Emirates

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JANUARY 29, 2014

JUAN ALCÁCER

JOHN CLAYTON

Emirates Airline: Connecting the Unconnected

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Introduction

Late afternoon was fading to dusk as Tim Clark, President of Emirates Airline, gazed out at the

large crowds mingling outside at the 2013 Dubai Airshow. Front and center at the event was the

official program launch of the Boeing 777X, a massive new hit thanks to Emirates’ record order of 150

new planes. Valued at $76 billion at list prices, this was the largest airplane deal ever inked. Letting

his thoughts drift, he noted, he imagined with pride these planes joining the collection of widebodied Emirates planes assembled on the tarmac of Dubai International Airport, ready to ferry

passengers from Europe, Asia, Africa, the Americas and the Gulf to their respective destinations. This

is the face of the global economy, he thought to himself, as he marveled at his company’s success.

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Emirates was indeed a global success story. In just twenty-five years the airline had grown to

become the third-largest airline globally by capacity and the largest by number of international

passengers.1 (See Exhibit 1). Twenty-three new routes were added in 2012 and 2013,2 and capacity

growth was expected to increase by 18.4% in 2013 thanks to deliveries of new aircraft, including the

new A380s deployed to over 20 destinations.3 Emirates anticipated that its meteoric growth would

continue and was building its fleet accordingly: with 41 A380s integrated into its fleet thus far,

another 99 were scheduled for delivery in the coming years (See Exhibit 2).4

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At the same time, several trends threatened to stymy the airline’s growth. Chief among them were

the new 777Xs and A380s themselves. How would Emirates deploy these craft amongst its existing

fleet and across new routes? Was investing over $117 billion in a fleet expansion over the last three

years (including $76 billion on 777Xs and $23 billion on A380s this year alone) a shrewd strategic...