Exclusive: HH Sheikh Ahmed on Dubai and Emirates

First of all, the success of Dubai and the success of Emirates – are the two things dependent upon each other?

“From the very start, Emirates Airline and Dubai have grown hand in hand. Dubai’s strategic location at the crossroads of Europe, Africa, and Asia has been at the foundation of Emirates’ success in building up a global hub for travellers and cargo. From Dubai, we are able to serve about one-third of the world’s population within a four-hour flying radius, two-thirds of the world’s population within an eight-hour flying radius and almost 90 per cent of the world’s population with non-stop flights using the latest ultra-long range aircraft.

“Geography plays an important part of the story – but it can only do so much if you don’t have the other pieces in place. It was never our purpose to become the world’s biggest airline, but to be the airline of choice that connected the world. In order to do this, the leaders of Dubai had a clear vision for the city. And they put in place the infrastructure, systems, and investment needed to build a global destination – from world-class airports, seaports, roads and metro transportation to financial institutions, tourism infrastructure, housing, education, healthcare and other social support systems for the local and expatriate population.

“We believe there is still great potential for the airline, and Dubai, to grow even further. For Emirates, one of the keys to unlocking new growth will be the new Al Maktoum International airport. The new airport will build on the latest technologies for a better passenger experience, but also open up much-needed capacity to accommodate the expansion of our fleet and operations.”

And moving on to the open skies debate, it seems to have gone relatively quiet of late. Are we any nearer a resolution and can the bridges ever be repaired, given that the American carriers accused the Gulf ‘big three’ airlines of unfair state subsidies running into billions of dollars?

“As far as Emirates is concerned, we made an exhaustive case to the American government that we are not subsidised in any way, shape or form. We are a profit-driven commercial enterprise that offers superior connectivity across the globe, sparing no detail to ensure a high-quality customer experience. Their stance is outdated and we hope that the United States government takes our full response into consideration before making any decisions. And we hope that any future decisions will be in favour of strengthening the economic relationship between the US and the United Arab Emirates.”

It has been said that this was just sour grapes protectionism, because service is simply better on the Gulf ‘big three’ than western airlines – meaning passengers are simply voting with their feet. If that’s true, what does the future hold for the aviation giants of yesteryear – do you expect them to recover and come back fighting with new offerings?

“The American carriers continue to report record-breaking profits and they have a massive advantage from operating in a protected market with anti-trust immunity. With the billions being made, it only makes sense that they would invest in their own products and services or begin competing on an international scale. Yet they continue to churn out misleading information and continue their protectionist rhetoric, instead of actually competing for what matters most, the consumer.”

Read: Delta cancels Dubai-Atlanta flights as subsidy row heats up

I understand the lack of liberalisation in the Canadian market had previously restricted the number of Emirates flights to that country. Are you making any progress there in terms of improved relations and potential new slots opening up now that there is a new government in place?

“We know that more access into Canada could generate $480m or Dhs 1.76bn – in additional economic activity, and each additional flight would inject $60m annually into the Canadian economy. We are excited at the prospect of the new government in place. However, only time will tell in how this plays out with regards to more access.”

Emirates is still rapidly expanding the number of new destinations, passengers and aircraft. Is this growth rate sustainable when the oil price is so low?

“For many airlines which are reporting record profits, the lure of enjoying the benefits of cheaper fuel and taking the foot off operational efficiencies is great. At Emirates, we will continue to invest in new fuel-efficient aircraft and technologies because we know that is key to long-term sustainable growth. In fact, as we receive 36 aircraft this year, we will be phasing out 26 to ensure that our fleet remains young – because we know that new modern aircraft take the customer experience to the next level.”

And how has the opening of Concourse D at Dubai International Airport transformed the airline’s operations – if at all?

“Concourse D has given us some relief and has helped us address our growing capacity constraints. We are gradually taking over Concourse C, refurbishing it along the way, to derive every last bit of efficiency from our operations and maximise the slots available.”

