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...
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