Someone's doing alright in this industry

Dubai might not be that big by size or population, but it’s increasingly featuring on the international business stage. Recently the Dubai Investment Group bid for the bankrupt futures brokerage unit of Refco as well as purchasing a fair bit of real estate, most notably, the Essex house, one of Manhattan’s top hotels.

But it is not just on the ground that Dubai is making their mark, they seem to be flourishing in the skies too. Emirates, a Dubai based airline that is owned by the ruling family seems to be doing pretty well at a time when other airlines are scrambling to survive.

So what’s their magic receipe?

Geographically, its hub could not be better located, and has enabled the airline to build an impressive flight network linking the US with Asia, and Europe to Australia. As a result , more and more passengers seem to be connecting here, as it provides such an appealing alternative to London’s Heathrow airport. First, it is much less busy than its British counterpart and second, and maybe even more important, there is that small difference in climate which lends itself so well to a few days relaxing on the beach. (Sorry, the Channel doesn’t quite cut it.)

Location however has not been the sole reason for Emirates success, the company’s low cost base is just as much to blame.

At a time when many of the US legacy airlines are citing high fuel and staff costs as reasons for their poor results, Emirates is running at costs that are actually closer to the ‘no-frills, low-cost’ airlines, than to someone like British Airlines, according to the Economist.

Maybe they could teach the US legacy airlines a trick or two, although given a big part is due to low staff costs as a result of a lack of unions in Dubai coupled with an abundance of cheap labor from places such as Pakistan and India, this might be tricky.