How quickly do you expect Al Maktoum International Airport to become a major aviation hub – and what will the ramifications of that be for the airline?

“Al Maktoum International Airport is around nine to 10 years away from being ready to accommodate our full scale operation. Due to a number of complexities, we don’t plan on having a split operation.”

The major aviation destinations across the world have matured now. So how much of an opportunity are untapped markets like Iran and Cuba for Emirates?

“Our business model has never solely focused on the main hub cities. Part of our route network strategy is to connect underserved markets with large populations, and few flying options, to our global network; this includes providing secondary cities in large markets with non-stop international flights. This strategy has allowed us to capitalise on new global flows of passenger demand – not only in Europe, but also in Asia and Africa. In effect, we have created new ‘growth poles’ in the process.”

But limited airspace and the complexity of air traffic control surely mean that the expansion of airports will plateau as we simply run out of room physically to put more planes in the sky. Is that a major concern for you or will technology provide a solution?

“We are looking at a number of air traffic management solutions and this is not only on the UAE level, but the Gulf Cooperation Council level as well – as we all share an airspace that accommodates six international airports. Governments in the region understand the critical nature of this issue and are onboard to ensure our airspaces are efficiently managed. I anticipate that we will see progress in the next two to three years.”

Changing topic slightly, how will you measure the return on investment from the Jennifer Aniston television advertising campaign?

“Our product campaign with Jennifer Aniston went viral soon after it launched because it was a departure from the industry norm, showing a light-hearted side to the Emirates brand while still delivering a message about our outstanding product and service. Most importantly, it created a conversation both online and offline. People were sharing it and I think that speaks volumes about winning the hearts and minds of audiences.”

And what did you personally think of the content of the Aniston advert? There was some criticism suggesting it was slightly elitist but most people I spoke to found it to be amusing and honest; after all, most of us love luxury.

“I am personally proud of this campaign. It got people excited because it was entertaining as Jennifer Aniston bought it all to life. And most importantly they could relate to having ‘nightmare’ service, so it struck a chord with the audience.”

Read: Emirates releases first Jennifer Aniston TV ad as part of $20m campaign

What are the big technological advances coming down the line for the aviation industry in the short, medium and long term – will the talk of innovations like hybrid planes and aviation beyond the earth’s atmosphere eventually become reality or are we simply talking about people checking in through apps?

“The industry is looking at a number of interesting future technologies and we think there are some that can reshape travel and aviation. Some examples include airframes and engines made entirely out of composite material and the ‘internet of things’ applied to aviation and the broader passenger experience.

“However, the concept that will truly be a game-changer is when aviation becomes a truly ‘global’ industry. This means deregulation, open skies, full collaboration on security and advances in air traffic technologies – which will help the industry benefit from more efficiencies. Air travel has a big future, but only if everyone involved in this sector – the industry, governments, regulators and local communities – works together in the long-term interests of all stakeholders.”

Many visitors will come to the region for Expo 2020 in Dubai and the Qatar football world cup in 2022. What do you expect the next big calendar event to be beyond that in terms of driving tourism and economic growth – and is there a risk of a bust after the boom given that these landmark moments are normally followed by a malaise?

“As we inch closer to Expo 2020, the government and business community have already begun to collectively gear up for the largest international mega-event to happen in this region. Dubai expects to receive over 25 million visitors with over 70 per cent of them coming from beyond the UAE, setting a precedent for world expos.

“This translates into opportunities for businesses to further link up with global value chains across several sectors. And the aviation sector will play a big role in making this happen. I am certain that every sector in the UAE will be involved in this mega project. Everything they do to prepare for it will help to solidify the foundations of our economy and propel it beyond 2020.”

Shifting focus now, did the A380 and the company’s assertive purchase of those planes provide a springboard for it to become the dominant global brand it is today? And, if so, what is the next breakthrough moment likely to be in the Emirates story?

“The A380 has played a key part in building the Emirates brand, but it doesn’t tell the whole story. We’ve been meticulously building the brand for over 30 years now, and fine-tuning our capabilities to ensure we stay agile for the future.

