Emirates Posts Record Profit of US$ 3 Billion – How Did They Do it?

Emirates posts record profit of US$ 3 Billion for the financial year 2022-23. The Group’s revenue was US$ 32.6 Billion during the same period. The question that immediately comes to mind is how did they do it when so many airlines are struggling around the world with some having closed down and others going through very difficult times. There are many factors that contribute to the Airline’s success. Let’s take a look at the how and why of Emirates’ success – as a former insider, I have had the pleasure to play in the actual arena.

HH Sheikh Ahmed bin Saeed Al Maktoum, Chairman and Chief Executive, of Emirates Airline and Group, said: “I’m proud of the Emirates Group’s performance for 2022-23, and our contribution to the restoration of air transport and tourism across the markets we serve, including Dubai’s astounding 97% year-on-year growth in international visitors for 2022. The Group is the biggest player in the UAE’s aviation sector, which supports over 770,000 jobs and generates an estimated contribution to GDP of over US$ 47 billion.”

Origins in dnata

The story goes back to the regionally well-known Travel group called dnata – an acronym for its original name Dubai National Air Travel Agency. Established in 1959, and owned by the Ruler of Dubai, dnata became the largest Travel company in the Arabian Gulf. As General Sales Agent for about two dozen airlines and with complete responsibility for the running of Dubai International Airport (which is also owned by a company that was owned by the ruler of Dubai), the Company had many advantages.

Dnata even today has under its umbrella, an IATA travel Agency which handles all aspects of modern Air Travel. Consequently, it was commonly said that dnata was an Air travel Company that had everything in the Air Travel business except aeroplanes! The acquiring of aeroplanes was just a matter of time.

Emirates History – going back to 1985

In 1985 Gulf Air was the airline of four countries: Bahrain, the United Arab Emirates, Qatar and Oman. The hub of the Airline was Bahrain. The Government of Dubai had plans to quickly put Dubai on the tourism map of the world. The Emirate’s Open Skies Policy was launched to make that possible. The powers that be, wanted Gulf Air to create a hub in Dubai as well, but not all the decision-makers of the Airline were willing to concede to the request. 

Dubai’s response was to create its own airline. HH Sheikh Mohamed bin Rashid Al Maktoum, currently the UAE Vice President and Prime Minister and Ruler of Dubai, was in charge of the project. He, in turn, nominated his Uncle HH Sheikh Ahmed bin Saeed Al Maktoum to execute the aspirations of the ruling family. The proposition was converted to reality almost immediately. Emirates was launched in 1985 with just two leased aircraft.

Sir Maurice Flanagan, KBE, CBE.

In 1978 Mr Flanagan had been appointed Director and General Manager of dnata. In 1985, HH Sheikh Mohamed bin Rashid tasked Mr Flanagan to launch Emirates. He was responsible for the rapid development of the Airline and its expansion strategy until 2013 when he retired.

His master touch was and is visible in every area of the Airline. Sir Flanagan’s experience in the Airline Industry and visionary approach to the job to create a leading airline of the world, have left their mark on Emirates. His enviable contribution set the Airline on a very firm foundation. 

The location of Dubai

Ideally located between the continents of Europe and Asia, Dubai enjoys a geographic position that the Airline capitalised on from its very inception. It has indeed played a very important role in the rapid expansion of the Carrier. 

The location of the City which had been ideal for trade and commerce for centuries, would quickly put it on the modern trade map of the world once again. Emirates enjoys the benefits of the location of the City of Merchants, as Dubai used to be known.

The Hub and Spoke System

Initially created in the USA where it is in use even today, the System was quickly adopted by many airlines around the world. Especially national flag carriers that monopolised their principal airports. For example, Air France in Paris – Charles de Gaulle, British Airways in London Heathrow, Lufthansa in Frankfurt, KLM in Amsterdam Schiphol etc.

Dubai’s location in the Gulf was ideally suited to maximise the potential of the hub and spoke system. The Airline could easily take travellers from Northern Europe to South East Asia or from the Far East to South America using Dubai’s strategic location.

The airline hub of Emirates in Dubai has medium-range spokes all over the Middle East and North Africa. The connectivity map today stretches across the world from Australasia to the Americas, from Northern Europe to South Africa. Today, there is no continent to which the airline does not fly.

Development of the Emirates product

During the initial years, Sir Maurice was personally involved in developing the Emirates product. He had the complete backing of the ruling family of the Emirate of Dubai who always wanted the best of everything. Together they wanted to create the best airline in the World. No effort was spared to make that happen. Starting from the concepts that would run a successful airline, to the interior design of the aircraft, airport facilities, and all other aspects of the business. He had a hand in it all.

“Emirates has always been at the forefront of innovation, and we continue to push boundaries to provide our customers with the best possible travel experience,” stated His Highness Sheikh Ahmed bin Saeed Al Maktoum. “Investments in our fleet, state-of-the-art amenities, and cutting-edge technology have allowed us to stay ahead of the curve and set new industry standards.”

Investment in Technology

The Airline made a much-talked-about investment into Technology. At one time the carrier had over 500 staff working in the IT Department in Dubai. They created leading-edge technologies that many other carriers did not have. Not only did they get cracking on the many aspects of modern air travel, but also work on, airport systems (which are being sold to many other airlines and airports around the world), office communication systems, HR systems etc. The principal aim was total integration. They have made amazing inroads into creating a unique system.

