How Emirates can silence its jealous rivals

Opening up its books with an IPO is a surefire way to curb critics.


One of the joys on writing a big feature on Emirates Airline is that it’s actually quite easy to do, as my colleague Shane McGinley, who interviewed the company’s president Tim Clark this month, found out. There are certain buzz words that you use, and just fill in the gaps between them; record profits; record capacity; record routes; record growth; record orders.

Every time I look at the numbers, which I have done for nearly seven years now, I never cease to be amazed. This is the 23rd straight year of profit. Profits are the highest ever, at $1.5bn. They have risen by their largest ever amount, 52 percent in one year. Emirates recorded a 14.5 percent rise in passenger numbers to 31.4 million and its seat capacity rose to its highest level ever of 80 percent.

All this (if you include the Q1 of 2011) against a background of volcanic ash clouds, winter snow chaos in Europe, earthquakes and tsunamis in Japan and regional unrest in the Middle East and North Africa. Nor should we forget rising fuel prices that now make up 43 percent of the airline’s cost base (compared to twelve percent a decade ago). As I get older, I am often being accused of being too soft on the people and companies we write about. But come on now; is there a single thing - just one thing - you can fault about the figures? And more importantly, why is it that Tim Clark and his boss HH Sheikh Ahmed are not held in the same regard as the likes of Sir Richard Branson, Steve Jobs and Bill Gates?

I’ll tell you why in one word: jealousy. There is an easy weapon to always fire at Emirates, which is the completely unproven and totally rejected argument that the company receives some kind of subsidy from the Dubai government to help it boost profits. This has been going on for 23 years, yet nobody - not even the world’s finest forensic accountants - have ever found one shred of evidence of this. As Clark tells us this month: “Don’t even talk to me about subsidies or asking people for help. We do it ourselves.”

What is all the more ludicrous about the subsidies argument is that even if it were true, how does that explain 31.4 million people deciding to fly Emirates in the last year - nearly fifteen percent more than the year before? The ticket prices are similar to its competitors. I rather doubt a single one of these 31.4 million passengers thought “Ah, yes, Emirates gets government subsidies, I should fly with them…”

The reason is a combination of a great product and even greater marketing. Deals such as the sponsorship of the Emirates Stadium in London, and being the carrier with the biggest fleet of A380s, have made Emirates Airline a household name from Dubai to Dakar. It is probably the most trusted Arab brand anywhere on earth. And, while I am sure everyone can find a story about a flight they would rather forget, for the most part its service from start to finish is second to none. It is time the rivals just gave up on the subsidies sniping and accept the fact Emirates Airline gets no help, never has and never will.

During the last results presentation, HH Sheikh Ahmed was asked whether the company would consider an IPO, something that has been on the back burner for a good five years. He didn’t rule it out, though suggested it is still some time away. He is right about that, as at the present time the company doesn’t need the funds. But I hope that Emirates does one day take a trip to the stock market. Not only so the rest of us can benefit from its success, but because opening up its books to the city is probably the only way the critics will ever be silenced.

Written by Anil Bhoyrul, editorial director, ITP.

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