Tuesday, May 01, 2012 2:57 pm
Emirates CEO sees room for more US destinations
By ADAM SCHRECKAP Business Writer
Sheik Ahmed bin Saeed Al Maktoum holds several government positions in the Gulf city-state, and is an uncle of Dubai's ruler. He was appointed chairman of Dubai World in 2010 to oversee the troubled state conglomerate's turnaround plan.
But it is role at the helm of Emirates airline for which Sheik Ahmed is best known. The University of Denver graduate became chairman of the newly formed airline in 1985, and later took on the job of CEO too.
Today he oversees one of the world's fastest growing carriers, which boasts more than 120 destinations in 73 countries. Emirates Group, which includes the airline and related businesses, earned $1.6 billion in fiscal 2010. It expects to post another annual profit later this month.
The airline is a huge buyer of new airplanes, with standing orders for more than 230 jets. It operates the world's largest fleet of Boeing 777s, and was one of the first carriers to use Airbus' double-decker A380.
Emirates' torrid growth means it is constantly adding new destinations. Some are exotic, such as recently added Lusaka, Zambia, and Vietnam's Ho Chi Minh City, starting next month.
But the company is also expanding its reach in the United States. It now flies from Dubai to six American airports, including Dallas/Fort Worth and Seattle, both added this year. It plans to add Washington flights in September.
Two weeks ago, Emirates announced a new codeshare deal with New York-based JetBlue Airways. That arrangement will tack an Emirates code and flight number onto JetBlue flights from New York's JFK airport to a dozen U.S. destinations, including Chicago and Boston.
Sheik Ahmed, 53, spoke with The Associated Press on Tuesday in Dubai. He talked about the carrier's U.S. expansion, his thoughts on the A380, which has faced worldwide checks after cracks were found on parts inside the plane's wings, and Emirates' emergence as a global aviation powerhouse. Here are excerpts, edited for clarity and style:
Q: Your new advertising campaign - "Hello Tomorrow" - focuses less on Dubai and more on the fact that Emirates has become this global airline. Why?
A: If you take Emirates today, it's not about an airline only giving this benefit to Dubai itself. Of course, Dubai had tremendous exposure because of Emirates. ... But we think that other countries also have benefited from the Emirates operation.
Q: You've recently added more U.S. destinations. Do you expect more?
A: The bilateral (agreements) between the UAE and the U.S. are very much open. We always see more new destinations to be opened. Where? I think any big cities within the U.S. are a possibility.
Q: You don't fly to Chicago, Atlanta or Detroit, for example. Are those possibilities?
A: Oh yeah. I think one day we'll fly to Chicago, yes. Fly one day to Florida? Yes. Flying to other destinations? Yes, why not?
Q: You recently announced a partnership with JetBlue. Why did you decide to go with a codeshare in the U.S.?
A: We always, I think, remain open about it. We have to decide on a win-win situation when we work with somebody else. ... They can cover a number of destinations in the U.S. And maybe (there will be) others. I feel like sometimes I don't want to decide for the commercial people to announce something that is in the pipeline.
Q: So are you saying that something is in the pipeline? In the U.S. or somewhere else?
A: I mean ... (Laughs)
Q: Does Emirates have any interest in acquisitions of other airlines?
A: I will be very frank with you. I will tell you, I don't have a number that I give to my people, that you have to go and spend that amount. Because I think that's the wrong way to do it, by allocating a budget and saying: "Go and spend it."
It's opportunity, it's timing, it's (a question of) where. Is it going to be something that in the long term, short term, is a benefit to the business that we're in?
But we've been very active in the Dnata (travel and ground service division) area, and that's part of the Group, where we did a lot last year acquiring and buying shares in companies.
Q: So are you saying that acquisitions or partial acquisitions of airlines are a possibility?
A: Yeah, I think I always say, if it is the right time, it's possible.
Q: How are fuel prices affecting your business?
A: For (fiscal) 2011/2012, they've been up from the previous year. It's nearly 40 to 43 percent of our cost, and that's really hitting our bottom line. It is something that we as an airline cannot do much about. Ok, you have hedging ... but it's not as simple as a lot of people think.
Q: As one of the only operators of the A380, are you satisfied with the steps Airbus is taking with the wing crack issue?
A: We are a big player in this program. If it wasn't for Emirates and its order of 90 (A380s), maybe this program would not be able to go through. All the orders from the other airlines are very small compared to Emirates'. We believe in the product of the A380s.
We are very closely working with some of the problems with the A380 ... and I think Airbus is trying to do their best to rectify this problem. Because at the end of the day ... we always try to ensure the safety of our passengers.
Q: So you're not planning to adjust or delay any orders?
A: We have nothing planned. Nothing like that.
Q: You have a lot of jobs in Dubai. How do you manage all of that, and how do you keep your eye on Emirates?
A: I have good management. And I'm sure that they're doing all their best to keep the business growing, and the product quality, and ensure it's up to the standard we want to see.
Q: How often do you get to fly on your own airline?
A: Actually I was flying with Emirates to India about four weeks ago, five weeks ago.
Q: Always first class?
A: I think, because ... (Clears throat) ... Most of the time. Maybe once I flew business, or once I flew in the cockpit. But most of the time.