Inflight Products and Services

The cabin crew services of Emirates became the talk of the Industry. Cabin crew were recruited from the furthest corners of the globe. The Airline currently has over 18,000 cabin crew who come from 130 countries and speak more than 70 languages. The language skills of staff on board, cater to the diverse requirements of various nationals who form the majority of passengers travelling on any given route. 

The seating on board the aircraft has always focussed on passenger comfort in its design and development. The Airline’s catering services came up with international menus and cuisines that their clients wanted. 

Seating in Business and First Class has the ultimate passenger comfort in mind. The airline was one of the first carriers to introduce suites for First Class passengers. Emirates was also the first airline to introduce the onboard Shower Spa for First Class passengers on the Airbus A380. The experience and luxury of having a shower at 32,000 feet soon became the point of many discussions. 

The Airline was the first in the Region to launch the Premium Economy Class with 56 seats on the main deck in the Airbus A380s. As of April 2023, the product was available on 5 long-haul routes. It will be extended to 3 more destinations by the end of the year. With a configuration of 2-4-2, the cabin offers seats with a comfortable width of 19.5 inches and a Seat Pitch (distance between seats), of 40 inches.

The inflight entertainment system of the Airline, ICE, is also the envy of many airlines. Onboard Internet connectivity as well as the use of mobile phones have added more facilities for travellers. Everything had to be the best!

The staff of the Airline

Up to 1990, the metropolitan population of Dubai was less than 500,000. The Emirate’s local population was not very interested in working for start-up companies at lower levels. What is today known as the Emirates Group had to therefore recruit staff from abroad. The Group today employs over 102,000 people.

Of course, there had already been a history of expatriates working for dnata. Emirates would multiply that strategy in great numbers. Emirates attracted staff from many other countries and brought in the best available manpower. At the senior level, it is a coming together of some of the best aviation brains in the world. Success is its destiny.

All of them were trained in other companies around the world, but Emirates further influenced their business thought processes through their own world-class Emirates Aviation College. They were brought into the airline’s excellence culture which touches every aspect of the business.

Innovative Marketing

The Company has become known for its innovative marketing. There have been many exciting programmes launched all aimed at marketing Emirates in trail-blazing projects.

The Company has also excelled in its efforts to use various channels to promote its brand globally. Strategic partnerships with major sports events, including football clubs and Formula 1, have greatly enhanced the airline’s visibility and strengthened its association with excellence and luxury.

Loyalty Programme

The Airline also established a Loyalty programme that would multiply the loyalty of its clients. The client appetite for more ‘Miles’, created phenomenal growth in the Department, and has kept dedicated travellers asking for more and more.

The Development of Dubai

Starting in the mid-1990s, project modern Dubai was launched. It was and is the brainchild of HH Sheikh Mohamed bin Rashid Al Maktoum. 

As the Airline was growing at a phenomenal pace, the City of Dubai was growing at a greater pace. Unthinkable projects like the Palm Islands and other such were to become reality. They got the whole world talking about the ‘miracle’ that is Dubai. Projects like the Burj Al Arab, Burj Khalifa and Dubai Mall, got the whole world talking about Dubai. Curiosity about the City was created.

Today the whole world wants to see Dubai for its many firsts and other achievements. The tallest manmade structure, largest manmade island projects, curiously shaped buildings, an excellent network of arterial roads, etc. They want to see and experience the Dubai lifestyle. The Airline is automatically a major beneficiary.

Emirates today

“In 2022-23, we’ve not only brought back most of our operations but also grew our footprint and capabilities by investing in people, product, and new technologies – demonstrating our agility and ability. We continue to lay strong foundations for future success and join hands with partners to grow our business and to collaborate on innovative solutions for travel and aviation.”

Sheikh Ahmed bin Saeed Al Maktoum, Chairman and Chief Executive, Emirates

The Airline today has the largest fleets of Airbus A380s (116 aircraft), and Boeing 777s (144 aircraft) including 11 B777-F freighter aircraft. The carrier has a total of 260 aircraft in the fleet as of May 2023. The airline flies to 143 destinations in 77 countries.

Emirates places great importance on safety. The fleet is always maintained at its best, with new aircraft continually coming into the fleet. The Company today has 200 wide-bodied aircraft in its order books.

The Airline carried 43.6 Million passengers in 2022-23 with a Passenger Seat Factor of 79.5%

International Recognition of Brand Emirates

It is not really one single factor that has exclusively contributed to the headline, ‘Emirates Posts Record Profit’. All of the above have come together, to take the Airline to where it is today. The Airline has become a celebrated brand in every destination that the carrier flies to. Not just in their destinations; the reputation of the carrier has spread to countries they do not fly to and populations the world over aspire to fly the Airline someday. There could be no better tribute to any airline in the world.

The success of destination and brand Dubai is the success of Emirates. Everything in the wonder that is Dubai today, has worked towards the success of the Airline. 

The Al Maktoum family responsible for all the success

All things said and explained, the success of Dubai and Emirates is still the vision of one man: HH Sheikh Mohamed bin Rashid Al Maktoum. The master plan from the architect of modern Dubai has his touch of gold. Everything he touches seems to turn to gold.

© Mano Chandra Dhas

Note – Mano is a retired senior manager of the Emirates Airlines Group. Should you have any comments or queries, please use the comment box here below to record them. We will respond to every comment within a reasonable period of time. We’d also be delighted if you share this blog with contacts of yours who may be interested in its content. Please use one of the Social Media share buttons below. We’d love to have you subscribe to our blog: it is free and you will never miss a post!