“We are an airline that has challenged the historical norms of the industry. We focused on a multitude of elements. Not only expansion but also innovation, product quality and service standards. The way we project the brand is reflected in everything we do. Our brand helps to connect us to our customers and beyond. Being relevant, innovative and inspiring has helped us maintain the position as the world’s most valuable airline brand. And it has played a key role in driving the growth of our business.”

You have a major alliance with Qantas. Are there any other similar type deals on the horizon beyond codeshare agreements – do you want to pursue such partnership strategies or go it alone?

“This is the third year of our partnership with Qantas and we believe that it continues to deliver through opening up both of our networks, dramatically expanding the travel options of our customers – in addition to deeply integrated reciprocal travel benefits. If we can find a partner with a similar mindset, we will pursue it. But, at the moment, we don’t foresee any immediate partnerships that resemble the one we have with Qantas.

“Apart from Qantas, we signed new code-share partnerships and expanded on existing ones in key, strategic regions over the past year. We will continue to look at similar arrangements that benefit our customers.”

Emirates has an extensive sports sponsorship portfolio. What are the tangible benefits these sponsorship deals bring the company and are you looking for further such opportunities?

“Sponsorships are one of the most effective ways to connect with our customers, allowing us to inspire them with our brand by sharing in their interests – and they will continue to be a key part of our brand strategy. Our global sponsorships like the Association of Tennis Professionals, Rugby World Cup and our European football clubs have enabled us to enjoy strong brand recognition – especially in new and untapped markets.”

Can you outline the ways in which you plan to enhance the customer experience going forward, what are the in-flight innovations coming down the line?

“We will have a number of enhancements coming down the line this year, not only in the air but also on the ground, like the addition of more dedicated lounges across our network, mobile technologies for booking, check-in and so on.

“Onboard, we recently announced our new Boeing 777 business class seat. It will make its debut in November on our 170th Boeing 777-300ER aircraft. This seat will take comfort to a whole new level, inspired by the interior of a modern sports car with an ergonomically designed headrest and other sleek details. We’ve increased the pitch of the seat, which moves into a fully flat position and we have also featured additional amenities like a mini-bar, 23-inch personal screens and the latest touchscreen controller.”

Emirates recently topped the UAE brand rankings once again in a YouGov survey relating to positive customer perceptions. How do you guard against complacency in such a successful global company?

“All our marketing initiatives have clear objectives and payback, as you would expect from any commercial organisation. Being relevant, innovative and inspiring has helped us maintain the position not just as the UAE’s top brand but also as the world’s most valuable airline brand. However, being on top doesn’t mean we rest on our laurels. We will continue to push boundaries through the touchstones of everything we do so we outperform in our industry, because a strong brand is key to ensuring the success of our recruitment drives, sales and marketing, and when attracting investment.”

Finally, this is the 20th anniversary issue of Gulf Business magazine, a title that has documented the rapid transformation of Dubai in the last 20 years. Given the unprecedented pace of growth here in the last two decades, can this trajectory continue when the global economy is now so weak and the oil price is so low? If so, how can we expect the emirate to change in the next 20 years? And what role will Emirates, as an airline, have to play in that future narrative?

“Dubai’s diversified economy has demonstrated renewed growth with real gross domestic product increasing year on year in spite of the effects of the global economic recession. The emirate’s reliance on oil has decreased significantly, with the oil sector accounting for less than 2 per cent of real GDP in 2010. Our leaders have put in place the necessary plans to take the contribution of other sectors like tourism, transport and manufacturing up with intensive investment as well as supporting a range of projects and initiatives based on the knowledge economy.

“Emirates will continue to play a key role in Dubai’s growth story. The aviation sector, spearheaded by the Emirates Group and other stakeholders like Dubai Airport, benefits the economy in many ways. And one of those is by providing direct jobs within the industry. However, significant numbers are also employed both in support services like catering and airport retail, so the knock-on effects are tremendous and will continue to grow.”