A four-eyed look into the airline that owns all wide-body fleet

The interview with Senior Vice President in charge of commercial operations covering Europe and the Russian Federation, Mr. Thierry Aucoc, took place at Emirates’ headquarters located next to the Dubai International Airport.

Mr. Thierry Aucoc - Emirates's Senior Vice President in charge of commercial operations covering Europe and the Russian Federation

Below is an excerpt of the one-hour long conversation:

Thuc Minh: Sir, you are a veteran in the aviation industry, having worked for several European airlines for a long time. Why did you choose to work for Emirates and live in Dubai?

Thierry Aucoc: 12 years ago, I started to work for Emirates, coming from AirFrance, KLM, Alitalia, etc. With Emirates, I started as country general manager for France, followed by Italy. Then, I’ve had the opportunity to take responsibility for commercial operations for Europe and Russia, based in Dubai.

What I like about Emirates is the consistency in its politics, I mean commercial politics. The first CEO of Emirates is still here since its inception 1985 while the current CEO is since 2002. That ensures a continuity. At many airlines, CEO is changed very often, every 3-4-5 years, maximum perhaps 10 years. That obviously creates some changes in their strategy. Here at Emirates, it's very stable and consistent.

We want to become a big international carrier. We want to develop our hub in Dubai not only as a transit hub but also as a destination for 16 million foreign visitors per year. That figure may increase this year.

We want to offer services of quality. We don't want to commoditize too much, absolutely not. We offer first class, business class, premium economy, and economy class. Everybody says even our economy class is “very good economy”.

We performed very well last year, with big numbers. We carried 45 million passengers, generating a revenue of $29.5 billion and $3 billion as profit. However, we stay with the same mentality: no arrogance, focus on clients and deliver good services.

I'm very happy 12 years later about the choice. Joining Emirates for me is joining a very performant and proactive airline with an extremely strong brand and a bright future. Among the airlines of the world, we are one of the strongest brands.

When Emirates opens routes in new markets, usually as I observe, you start by code-sharing with local airlines which may not be on par with Emirates. Does massive expansion objective compromise the airline’s reputation and quality of service?

It depends. For many destinations, we started without any code-share. We have different forms of cooperation with other carriers.

The first one is partnership in the form of code-share with advanced airlines. For example, we do a good four-point operation with the United Airline in the US, with Air Canada, with Qantas of Australia, with Malaysia Airlines, etc. When we do code-share, we choose very reliable airlines through an audit process. You cannot put your code beside an airline which is not perfectly checked and in line with your requirements.

The second type is interline agreements where we accept tickets from other local airlines. We have that with Maldivian of Maldives, with Batik air of Malaysia, and Aegean of Greece. It is very good to have this as we will never fly our B777 to Heraklion or Mykonos islands in Greece for instance. But our passengers can fly from Dubai or from anywhere to Athens, then Aegean will fly them to those islands.

In Europe, we also partner with train operators in France, Germany, Spain, and Italy for the same reason. For example, if you want to go from Lille in France to Dubai, you must go to Paris first. You don’t fly Lille-Paris, but you take the train. In that case, you buy only 1 ticket for two types of transport to travel from Lille to Dubai via Paris.

We tried to cover as much as possible. But when we open a new route, we do a very serious analysis first, with data from the airports. When we see there is a potential, possible to operate and we have available aircraft, then we start. It's not starting a new point just because that would be nice to have one more point on the map. All the calculations are done far in advance to ensure the new route will be profitable.

Emirates aspires to become the world's No. 1 passenger and cargo airline

However, you may not to be able to open routes to wherever you want, as some countries may not like to open their skies!

Ideally, we would like to do that everywhere, but it's not open skies everywhere, as you know. Very often we have to negotiate with the states in order to have the rights to operate. In some countries it's easy. In others, it’s more complex. In Germany, we have the rights for four points, Munich, Frankfurt, Dusseldorf, and Hamburg where we can operate as many flights within the points as we want. But we cannot have a fifth one. Same in France, we have rights to Paris, Lyon and Nice. If we want to increase the number of flights, it's more restrictive.

When we operate an international flight to/from a city, that changes the face of the locality. For instance, Lyon when we arrived, there were just trains and very few flights. We don’t fly within Europe, but to Dubai, and from Dubai you can go to Australia, India, Pakistan, etc. Since we opened the route, I saw all major corporates came there, because we have passengers in India, in Singapore who don’t have to go to Paris before reaching Lyon.

Some countries may not see the total real positive impact, but see this as threats, as competition with local airlines. But competition is good. If you have more competition, you will have more people coming to your localities, and everybody's happy.

So, we'll continue with that mentality. When we have new aircraft, we’ll have new expansion projects.

You are very confident in your expansion strategies?

Yes. Then we have some aspects to consider very seriously. Environment, for example. Anything we can do to be more eco-responsible, we’ll do that. We use less plastic and recuperate them for recycling, we wash and reuse items more than throwing them away.

