The story and success of Emirates Airline is so intertwined with the incredible development and the envious growth of Dubai as a cosmopolitan city that keeps setting new global benchmarks in urban development and living. The airline has achieved phenomenal growth in the three decades that it has been in operation. Emirates maintained its rapid growth momentum despite geopolitical unrest in the region, volatile global economies and in a prolonged low oil price scenario.
From what started off as a two wet-leased aircraft from Pakistan International Airlines in 1985 and flying to Karachi, New Delhi and Bombay, it’s been a phenomenal journey for Emirates in the last 31 years. The growth has been extraordinary even for the cargo operations of the airline.
Emirates SkyCargo’s route network connects cargo customers to over 150 cities in 82 countries on six continents and operate in many of the world’s fastest developing markets, including 27 gateways in Africa, 18 in South Asia, 16 in the Middle East, 24 in the Far East, 7 in Australasia, 41 in Europe and 20 in North and South America.
The cargo hold capacity comprises Emirates’ fleet of over 245 aircraft, including 15 freighters –13 Boeing 777-Fs and two B747-400ERFs.
In the 2015-16 financial year Emirates SkyCargo recorded a 6 percent increase in airfreight and uplifted 2.5 million tones of cargo. It contributed 14 percent of the airline’s total transport revenue in the same year.
In an exclusive interview NABIL SULTAN, Emirates Divisional Senior Vice President for Cargo, speaks to REJI JOHN about creating value for its customers, constantly innovating to offer the best solutions and to invest in world class facility for the air cargo industry. Sultan opens up on working in India and what he learnt from a complex, dynamic and emerging market. Edited excerpts.
What is your assessment of the current concern of over capacity and what do you think will be the impact of supply-demand equation on profitability of air cargo industry?
Going through the economical cycles, you will always have the good times and the bad times. The question is what you do during the bad times when the demand slows down. You have excess capacity. And then what do you do during good times when the demand is strong and you readily have that capacity available. You are then able to leverage that. That is why we are focusing on products and ensuring that our investments are there. We actually are able to provide solutions to different verticals. We are closer to the customers and understand their requirement and be able to align some of our products to their requirements. These are things that help you in the downturn of the economy. We have seen a decline in China and in different parts of the world. Despite the decline in overall volume, on Emirates we have actually seen an increase in tonnage. Year on year we have grown almost by 6 percent which is incredible during these difficult times. It clearly shows the fact that if we are able to work with the customers and understand their needs and be able to address their issues with right solutions you still be able to sustain the business even during difficult times. I think that is what we have done to weather this difficult condition and be able to overcome the challenge. No doubt, yield has been impacted simply because there is excess capacity. But I honestly believe that customers want the security and safety of their cargo they are shipping. They want on time delivery and that is why they are choosing the mode of air freight transportation. More important is the transparency of the whole supply chain journey that we are able to offer to our customers. That has a value, customer seems to understand and they are willing to pay for it.
There is a consistent decline in the air cargo growth numbers despite low oil price. Middle Eastern carriers continue to perform better than others. What according to you is aiding such performance numbers?
I hope we continue to perform well. This isn’t just about the carrier. Dubai is a dynamic city. Take the example of the pharma facility we have just launched. Dubai is already positioned as a major healthcare centre in the region. Major pharmaceutical manufacturers are basing themselves in Dubai. Because they see Dubai as an ideal distribution centre for them to be here and make use of the vast Emirates network – 150 destinations, multiple frequencies to lot of cities, substantial capacity that gets offered with 777. With all of these known facts it is quite common for any business to take advantage of this huge massive network where you have access to every single market in the world with the shortest elapse time. Pharma companies based in Dubai obviously require the infrastructure, and one of the key integral parts of that infrastructure is the capability of transportation and if you are able to provide that, it is a no brainer. It just makes perfect sense. A part of our success is because of the initiatives taken by the government itself on different industry verticals. That really helps us.
Emirates SkyCargo contributed 14 percent to the airline’s total transport revenue in 2015-16. With substantial investment in creating and enhancing facilities and products, what’s the target you have set for SkyCargo in terms of volume and revenue growth?
Of course we have a target, we have clearly defined objectives and strategies, part of which is ensuring that our products are strong enough. We make sure our positioning is always strong in every single market we operate. That is to me is an ongoing day to day activity. So far, looking at the global decline in tonnage versus our growth it clearly demonstrates that we are able to still project our market share perhaps with much better yield that other competitors. That tells the story.
Innovation and investments drive Emirates SkyCargo’s success. What are some of the specific initiatives to offer better cargo service to your customers?
We all recognise that the retail world out there is changing dramatically. E-commerce is a huge revolution and it is an emerging trend. As an airline and as a logistics service provider, we need to find the right solution to ensure that we again position correctly. I think gone are the days of transporting cargo, it is now about being specialised in specific verticals and work with manufactures and retailers to actually to work with them as partners and understand their business model and be able to innovate and create the right products for them. I think we are capable of doing that. Dubai is perfectly positioned for that. We have that opportunity now. We are building a whole new airport in Dubai South. It just gives us another opportunity to create the right infrastructure to be able to address the logistics requirement. So the key is to remain focused. We have to remain focused on our customers.
You have joined CargoiQ, an IATA initiative, what are some of your thoughts on creating standardisation for the industry, setting industry benchmarks?
For us we have moved a long way in ensuring that the days of delivering as booked are gone. For us we now look at delivering as promised. How do we do that with such complex network and multiple frequencies? What are the measures that we need to put in place? Today we have the confidence in ensuring that we are capable of delivering as promised. The reason is we have multiple frequencies. If you miss your shipment on the first slot, there is always a second flight. We have various options to get your commodity to final destination in the most efficient way. Which probably others don’t have. It is this that gives us the confidence in joining CargoiQ. It is nothing like setting world standard of KPIs that becomes the standard of measuring the quality of any freight forwarding transportation company. That is how the customer should judge what you deliver by the end of the day. To me that is a perfect way of ensuring everyone is reading from the same book. It is not that airlines are positioning rates out there without really understanding what goes behind that rate. I think we are perfectly positioned from the product offering point of view to ensure that we can deliver as promised. Today our flown cargo as booked sits almost at 98 to 99 percent. No airline in the world is able to achieve that. We deliver. It is a perfect thing for us to champion and take control of.
From what started off as a two wet-leased aircraft from Pakistan International Airlines in 1985, it’s been a phenomenal journey for Emirates in the last 31 years and you have been part of this success for 26 years. When you look back what would you like to consider as key highlights of this great airline?
Working in India is something that I will never forget. It was a huge learning for me. It was a good experience. For me the opportunity to work in a complex, dynamic and emerging market was always amazing. These are some of the experiences that I personally take with great pride. It really opens up your eyes. If you don’t work in markets like these you miss something. Eventually that makes someone a complete person. For us as a company we have lot of individuals like me, who have grown through the ranks, who have been around for long and worked abroad. Now many of them are back here at the headquarters. That is a huge asset for the airline in terms of having individuals with that kind of experiences.
As a leader at Emirates SkyCargo what are some of the things that you are doing right to make Emirates SkyCargo the leader?
When it comes to leadership, I believe it is to ensure that the people are with you. They are working with you. This is quite important to me personally. Individuals are willing to work hard as long as you support them. We have a strong culture of belonging and loyalty. Creating that loyalty, which Emirates is good at. To me that has a huge value. We have people going out of their way to do things. If you get people to do that what more can you ask for? It is incredible. Any organisation with that kind of DNA would have to be successful. There are no two ways about it.