Dubai’s infrastructure and liberal government policies

According to the Government of Dubai, Dubai has changed dramatically over the last three decades, becoming a major business centre with a more dynamic and diversified economy. Dubai enjoys a strategic location and serves as the biggest re-exporting centre in the Middle East. Low logistical and operational costs and Dubai’s infrastructure and liberal government policies attract investors in a big way. Activities such as trade, transport, tourism, industry and finance have shown steady growth and helped the economy to achieve a high degree of expansion and diversification. This government in its policy of diversification away from oil of the country’s economy has pledged that trade, transportation, communication, and financial services business though moderate throughout 2016 would most probably gather pace 2017. In the meantime, its flag carrier Emirates, refer our article Brexit and the Emirates Airline, seems lately to encounter some difficulties as highlighted by the following Bloomberg’s article : Is Emirates Airline Running Out of Sky?

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According to the Government of Dubai, Dubai has changed dramatically over the last three decades, becoming a major business centre with a more dynamic and diversified economy. Dubai enjoys a strategic location and serves as the biggest re-exporting centre in the Middle East.   Low logistical and operational costs and Dubai’s infrastructure and liberal government policies attract investors in a big way. Activities such as trade, transport, tourism, industry and finance have shown steady growth and helped the economy to achieve a high degree of expansion and diversification.

This government in its policy of diversification away from oil of the country’s economy has pledged that trade, transportation, communication, and financial services business though moderate throughout 2016 would most probably gather pace 2017.

In the meantime, its flag carrier Emirates, refer our article Brexit and the Emirates Airline, seems lately to encounter some difficulties as highlighted by the following Bloomberg’s article.  Excerpts of it are reproduced here.

The above image is of Photographer Greg White for Bloomberg Businessweek.

Is Emirates Airline Running Out of Sky?

It flies the fanciest product on the biggest planes on the longest routes. There might not be much more room to soar

[. . .] Dubai International runs at full speed 24 hours a day to help Emirates serve a network that spans from Buenos Aires to Christchurch, New Zealand.

by Matthew Campbell on January 5, 2017, 5:01 AM GMT

The airline, which is based in Dubai and owned by its government, has become the world’s largest long-haul carrier by never relaxing its grip—on employees, on airplane manufacturers, or on its own ambitions. Emirates recently configured a plane to seat 615 passengers, a record, and flies the world’s most epic nonstop route, an 8,824-mile arc from Dubai to Auckland. Emirates is essentially the only buyer of the largest commercial airliner, the Airbus A380, which it gilds with stand-up cocktail bars and in-flight showers. For every flight departing Dubai, as cabin crew head to their airplanes, the last room they traverse is a hall with mirrors on one side and windows to the tarmac on the other. The space allows workers to inspect themselves for perfection against a backdrop of government-owned taxiways thick with Emirates jets. That’s the airline, in one image: glamour and ambition in a framework of absolute control. . .

 

Since 1985, Emirates has grown from a two-plane operation at a desert airstrip into a force whose every movement rumbles through global aviation. The airline’s growth is inseparable from that of Dubai, with both straining the laws of financial and physical gravity. The company’s chairman is Sheikh Ahmed bin Saeed Al Maktoum, the uncle of Dubai’s absolute monarch. He also runs the airport authority, the aviation regulator, and the city’s largest bank, should Emirates ever need a loan. Out in the desert, a half-hour drive from the coast’s skyscrapers and malls, the government is building a $32 billion, five-runway megahub precisely to Emirates’ specifications. Its ambitions are consonant with its name: Dubai World Central. The project will have a capacity of 220 million passengers per year, four times the number that New York’s John F. Kennedy International Airport serves today. Two-thirds of humanity lives within the radius of an eight-hour flight. Among industry veterans, the airline’s rise inspires a respectful awe. “Emirates is unprecedented,” says Tony Tyler, a former chief executive officer of Hong Kong’s Cathay Pacific. “There’s never been anything as huge.”

Yet as Emirates dictates new standards of technology, luxury, and range, it’s finding that more and more is beyond its mastery. Conceived as a titanic bet on the growth of what development economists call the Global South—the Middle East, Africa, South Asia, and Latin America—the airline is at risk if those emerging markets don’t, in fact, emerge. Emirates in May reported its first-ever annual revenue decline and is cutting some of its plans for growth amid slackening demand from sub-Saharan Africa, Turkey, and Brazil. The slump has industry analysts wondering how Emirates will fill the staggering number of planes it has on order. The company has agreed to buy 50 A380s and 174 Boeing 777s, adding to the 92 and 148, respectively, it currently flies. By comparison, British Airways operates 12 A380s, and American Airlines, Delta, and United have zero.

 

The bigger threat may lie in the U.S., the world’s most lucrative travel market, where Emirates has been expanding aggressively. It flies to 11 cities, including Orlando, Boston, Seattle, and Dallas. Led by Delta, the U.S. Big Three are intensifying a lobbying campaign against Emirates and its smaller Persian Gulf rivals, Etihad Airways and Qatar Airways, collectively the ME3, seeking to curtail their access to American airports unless “unfair subsidies” are eliminated. Their argument, that deep-pocketed foreigners are threatening American jobs by flooding the market with subsidized capacity, was once seen in business circles as a long shot—but it happens to resonate precisely with President-elect Donald Trump’s stated view of the world. Similar efforts are afoot in Europe.

Those challenges may make the world less hospitable than ever to a company whose marketing projects a sunny globalism. With Trump and his ilk ascendant, one Emirates ad sums up a corporate ethos that feels increasingly at odds with the times: “Tomorrow thinks borders are so yesterday.” . . .

 

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