By Anil Bhoyrul
After 27 years, Emirates has over 170 aircraft and flies to more than 120 destinations in over 70 countries. The real question is what next?
There are few people in business who really tell it like it is. Not afraid to speak their mind, suggest the unthinkable, but actually say what all of us are really thinking.
Which brings me smoothly onto our cover star this week, Emirates Airline executive vice chairman Sir Maurice Flanagan. He may be 83 years old now, but let’s be honest — there aren’t many around better than him. One man’s loose cannon is another’s living legend. The fact is that for the past 27 years, Sir Maurice has played an integral role in the growth of one of the world’s most successful companies. As he tells us: “I was given $10m by Sheikh Mohammed in 1985 and told don’t come back for any more or subsidy of any kind or protection of any kind. About $81m they put in, the shell of the training college, but that’s all.”
Twenty seven years on, Emirates has over 170 aircraft, and flies to more than 120 destinations in over 70 countries. Flanagan is probably one of the few people who can still remember that morning in October 1985, when Emirates flew its first routes out of Dubai with just two planes — a leased Boeing 737 and Airbus 300B4.
But the real question for Emirates is what next? Yes, it can carry on buying more planes and expanding into new markets. It can carry on making healthy profits that only change with the price of oil. We could all argue about the standards of service (I’m on the side that gives it nine out of ten), and debate endlessly whether they really should have taken those footrests off the A380s just to cut down on the plane’s weight.
But long term, in the bigger picture, what next? The “unthinkable” is of course whether Emirates Airline could one day be sold. Flanagan was brave enough during our interview to suggest “the time might come when it would make sense to do that.”
There is of course no suggestion that this is being seriously thought about at the airline, and Flanagan rightly stresses this is entirely his personal opinion. But his opinion counts, and is worth exploring. Depending who you ask, a future sale of the airline would bring in a pay day of around $11bn — some would argue closer to $15bn given its brand value. When you consider that its net cash assets are over $4bn, you can soon make a case that at this time, Emirates has the strongest asset value of any airline out there.
And that is precisely the problem. Name me a cash rich airline with the funds to pursue such a deal? You can’t, can you? The only “sale” option would be an IPO, which has been muted before. There would be no shortage of banks and institutional investors queuing up for a slice of the company. Though again, Emirates has never had a problem raising finance. The company’s last bond was oversubscribed by six times. It just doesn’t need to IPO.
So what next? Go down the acquisition route, in a similar way to Etihad? The company tried that with a stake in Sri Lankan Airlines, and by all accounts, is an experience it doesn’t want to repeat. As Flanagan himself says: “Absolutely not… It eats up an enormous amount of senior management time… They want you to develop that airline to be like Emirates.”
This final comment really hits the nail on the head — Emirates’ problem is that everyone wants to be like Emirates.
Which is why the growing feeling is that it will never be sold, it will probably never IPO and it certainly won’t go buying other airlines.
It will just carry on as it is. And nothing much wrong with that is there? In years to come, I suspect Sir Maurice Flanagan’s successor will be talking about an airline with over 300 planes, flying to 250 destinations in 100 countries.
Anil Bhoyrul is the Editor Director of Arabian Business.
Emirates have a very poor call center. They need to improve it.
Poor call center and non-polite customer service is very normal with Emirates Airline's ground-handling staff as well as some inflight cabin-crew members; this could be due to multi-nationalities which embedded with different cultural behaviours. Having 120 nationalities may not be necessary a great difference; Emirates just trying to exhibit the difference to the world. Does not served a purpose.
I have lived in the gulf for numerous years and am now in Qatar and in my opinion Qatar Airways far out ranks Emirates and given a few years it will have a stronger brand, more destinations and more visibility... Emirates will be begging Qatar Airways to buy it to have the Qatar prestige!
Small airlines struggle to compete and as the get larger they struggle to maintain services... The same can be said for many service led companies anywhere in the world. I believe Emirates have managed to control both in a clever and managed manner which is demonstrated in their value and profitability.
There is always room for improvement in any company, but Emirates have indeed out classed most if not all and especially considering the size and diversity it currently has in people and routes. So, keep up the good work Emirates but don't take your foot off the peddle that strives for better performance, in all aspects and at all times and never forget you are here for us, the paying customers. Andrew Bannister, Dubai
emirates customer service is really not world class. its one thing having a great brand or advertising campaign or new planes, but it all comes down to passenger comfort.
i recently took an emirates flights and the seat had vomit on it (from previous flight). it was not cleaned properly and even though the cabin crew admitted knowledge - they allowed me to sit on it!
and guess what i got for this problem ? not even an upgrade to move to the next cabin - just some wipes!
im never flying emirates again
I am a big fan of Emirates and their services, and I mostly fly with Emirates, but, in last couple of trip I was assured Ayle seat at the time of check in( when I could not get time for online check in), but, was surprised to see my Middle seat at last. And samething happened to my family. I would like to mention here another expereince. On the next trip, just to ensure to get my prefered seat, I lodged a complaint about my last exprience of getting Middle seat, requested to confirm my Ayle seat, the supervisor apologized and upgraded me to the Business. Overall, I feels Emirates is among the best.
I just love reading comments about airlines. Never fly x again or y is so bad. Forget it. Mishaps happen in every airline. Seats allocated to others where you wanted to sit etc etc. The majority of the complainers are looking for an upgrade.
As a very frequent flyer, i have tried most airlines flying from Dubai and to be very honest, nothing beats EK. Yes I have had nishaps too but overal it is the best experience, probably not the cheapest if you are based in Dubai but simply the best.
Qatar will not overtake Emirates for a number of reasons. 1) it needs the passenger loads that EK has to grow and it does not have them. 2) It does not yet have the brand name. 3) Its smaller aircraft used on thier less frequent routes simply do not have the same luxury as EK. 3) They are not able to be a preferred employer, if cabin crew could choose, they choose to work for EK. 4) Doha is not the vibrant place Dubai is (yet) which also attract passengers, (holiday makers and business men).
At the moment it is not a comparison but merely peoples preference and hence the wish things may change.
Looking at bare facts.
EK has 177 aircraft (All wide body)
QR has 109 aircraft (mixed fleet)
EK is in the worlds top 5 in passenger-km flown.
QR doesnt make the top 10
EK is nr 1 in international passenger-km and that with by far the smallest fleet of the top 5. So specialized in long haul. Which also says something about efficiency.
I am not saying they cannot be beaten or there will be no competition but the competitors have a long way to go before they can reach Ek's performance, which is also growing.
I belong to those who will not fly EK anymore. My reasons from my OWN experience - NOT hear-say:
- Unfriendly call center staff, in Europe and in Dubai (perhaps because I insisted on economy, not business class)
- Seat number for onward flight ex DXB confirmed in reservation and at check-in in Europe was changed resulting in double-seating at DXB with really little, not to say NO assistance by cabin crew (had to wait until "boarding completed", was not allowed to leave plane and have problem solved by gate staff)
- Rough treatment by ground staff at DXB while in transit (both ways)
- Cabin crew who seemed to have problems to solve their own inter-/multi-cultural problem (no real customer oriented communication between cabin crew during all flights)
- Arriving back in Europe, I was told that my checked bag did not make the connex in DXB (4:50 hours between the flights!). Although not really lost, it took EK three days to restore that bag to me.
Do you really expect me to fly EK again?
However, according to Skytrax, Qatar is a five star airline with over 90% customer satisfaction while Emirates is a four star airline with 60% customer satisfaction.