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Dubai and Emirates The Hub of Success

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Angus Taverner

Director- Global Affairs

Tag: Dubai economy Geostrategic Affairs UAE
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To a UK resident who doesnt live within 50 miles of London about 80% of the population the Emirates Airlines offer is so obviously attractive that one has to question why no one else is doing it.  Until they do, the carriers strategy will continue to pour people and resources into Dubai and the UAE. 
Emirates flies to 6 destinations in the UK London (Heathrow and Gatwick), Birmingham, Manchester, Newcastle and Glasgow. For anyone in the UK wanting to travel to Asia, Africa or Australasia but wondering whether to submit to the uncertainties of flying through the London hub will, instead, choose to transit through Dubaiespecially because Emirates spoke arrangement for long-distance jumps  minimizes plane changes.
Emirates has found a winning formula.  While partly the result of strike action and concerns over volcanic ash, British Airways holiday bookings this year are 50% down on the same time last year; this is a clear sign that competition is growing and BA is no longer the worlds favourite airline.
While Emirates may have been a major beneficiary of BAs mismanagement and misfortune, Emirates also testifies to Dubais location at the junction of three great continents Europe, Africa and Asia.  A glance at history suggests that Emirates is only the latest replication of what traders and merchants have done down the centuries.  The Silk Road had its many termini in the Middle East, and the Gulf particularly benefitted from this overland trade.  Steamers from round the world refitted in the northern emirates.  Early air flights refueled in Dubai.  More recently, when the UAE was a British protectorate, the Royal Air Force established a sizeable air base in Sharjah to service the UKs strategic interests East of Suez.  Again, this was no coincidence; it was an acknowledgement that the UAE is a key node on any intercontinental journey from Europe going east and back.
At its heart, Dubai is and always will be a trading hub and reshipment point.  But to maintain success amongst mounting regional competition Dubai also has to remain cost effective - low tariffs, minimally invasive regulations, and reasonable operating costs.  It has to offer an excellent operating environment service-focused with modern infrastructure as a welcoming entrepot, a desirable place to live and work.  Above all, it must remain politically stable, free from corruption and safe. Dubai meets these criteria in abundance.  And arguably its success over the past 3 decades is rooted in the worlds recognition and ruthless exploitation of this fact.
When Emirates started operations in 1985, few predicted the global presence that it would achieve. But it has obviously benefitted, not only from an unswerving initial vision of its future but also from Dubais parallel emergence as an international transport node.  Since Dubai first proclaimed build it and they will come, people have too often misunderstood the breadth of this idea.  Dubai is not just a built environment; it has also been about building a logistics infrastructure for air and sea that attracts both people and freight.
Some may have been surprised when Emirates announced recently that it is to buy a further 32 A380 Airbus aircraft an order that will grow its super-jumbo fleet to 90 by 2017 and raise its total long haul stable to more than 400 aircraft.  But this is no exercise in hubris.  The world is continuing to travel and increasingly by Emirates, nearly the only airline to remain profitable during the global economic downturn. 
With truculent legacy airlines slow to accept a changed world and volcanic ash clouding their skies, national carriers such as British Airways are now looking in their rear-view mirrors with growing alarm and rightly so.  Large alliances of airlines used to dismiss Emirates as threatening only small, regional carriers.  Today, however, SkyTeam, Star, and OneWorld are joining the nationals in alleging that Emirates receives subsidies and other support from the Dubai authorities who, they claim, have used the airline to spearhead Dubais diversification of its economy.  Though Emirates began with a modest investment of government capital and two aircraft gratis, it quickly repaid the debt and has since handed Dubai a generous payment annually in lieu of taxes.  Even the privileged use of Dubais newest terminal, if cost-averaged, gives Emirates significantly less support than governments in Europe give to their national airlines. 
From camels to steam ships to super-jumbo jets, entrepreneurs of the northern Arabian Peninsula have long shown themselves masters of opportunity. 

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