Probably the major progress we can make for the environment however is using biofuel or equivalents, called sustainable aviation fuel, or SAF. We are investing $200 million in research on this. We've done tests with SAF for our flights. But not everything is in our hands, because we don’t produce fuel. We're dependent on fuel production companies.

Emirates A380 demonstration flight with 100% Sustainable Aviation Fuel

As you’ve touched on environmental issue, I have to say that I think there are a few concrete things you can improve immediately on your flights. I flew from Geneva to Dubai with Emirates, and I saw your blankets and headphones are packed with plastics, which I don’t think necessary. I felt guilty every time I tore down a plastic.

Yes, but it is necessary.

You want to say for hygiene reasons? No, in my opinion, I don't think so.

And then what? How do you store them?

You clean them, sterilize them, or do whatever to have them clean from previous use. Then you store them in a clean room and deliver to each passenger with a paper string around each blanket. As for the headphones, which are very big, you can deliver them to each passenger directly or hang them on a high position in their seat. That's enough, rather than encapsulating them with very big plastics.

But we will recuperate the plastics, we will not throw them away.

But you still have to recycle them. Recycling is very expensive and polluting itself. Please reduce and reduce, first, if possible. Then try to reuse, not recycle!

Yes, we’ve reduced plastic at maximum. But of course, any idea is always welcome. We take that idea, and we can propose internally. Again, our mentality is anything which is possible, we have to work on it.

Thank you. I hope next time travelling with Emirates, I won’t see that many plastics!

Now allow me to ask you another question: Emirates is state-owned, by a government which is very rich. Does this give you an upper leg in competitions and expansive strategies?

Emirates is not subsidized at all. It's exactly the contrary. We pay our profits to the owner of the company, which is the government of Dubai. We never lost money, we were profitable all the years since 1985, except the two years of COVID-19. State subsidies happened only once during the COVID pandemic, which is ¾ times less than that for many European, American carriers and others by their respective governments.

Second thing, some may believe that we have an advantage with jet fuel. No, the jet fuel is negotiated in the market in Singapore, and we pay for the fuel exactly like everybody else.

There is nothing to see with the fact of being state-owned. Many European airlines are still state-owned or at least a good part of the shares belongs to their states.

Why did Emirates decide to operate during the Covid knowing that the revenue could not cover the cost?

First, we stopped our operation during the COVID-19, but not that long. The loss was not because we were operating. The fact is that we lost because we did not operate some aircraft, not use the staff and the structures that we had to pay for monthly without generating revenue.

Why we restarted to fly regardless of closure everywhere? We restarted because Dubai was re-open. Our flights to Dubai were mainly. Does it mean that we took risks? Absolutely not. It was extremely controlled in Dubai. We were among few destinations open for tourists in the world then, but we didn't have any COVID cases from passengers entering Dubai, absolutely not.

We had done so knowing two good things: First, it was an opportunity for those who wanted to travel to come to Dubai. That’s good for us to promote Dubai. Second, nothing is sadder than seeing your aircraft dying in the airport. And we also believed that when all this stopped, the demand would increase upright.

But at that time, no one was totally convinced, thus they re-leased their aircraft and fired a lot of employees. And then when it restarted, they continued to lose, they went bankrupt. For us, we were ready. You see, after all that, many people know the reputation of Dubai. Never before, was the name of Dubai so well known.

Cargo transportation activities bring great profits during the Covid-19 crisis

Please tell me a little bit about your cargo activities.

We have a big activity with Emirates SkyCargo. It's around $5 billion, accounting for about 16% of our total revenues. As long as we have big aircraft, the B777s, all carry cargo. We have B777 freighters flying to several points on a route. So, it’s very flexible, there are big things to take here, and big things to deliver there. We have B777 passenger aircraft. Even with full passengers, we can still carry 35 tons of fresh salmon from Norway to Dubai for instance. Then we have the A380s with less space for cargo, yet still around 10 tons.

During the COVID, we had 12 full freighters. We also changed some passenger planes by removing the seats to have additional space for cargo. Some we even did not remove the seats, but took clean and dry cargo on the seats which were protected. We used around 35 or 40 B777 dedicated to cargo then. We transported vaccines, medicines and medical stuffs. That generated very high revenue for us during the crisis.

We are absolutely a reference for cargo. We are transporting everything, notably cars for F1 race, very luxury cars, and horses the races, etc. Very pricey items!

How DP World, Dubai’s port management conglomerates, gives you some advantages in term of cargo transport?

You mean sea-air transport? Yes, we have the sea-air and air-sea which are working well, because our ports are close to the airports and immediate to the sea.

Dubai is not living with oil. Dubai is living with tourism, finance, real estate and logistics. Logistics starts with Emirates and continues with DP World. It continues also with any kind of transport you can imagine, such as trucks, rails. Definitely this is the logic Dubai wants to develop. And it is important to create these connections.

Thank you very much for the conversation.

Thuc Minh

Journalist based in Switzerland, founder and president of the non-profit association Swiss-Vietnamese Business Gateway (SVBG)