Emirates' big plans: N.Y. is 'just the start'

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n the context of Dubai's go-for-broke culture, Emirates' global ambition -- taking another big step with the June 1 launch of nonstop service from New York -- seems about as risky as jumping to the floor from the second step.

True, the launch comes at a particularly tumultuous time in U.S.-Middle East relations, even by historical standards, and the airline's first U.S. service is from a city still psychologically scarred by 9/11.

True, also, is that the Dubai-based airline's marketing efforts will be challenged by U.S. fears of the Middle East and by Middle East citizens' worries about traveling to a country seen as unwelcoming to visitors from the region.

Dubai, however, is a place that thinks big, with a capital B-I-G, and then proceeds no-holds-barred on the ideas its leaders decide represent an acceptable risk.

In this rapidly developing emirate, where officials boast of the number of cranes in use, Dubai sometimes sets the bar so high it can top only itself.

It is not enough that developers have projects under way that will give Dubai the Middle East's first indoor ski resort next year, the world's first underwater hotel in 2006 and the world's tallest building in 2008. Nor is it enough to embark on a seven-year project to build Dubai Land, twice the size of Walt Disney World, to attract Middle Easterners, Asians and Africans who might otherwise go to U.S. or European theme parks.

Dubai is topping all of that with the construction of two palm tree-shaped, man-made islands, the first one three miles in length and width, the second about 50% larger. Together, they will add about 74 miles of coastline and provide a home to more than 60 luxury hotels, 5,000 beachside villas and 5,000 shoreline apartments as well as marinas, water theme parks and dive sites.

Dubai also is spending $1.8 billion for a development known as the World: 250 man-made islands positioned to re-create the shapes of all seven continents.

These aren't pipe dreams. Construction is well under way, and villas on the Palm islands have sold out.

Bold plans

The aspirations for government-owned Emirates are not on that scale, but for the airline industry, they may be just as bold.

The Emirates Group, which includes the airline and associated travel-related companies, posted a record $429 million profit for the fiscal year ending March 31, on a 35.5% increase in revenue and a 23% increase in passengers to 10.4 million. In the past five years it has doubled its fleet to more than 60 aircraft and increased its destinations from 50 to more than 70.

Emirates, however, is just getting started.

The airline plans to add at least an aircraft a month for the rest of this decade, on course for a 130-aircraft fleet by 2012. That includes 45 A380 aircraft, which can carry more than 500 passengers in a three-class configuration.

Central location

Airline President Timothy Clark said Emirates sees itself as centrally located for travelers from China, Southeast Asia, Europe, the Russian Federation and Africa. That region has fueled the airline's growth, but the U.S. market is a new target.

Clark said Emirates is confident in its business plan regardless of any "trauma" in the region, noting it faced the same concerns and skepticism when it launched U.K. service in 1987 with five London (Gatwick) flights a week. Today, Emirates fills seven daily flights from London; two from Manchester, England; and one apiece from Birmingham, England, and Glasgow, Scotland.

"I'm paid to be bullish and fairly aggressive about how we go about market entry," Clark said. "New York is just the start."

Emirates already has plans to start San Francisco service in January, although that could be delayed if Emirates feels the need to add a second New York flight to accommodate demand.

Emirates also is eyeing service to Los Angeles, Chicago and Atlanta and perhaps Washington, said Ghaith Al Ghaith, executive vice president of commercial operations worldwide.

Banking on business

Emirates expects to fill the New York flights, and later its other U.S. services, in part with business travelers from oil, banking, construction and other businesses attracted to the rapid development and tax-free zone. The A340-500, with its posh new first and business classes for longer-distance travel, is designed to help in that regard.

Emirates also is counting on traffic from U.A.E. citizens attending U.S. colleges, Arab communities in the U.S. and travelers making one-stop connections to and from the U.S. The airline, for example, is advertising the new service heavily in India.

Emirates has 258 seats to fill on its A340, including 54 in first and business, but Clark said research shows the airline can do it easily, despite competition from Malaysia Airlines' thrice weekly flights from Newark.

Clark said GDS MIDT data shows 159,000 passenger movements a year between the U.S. and the U.A.E., 69% of it east of the Mississippi.

"We believe we will be profitable [on the New York route] almost immediately," he said.

Virtuoso performance

Emirates has maintained a sales office in the U.S. for 11 years, and Emirates Holidays is working with U.S. tour operators and Virtuoso agents to sell the new service. It plans to invest at least $2 billion in North America for equipment, services and marketing in the next several years. In Dubai, Emirates plans to post a billboard of a 462-foot-high Statue of Liberty on a major building.

Dubai Airport, with 105 airlines serving about 145 cities, has its own ambitious plan for the anticipated growth from Emirates and other carriers.

The airport welcomed 18 million passengers last year, expects to nearly double the number by 2010 and is undergoing a $4.1 billion project to expand the annual capacity to 65 million. About two-thirds of the passengers are expected to connect at the hub to other destinations, said Dale Griffith, senior vice president for Emirates Airport Services.

"We will be able to carry passengers from any point in the world to any point in the world, via Dubai," Griffith said, adding in typical Dubai fashion: "Dubai is going to be the center of the universe."

To contact reporter Andrew Compart, send e-mail to [email protected].

A Western oasis in the Middle East

DUBAI, United Arab Emirates -- Alcohol in hotel bars and restaurants, bikini-clad women at pools and beaches, sky-high buildings and engineering marvels, 32-five star hotels, more than 100 nationalities, and English widely spoken.

These are some of the surprises awaiting first-time U.S. visitors to Dubai, their views of the Middle East formed from television images and news of terrorism and fundamentalism, with little distinction by country. As one Ohio-born hotelier here put it, "You say Dubai, they think Saudi Arabia."

"It's not all about Afghanistan or Baghdad," Emirates president Tim Clark said. "Part of our [airline's] mission is to try to change the perception of what the Middle East is all about."

Some traditionalism does remain here. It is considered offensive to photograph Muslim women, many of whom wear a head-to-toe robe, and sometimes a facial veil. Many local men wear a white, loose-fitting, head-to-toe garment that is comfortable in hot weather. Public kissing is forbidden, and women touring in the city should dress conservatively.

But visitors also will see men and women in casual, Western-style garb. Many local women work, particularly in government, and all are free to drive and travel unescorted.

Expatriates on work visas are 80% of the population in Dubai, a millenniums-old trading center still attracting people from the region and world with jobs and no corporate or income taxes. For example, the Fairmont Hotel employs more than 35 nationalities and Emirates more than 100.

The combination of traditionalism and modernity makes visiting Dubai a "soft way" to "get behind the veil of Islam," said Royal Mirage general manager Olivier Louis. The best time to visit is November to April, when it's less hot. Americans aren't likely to travel this far for the beach resorts, but there are other attractions.

• Tax-free sales make shopping popular. The gold souk (market) is known for deals and glittering storefronts; the spice market imports from all over the Middle East.

• At Dubai Creek, a Gulf inlet that bisects the city, wooden dhows still transport goods to India, Pakistan and Africa, and tourists can sightsee on water taxis and dhow cruises.

• Tour operators can take visitors to the desert conservation area for dune driving, camel riding, animal viewing, sand-skiing or a moonlit barbecue. For a longer desert visit, try the 29-suite, spa-equipped Al Maha luxury resort (no children under 12).

• Some hotels are attractions. Burj Al Arab, on a man-made island, resembles a dhow's sail and is nearly as tall as the Empire State Building.

• Golf. Birdwatch. See horse or camel races. But also visit Dubai Museum to see how Dubai has changed. -- A.C.

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