Jeremy Hobson: Well now to one company that’s based in the emerging world, but is making new investments in the United States. Emirates airlines is benefiting from a focus on high-paying business travelers to beat the odds in the airline industry. The company made $1.5 billion last year — compare with say American Airlines, which lost almost a half billion dollars.
For more, we’re joined by Jim Baxter, who is the vice president for North America at Emirates. He’s with us here in our Los Angeles studio. Good morning.
Jim Baxter: Good morning.
Hobson: You’re adding new routes from the United States — just this week you’re announcing that you’re going to be flying from Dallas and from Seattle. Why would you be adding new routes in a country that is looking at economic growth of just a percent, a percent and a half this year?
Baxter: Well we’re convinced that in the long-term continued growth of travel — of business travel in particular — so yes, short-term economic problems, but this is just a beginning, Jeremy. There’ll be more expansion in the U.S. for Emirates.
Hobson: What about the emerging world? How much faster is that growing for an airline like Emirates that the United States or Europe or some of the traditional developed economies?
Baxter: It’s growing very fast, in fact one of the keys if you take a look at the Emirates route system, we now fly to 21 destinations in Africa, we fly to 11 cities in India, we fly to China, Manila, Australia —
Hobson: And you’re filling up these planes?
Baxter: And we’re filling up these planes. The demand particularly for business travel has been strong, remains strong, and we think it will continue to be that way.
Hobson: A lot of the big legacy carriers as they’re called here in the U.S., American Airlines, United, Delta, they face competition from low-cost carriers like Southwest. Do you guys have that kind of competition?
Baxter: There’s a beginning of some of that competition in the Middle East Gulf — Fly Dubai is low-cost carrier — but we see it as enlarging the size of the market. So more traffic to and from Dubai, which is our major hub, we think is a good thing.
Hobson: What do you think is the biggest challenge for Emirates going forward?
Baxter: We are an airline who does not belong to an alliance. So you have the SkyTeam, Oneworld — increasingly they are working together to leverage each other’s product. So the fact that we’re a stand alone makes our task a little more difficult on one hand, on the other hand it allows us to control our destiny.
Hobson: Jim Baxter is vice president for North America at Emirates Airlines, thanks so much for coming in.
Baxter: Thank you for having me.
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