Read this today...almost chocked on my coffee. Quite a long read but the punchline is at the end.
Green...out.
ps: I dídn't know our Engineers were the highest paid in the world!!
NOT...
The Dubai connection
By Alistair Osborne, The Times Newspapers Limited 2008
Published: May 07, 2008, 00:36
The rise of Emirates airline and of Dubai are, in many ways, the same story. "Emirates' future = Dubai's future" was the first entry on Shaikh Ahmad Bin Saeed Al Maktoum's full-year results slideshow last week.
The airline's chairman and chief executive has a point. The Emirates group had just reported a Dh5 billion net profit - despite the rocketing oil price.
Just as telling is its contribution to the Dubai economy - $12.8 billion or almost a quarter of GDP. Some $6.8 billion of that came indirectly - from the tourists the carrier brings to Dubai's glitzy hotels or the immigrant construction workers flown in to man the world's biggest crane collection.
Such symbiosis partly explains why Emirates has 20 years of unbroken profits, while rivals' results have bounced around like a plane in turbulence.
Emirates and Dubai have built each other. Never blessed with the oil riches of its neighbours, Dubai set out to build a diversified economy for when the black stuff runs out, founded on commerce, tourism and trade.
Launched in October 1985 with two ageing aircraft and $10 million of government backing, Emirates is the cornerstone of that strategy. Such interdependence has its drawbacks too, however. What happens to Emirates if the music stops. Then, having 182 planes on order with a list price of $58 billion, might look a touch hubristic.
Tim Clark is having none of it. President of Emirates, he is one of the two Brits - alongside vice-chairman Maurice Flanagan - who started the airline from scratch.
"People have been asking me that for years," he says. "I don't see the future as being any different to what happened in the past."
No bubble
For starters, he does not buy the Dubai bubble theory, even if GDP growth must eventually slow from the current 16 per cent.
"The building blocks of what Dubai is today are solid," he says. "Foreign investment is coming in in a big way. People are looking for a safe haven, having lost out on sub-prime and the credit crunch. Everybody's here - Goldman Sachs, Merrill Lynch, JP Morgan. They go where the market is, where they sense blood.
"The government has set up a bourse, they have done everything to make sure Dubai is ready for business. Apart from problems finding accommodation and the traffic, everybody here enjoys being here. I've never seen a government facilitate business more than this government."
As the man who built the Emirates' network, Clark has other grounds for confidence. "How are we managing to grow our business when everybody else is reporting profit levels that have gone down or whose rate of growth has come off?" says Clark.
"It's because, strategically, we grew our network into areas that other carriers would not go or did not treat seriously - Africa, large parts of Asia. You go into these areas and you find yields are higher and demand is strong."
There are other factors too. "The aeroplanes we get we work extremely hard. Our unit costs - if you strip out fuel - do not grow at the same pace. We have also spent a lot of money on our brand." As, indirectly, has Dubai tourism.
Around this, Emirates has built its Dubai hub, that melting pot where east-west traffic meets north-south and few destinations are more than eight hours flying time away. Crucially it operates 24 hours a day. Emirates has capitalised, launching some curious routes - a direct service to Newcastle, for example, via which backpacking Geordies can transit to Australia.
One current obstacle is Dubai airport, which handled 36.5 million passengers last year and is as chocka as Heathrow. Not for long. A third terminal opens later this year and a fourth is already under construction. They will push capacity north of 75 million passengers.
That's not the half of it though. Handily, Shaikh Ahmad doubles up as the man responsible for the modestly titled Dubai World Central. This is a $33 billion project to build a new airport at Jebel Ali, with six runways and capacity for at least 120 million passengers a year.
Focus
Says Gary Chapman, president of group services at Emirates: "The only crime in Dubai is not thinking big. We have the benefit of a government that is focused on developing the infrastructure required. We don't have five years of planning permission. The government identifies the need for it and it's going to happen."
Unlike other airlines, Emirates is forced to import its labour, with its 35,000-plus staff drawn from 145 nationalities.
"Our costs are growing all the time unfortunately," says Clark. "Our engineers are the highest paid in the world. Our pilots are in the top five or six. We provide houses, we furnish the houses, we pay the bills. We take our pilots to work in chauffeur-driven cars. These are costs the legacy carriers in Europe don't face."