EMIRATES' SUCCESS STORY WORTH WRITTEN IN GOLD
June 05 - 11, 2006
Nothing succeeds like success. The saying truly reflects in the success story of Emirates, which had started its journey with meagre resources to reach the enviable status what it enjoys today.
Emirates' first flight was landed at Karachi airport some 20 years ago. Since then it never looked back. Emirates is now flying over all international routes and continues to add new destinations from east to west and south to north, as the sky seems to be the limit for Emirates.
Nabil Sultan, Senior Vice President, Commercial Operations West Asia and Indian Ocean told in an informal chat with a group of journalists from Pakistan visited Dubai last week. The visit was actually arranged by Radhika Markan, a wonderful young lady from Mumbay, who is giving her best as media coordinator to let people know about the success story of Emirates.
In fact, the success of an organization or a country depends much on its dedicated workforce with a will to deliver and achieve the targets. This is what exactly transpired from the working style of graceful Radhika having manners in her every step apparently reflected in a five-day visit of fascinating Dubai, she had arranged.
Besides visiting airlines Head quarters, we were taken around other projects including Ski Dome, Arabian Adventures, Burj Dubai, the tallest building of the world, and Emirates Holidays.
To tell you the truth what we felt during the visit that it was not Radhika alone who is devoting her time and efforts for her organization, as a matter of fact it's a general culture of that wonderful city. People assembled in Dubai from all corners of the globe with different origin seem to have a clear vision to work for Dubai without indulging in petty matters of color, cast and creed. This is of course an achievement on the part of the leadership of Dubai who have given a direction to the people, an environment of peace and harmony among the people, giving a look of a cosmopolitan culture in its real sense.
Resultantly, Dubai has emerged on the economic map of the world as a place to invest and do business. According to a senior official of Burj Dubai, while the structure was still in construction process 90 percent of the space has already been booked.
It looks that both Dubai and Emirates are growing together by supplementing to each other. However, the significant role being playing Emirates in the robust economic growth, promotion of tourism, and show cashing Dubai around the world can not be over emphasized.
Coming back to Nabil Sultan, while outlining plans for growth in the airline, he observed those Emirates continuously chalks out program both for expansion in its fleet and adds new destinations. Emirates introduced a new destination in India last year while plans are there to add three more destinations there including Kolkutta, Medrass and Banglore. Similarly, plans are also in hand to start new flights in Northern Pakistan for Lahore, Islamabad and Peshawar.
Carrying a pattern of sustainable growth in earnings with a record of 90 percent seat occupancy, Emirates flying over worldwide destinations and also engaged in fleet expansions with most modern aircraft. On the back of a strong team of the willful professional, the airline has positioned itself into a world class air carrier.
Recently, a group of media was taken to Dubai on a study tour, arranged by the Emirates airline obviously for showcasing the success story of Dubai in general and the Emirates' in particular.
Nabil Sultan, who is responsible for Commercial Operations West Asia and Indian Ocean, observed that Pakistan is a major business partner and hope for a major share in Pakistan business with its emerging economist which is the fastest in the region. On the back of impressive economic growth achieved by Pakistan, it is obviously trickling down into air traffic business. He however expressed his confidence that with the implementation of open sky policy in conformity to WTO rules there was an ample scope for growth of aviation business in Pakistan as well.
He said that unusual increase in fuel cost has eroded the earnings of the aviation industry. However, despite tough times given by sky rocketing oil prices, the Emirates retain its legacy to operate in the positive zone for the last 18th consecutive year of profit earnings.
Adnan Kazim, Director Pakistan Operations, present on the occasion added that he was hopeful that air traffic, which is already growing, would further grow in future as well.
With a visible sense of achievement Nabil Sultan and Adnan Kazim revealed that the overall Group profits - for the current year was estimated at Dhs 2.8 billion (US $762 million), up 5% from the previous year's record profits of Dhs 2.7 billion ($726 million).
Following are the major revenue earning segments of the Emirates: Group revenue - Dhs 24.3 billion ($6.6 billion) compared to Dhs 19.1 billion ($5.2 billion), up 27%, Cash balance - Dhs 11 billion ($3 billion) while number of passengers carried - was estimated 14.5 million. The robust growth of aviation industry in Dubai is reflected in the fact that it received at least 420 flights a day, which is self explanatory about the growth of aviation in that marvelous country.
Discussing Pakistan's contribution in Emirates' Group's profits, he said that country-wise profits/ revenue is commercially sensitive information.
However, as far as the region of West Asia and Indian Ocean was concerned it contributed 8.1% of Emirates total revenue. While in terms of size of air traffic from that region it was estimated at 17% of total passengers carried by Emirates besides lifting 17% of tonnage carried by Sky Cargo.
Regarding impact of high fuel prices on profitability, Nabil observed like other airlines, Emirates too is struggling to cope with the sharp rise in fuel costs. Actually, the fuel cost remained the top expenditure accounting for 27.2 per cent of total operating expenditures, up from 21.4 per cent the previous year. He was of the view that Emirates considers Pakistan, as an important trading partner and the way its economy is growing the economic benefits in the area of aviation would also trickle down in the due course of time. Replying to a question regarding growth of aviation industry without mentioning name of any country he referred the WTO rules regarding open sky policy, which provide level playing field to the stakeholders in aviation industry.
