Emirates, a rising star among airlines, ordered 32 additional A380s from Airbus this week. Airbus recently received its 10th A380 delivery and augments its previous order of 58 super jumbos. The deal, worth $11.5 BN, was announced at the Berlin Air Show.
Emirates Airline Group Chairman and CEO His Highness Sheikh Ahmed Bin Saeed Al-Maktoum said the latest order “affirms Emirates’ strategy to become a world leading carrier and to further establish Dubai as a central gateway to worldwide air travel” and called A380 as its “flagship”.
I’d say that Emirates is already a world leading carrier.
If it was cheap, I’d short Emirates. Dubai was built on debt and is in rough shape right now. The supersized hub/spoke model run off A380’s seems inefficient vs mid-hub routes with 787’s. Just my opinion, but I don’t think Emirates is viable in the long term.
That being said, I’d pay significant miles to give their suites a try…
@Erich: You may be right. They just reported a healthy profit, though, and it seems there is still room for growth. I would also pay significant miles to give their suites a try. Right now with CO you can mix EK and Star awards, but you cannot on UA. Maybe after the merger, this option will be available.
@Erich: you ARE kidding, right?
The US – for example – has a much worse deficit each year.
In 2009 the UAE had a lower debt rate (in ratio to GDP) than the US and most western countries.
Consequently you should short the US as well (and 41 other countries as well – whose dept ratio is worse than the UAE’s.
Obviously other Emirates (other than Dubai) are forming the UAE so the numbers might be a bit diluted.
If you want my source of information:
CIA Factbook (sub bullet economics)
The 2009 / 2010 figures are not even included – it will be funny to see countries like the US/UK/Greece and the others.
Dubai has a bad press – esp. in the western hemisphere – and they were always very aggressive with their projects.
But they DO have income streams to balance their expenditures and the country is not worse off many others.
However, companies – in the UAE as well as in developed western markets – go bust all the time because they are managed badly (see banks in the US/UK/Europe, AIG, Enron, all those ‘have no real business plan’ airlines and dotcoms…
Just my 2cts.
To be clear, my gut feeling is that Emirates (the airline) has a questionable long term strategy. I just don’t see Dubai having the originating/destination traffic, nor being able to convince the flying masses to connect through Dubai. Dubai makes for a poor central hub as it is not directly between any two major economic areas (unless you count Europe-Australia).
Also, I feel that the 787 will be a better aircraft as it will make mid-market longhaul routes possible and increase frequency on the major routes.
The UAE as a state does have plenty of oil revenue, but I believe their efforts to develop non-oil based industry are coming up short. This may be the effects of the Western media, but all I’ve heard about recently are stories of everybody fleeing the area, from major corporations, through ex patriots, to even the migrant workers building the city.
Dubai is perfectly located to take advantage of traffic between Asia and Europe.
You may be entirely unaware that Asia is a major economic area but billions of other economically-active people aren’t.