at Canada. For many years, we have wanted more access to the Canadian market, and even today we haven’t succeeded. But we will keep on trying till we succeed one day.
2008 was a bad year for the airline industry with oil close to $150 a barrel. The International Air Transport Association outlook for 2009 is quite negative. What’s your outlook for 2009?
I think everybody is hoping that by the end of 2009 or early 2010 things should improve. Whether oil will go up again is a milliondollar question, I don’t think anyone knows. We all want oil at a reasonable price because if the price of oil goes up, it impacts the passenger. And we want people to fly.
How do the two large aircraft manufacturers— Airbus and Boeing—treat you, you’re a marquee customer for both of them?
You have to look at it this way: After September 11, 2001, how many airlines ordered planes? People thought that this was the worst time. We ordered planes and we enjoyed that for the last six years. Today, it is similar, people are asking how will we survive? But honestly, this (the crisis) is only for a short period of time, the world will move on and people will forget about it.
So, you are not going to delay or cancel your orders like some Indian carriers have done?
Not at all. We have no intention to delay or cancel orders.
How important will the Indian market be for low-cost carrier FlyDubai that you have planned for 2009?
I don’t think it will be important for just the Indian market, but all markets within four-and-a-half hours out of Dubai, to fill the gaps that we are unable to fill today with Emirates.
Why did you feel the need for a lowcost carrier? Was it because of the success of Sharjah’s Air Arabia?
That is not the case. We had been toying around with the idea of a low-cost carrier for quite a while. I believe there is an audience within four hours of flight time who want such an option. However, while FlyDubai is currently a subsidiary of Emirates, going forward it will be an independent carrier.
You have faced tremendous competition over the past few years from a whole slew of new Gulf airlines, particularly Etihad and Qatar…
I think the market is large enough for everyone to do well…
The Dubai press has been speculating that Emirates and Etihad will be merged…
That is just speculation.
You have grown so large. Is there any ambition to become the #1 airline in the world, given that you have 54 more Airbus A380s on order?
The focus has always been on profitability and profitable growth rather than the express desire to be the largest airline in the world. I think that is more of an accident rather than by design.
And do you plan to operate the Airbus A380 to India?
We will be receiving our fourth aircraft soon and initially there are no plans to operate the aircraft to India. But later on, as India builds up the infrastructure to support the aircraft with new airports and if we see the demand for seats, we will definitely operate the aircraft into India. But you have to keep in mind that in India we are not limited by number of flights we can operate but by the number of seats we can offer, and the Airbus A380 will have a lot more seats than the Airbus A330 and Boeing 777 we use today. So that will have to be resolved.
Sheikh Ahmed bin Saeed al-Maktoum
It is a chicken-and-egg situation. I must say that Dubai started before Emirates, but yes, Emirates is one of the vehicles on whose virtue Dubai has reached where it has today. But Dubai in itself will always be the main focus for investors.
Dubai is suffering from a major real estate crisis nowadays. As a ruling family member, what do you think caused this crisis?
This crisis is not unique to Dubai; it is a function of the market. This is the case in India, the rest of the Gulf states, the whole of the Middle East, in Europe and in America. It is the market, it goes up and down, and at the end of the day, I believe, that Dubai will continue to do well.
Do you foresee a recovery in the Dubai real estate market?
Definitely. However, as I said, global market conditions are weak and Dubai is a part of the global market. When things improve, Dubai’s market will also improve.
You know, I think, they think because we are a Gulf state carrier, it is all oil money… (that) has been injected into the airline… but the truth is that Dubai does not have much oil, (which accounts for) less than three per cent of our GDP. And that money has not been pumped into the airline.
How much of a problem is the politics of aviation for an airline like yours, not just in India but across the world?
Aero-politics is a problem for all airlines who want to keep up their pace of growth (going) at a thousand kilometres an hour. There is politics, there are lobbies. But I think it is manageable. If you try, you will get what you want, and this has been our experience over the past two decades. We find this in India, in France, in Australia, in Saudi Arabia, in so many places where they feel that protection is right for their country. But if you prove to them that this is not the case, that the world is changing, we see more flexibility in many countries. Look at Canada. For many years, we have wanted more access to the Canadian market, and even today we haven’t succeeded. But we will keep on trying till we succeed one day.
2008 was a bad year for the airline industry with oil close to $150 a barrel. The International Air Transport Association outlook for 2009 is quite negative. What’s your outlook for 2009?
I think everybody is hoping that by the end of 2009 or early 2010 things should improve. Whether oil will go up again is a milliondollar question, I don’t think anyone knows. We all want oil at a reasonable price because if the price of oil goes up, it impacts the passenger. And we want people to fly.
The route to #1 |
How do the two large aircraft manufacturers— Airbus and Boeing—treat you, you’re a marquee customer for both of them?
You have to look at it this way: After September 11, 2001, how many airlines ordered planes? People thought that this was the worst time. We ordered planes and we enjoyed that for the last six years. Today, it is similar, people are asking how will we survive? But honestly, this (the crisis) is only for a short period of time, the world will move on and people will forget about it.
So, you are not going to delay or cancel your orders like some Indian carriers have done?
Not at all. We have no intention to delay or cancel orders.
How important will the Indian market be for low-cost carrier FlyDubai that you have planned for 2009?
I don’t think it will be important for just the Indian market, but all markets within four-and-a-half hours out of Dubai, to fill the gaps that we are unable to fill today with Emirates.
Why did you feel the need for a lowcost carrier? Was it because of the success of Sharjah’s Air Arabia?
That is not the case. We had been toying around with the idea of a low-cost carrier for quite a while. I believe there is an audience within four hours of flight time who want such an option. However, while FlyDubai is currently a subsidiary of Emirates, going forward it will be an independent carrier.
You have faced tremendous competition over the past few years from a whole slew of new Gulf airlines, particularly Etihad and Qatar…
I think the market is large enough for everyone to do well…
The Dubai press has been speculating that Emirates and Etihad will be merged…
That is just speculation.
You have grown so large. Is there any ambition to become the #1 airline in the world, given that you have 54 more Airbus A380s on order?
The focus has always been on profitability and profitable growth rather than the express desire to be the largest airline in the world. I think that is more of an accident rather than by design.
And do you plan to operate the Airbus A380 to India?
We will be receiving our fourth aircraft soon and initially there are no plans to operate the aircraft to India. But later on, as India builds up the infrastructure to support the aircraft with new airports and if we see the demand for seats, we will definitely operate the aircraft into India. But you have to keep in mind that in India we are not limited by number of flights we can operate but by the number of seats we can offer, and the Airbus A380 will have a lot more seats than the Airbus A330 and Boeing 777 we use today. So that will have to be resolved.
