Emirates will be World’s Biggest Airline

Note: I have submitted a copy of this post to the UAE community blog.

Last month, German Wirtschaftswoche featured a very good analysis
about the prospects of Emirates Airline. For all non-German-speaking readers, I’ve picked the highlights for you:

Gary Chapman, director of finances and human resources at Emirates Group:

“We will grow both our total revenue and the number of our passengers at 20 percent annually for the next 10 years.”

Let’s do the math: (1.2)^10 = 6.19: By 2016, Emirates will be more than six times as big as it is now – provided Chapman is right, of course. But, you may ask, how big is Emirates now? Because, well, six times nothing is still nothing, right? Not so fast: With total revenues at 6.3 billion US-dollars, Emirates already ranks 19th worldwide. Compared to 26 billion dollars of Air France-KLM, currently the world’s biggest airline (in terms of total revenues), this doesn’t look bad at all. Especially when you consider that Emirates grows at a much faster rate than the biggies – while beeing much more profitable, too. The article quotes analysts from Swiss-based bank USB:

in 2010 Emirates will be the biggest long-distance airline in the world and in 2015 the biggest airline overall.

More interesting stuff from the article:

• Emirates won’t go public any time soon. It’s CEO, Tim Clark, proudly declares that their cash reserves are so high that they could even fly for half a year without charging a single passenger.
• The airline won’t join a flight alliance like Star Alliance – because they think this would hinder their growth.
• Over the next five years, Emirates will invest more than 500 million euros in sports sponsoring.
• Within ten years, Emirates will connect its homebase Dubai with every major city in the world.
• Unlike its competitors, Emirates only uses big airlines, which translates into better comfort.
• Their cost-structure is similar to low-cost airlines: flat hierarchies, relatively low salaries (at least when compared to their European and American competitors).
• Last, but not least, they are located in Dubai, which means low or non-existent taxes and cheap kerosene.

All in all: Tough times are coming for Emirates’ competitors! And golden times for Dubai: Some of the passengers that are routed through the city by Emirates will always stay in the City, contributing to it’s meteoric rise. By the way: Dubai is currently constructing the biggest airport in the world.