Two events related to Dubai's aviation brought back the world's focus on the rock solid success story of Dubai as one of world's leading aviation hubs. Emirates AirlinesEmirates Airlines jumbo order for A380s and opening of first runway of Al Maktoum International Airport. While continued expansion of Dubai's aviation infrastructure amid the crisis continues to surprise many, the fact is the aviation is one of three sustainable and core competencies of Dubai, the other two being Maritime and Services.

On Aviation, Economist recently ran a long article on strengths of gulf aviation players, but primarily dwelt on the success story of EmiratesEmirates. The article re-highlighted some of the well known strengths underpinning the rise of Emirates AirlinesEmirates Airlines as the world's leading long haul career.

EmiratesEmirates has continued to outperform its peers and is consolidating its lead by a wide margin. During the last financial year, described as the airline’s “toughest” by Sheikh Ahmed, EmiratesEmirates’ chairman and chief executive, EmiratesEmirates profits rose more than fivefold, to nearly $1 billion, passenger numbers went up by 21% to 27.5m, seat load factors improved by more than 2% to 78%, even though capacity (measured by available seat kilometres) increased by 20%. This is in contrast to Air France-KLM and British Airways, which in the same period made a loss of $2 billion and $758m respectively.

EmiratesEmirates rise was always seen with a disbelief and rival airlines alleged hidden subsidies and support to explain this seemingly defying the gravity act of the airline. But soon enough reality was staring in the face and everyone was forced to acknowledge that the success was a product of of right mix of favorable factors, timing, excellent management and visionary leadership.

First and foremost Location underpins EmiratesEmirates’ business model... the region is a natural “pinch point” between westward and eastward routes. Sheikh Ahmed describes it as being in the middle of the “new silk road”. Nearly 2 billion people live within four hours’ flying time of the Gulf and twice as many within seven hours. Since the arrival of ultra-long-range airliners in the mid-1990s in the shape of the Boeing 777 (for which EmiratesEmirates is the biggest customer), any two big cities on Earth can be linked via Dubai with no other stops.

Next, EmiratesEmirates has built a strong presence in “secondary” markets, such as Manchester and Newcastle in Britain, Hamburg and Dusseldorf in Germany or Kochi and Kolkata in India, neglected by airlines like BA, Lufthansa and Air India, which focus on their own hubs. A passenger flying from, say, Manchester to Tokyo may not care whether he changes planes at Heathrow or Dubai, particularly if EmiratesEmirates can offer a nicer time in transit, a cheaper ticket and a better in-flight experience.

EmiratesEmirates has also thrived by entering markets in the rest of the Middle East, Africa, South-East Asia, India and Latin America that had hitherto been poorly connected to the global air-transport network because of over-regulation, the absence of a strong local flag carrier and the indifference of established airlines... EmiratesEmirates has also exploited the growing market for freight to and from such places. Cargo, much of it carried in the belly of its passenger jets, brings in almost 20% of revenue, one of the highest shares in the industry.

Finally, having started with a clean sheet, EmiratesEmirates has a flat management structure and the kind of flexible, highly productive workforce that carriers such as strike-torn BA and high-cost Lufthansa can only dream of. Although its pilots and engineers are paid at globally competitive rates, most cabin crew and ancillary staff are recruited on lowish wages from the subcontinent and South-East Asia. A locally based aviation consultant says that flight crews are worked right up to the regulatory limits. Like other workers in Dubai, EmiratesEmirates’ employees do not pay income tax, which means that gross salaries can be much lower than at European and American rivals. Staff costs at EmiratesEmirates are around 15% of overhead, against well over twice that for a typical American or European network carrier...