However, the airlines absorbs fifty percent of the hike while remaining fifty percent has to be passed on to the customers, said Peter Sedgley, Vice President Cargo Commercial Operations in a separate meeting with the media men. The airline's jet fuel risk management program also helped mitigate fuel costs, saving the company $189 million in 2005-06, 50 per cent more than last year.
It may be mentioned that in addition to global network that extends across five continents, Emirates Skycargo has a worldwide freighter network that is serviced by a fleet of 747 freighters. This also includes the network of pure, cargo-only destinations.
As part of ongoing improvements, Emirates is introducing the first Airbus A310-300f freighters into its fleet. The wide-bodies freighters will side-by-side loading capability of 96x125 pallets (the first of its kind) will have a payload capacity of 39 tons of cargo offering excellent performance capabilities and fuel efficiency.
Peter informed that Emirates contributing a significant role in enhancing exports from Pakistan especially in textiles, rice, and fresh fruits including mango and kinno and other perishable items.
Emirate SkyCargo launched its daily freighter service on the Dubai-Islamabad route operated by an Airbus A310. Pakistan's growing trade and industry will now have direct access to Dubai, which would benefit freight movement of heavy and perishable cargo. Islamabad is a very significant destination of Skycargo as it has a growing industrial sector in its periphery and also caters to growing cargo from adjoining cities like Sialkot, Faisalabad and Gujranwala. The trade and cargo community has received the news with delight as Emirates freighters are all wide bodied and offer significant cargo carrying capacity.
Holding Pakistan as a major partner, he recalled that the first destination of Emirates had landed at Karachi and after that it never looked back.
Actually, the economic growth in Pakistan was instrumental in generating air traffic to many folds especially during last two years.
Adnan Kazim, the chief of Pakistan operations was of the view that Pakistan is a key market for the Emirates. With the addition of 2 flights to Karachi in 2005, Emirates presence in Pakistan includes 38 flights per week to 4 cities (Karachi, Lahore, Islamabad & Peshawar). We are also looking for new destinations in North of Pakistan including Lahore, Islamabad, Peshawar etc as a next step to strengthen our flight operations in Pakistan.
Due to a continued upsurge in passenger demand, Emirates has increased the frequency of flights from Karachi, the corporate hub of Pakistan, to Dubai by adding two weekly flights. As a result, the total number of weekly flights from Karachi to Dubai has to 27. The aircraft being used on this route are Airbus 330-200 offering 27 Business 251 economy class seats. By offering additional flights, Emirates aims at providing increased customer convenience and flexibility.
Adnan added that Emirates also introduced e-ticking facility in Pakistan in partnership with Galleleo's distribution system and American Express. This technology breakthrough would result in added convenience for travel agencies who are freed from physical ticket stock shortage issue. While for the passengers it is very convenient as they do not have to worry about handling various flight coupons with them.
Actually, Pakistan and Dubai share strong trade and tourism relations historically. In 2005, the non-oil trade between the two countries stood at a robust USD 824 million with perishables, textiles, precious stones and base metals as the top traded items.
In fact, Pakistan was among top 10 source markets for Dubai's hospitality industry. Last year, 182,323 Pakistani visitors stayed at Dubai's 371 hotels and hotel apartments. Pakistan, which has emerged as the fifth largest source market for Emirates' DSS packages, sold across the airline's network in 2005.
About Emirates' performance during the past year in Pakistan, Nabil observed that On 1st October, we added 2 extra flights to Karachi to serve the city 27 times a week. Additional flights are operated by Airbus 330-200 offering 27 J Class and 251 Y Class seats + 14 tons of cargo. Daily freighter service operated by an Airbus A310F, launched from ISB to DXB. It caters to growing cargo from adjoining cities like Sialkot, Faisalabad and Gujranwala. Since Sialkot to have a new airport facility developed by the private sector, it is hoped that Emirates role towards that newly developed facility may further grow, as Sialkot is one of the major export centers in Pakistan.
Since Emirates is a major sponsor of sporting events, it has signed a US$ 195 million deal to become FIFA partner from 2007 to 2014, Nabil said. Considering sports as a major source for promoting tourism and aviation activity, Emirates has secured the rights to all FIFA events including both the 2010 and 2014 FIFA World Cups.
Passengers will benefit as Emirates has the exclusive right to broadcast matches of the 2010 and 2014 FIFA World Cups either live or delayed on its in-flight entertainment systems. Emirates currently an official partner of the 2006 FIFA World CupTM in Germany.
Regarding Emirates plan for sports sponsorship in Pakistan, he said that being a major sports sponsor; we supported the South Asian Football Federation (SAFF) Championship, held in Karachi last year.
Being a free port, people doing business in Dubai don't have to face the hassle of tax culture. They don't have to pay taxes like countries. Hence over a period of time, the city has become a rendezvous for business from all over the world. People doing business in Dubai reaping a rich harvest by yield best returns on their investment. Over the years, Dubai is now known as shoppers' paradise and this reputation-pulling crowd from all corners of the world. But one I wish to express that it seems a one way traffic. The benefit of a tax-free regime is not being trickle down to the customers. It seems that there is no check on prices, as one has to pay much more on a consumer item, which is dam cheap in other countries instead of burden of various taxes on a consumer item. In my humble opinion the benefit of tax-free regime should also be passed on to the customers visiting that marvelous city in the hope of a better bargain. Some mechanism for keeping prices at a reasonable level is highly desirable.