The Emirates Business Model
After Emirates rapidly turned Dubai into one of the world’s largest flight connection hubs, airlines around the world sought to replicate their success. Their business model — operating large-capacity aircraft on hub-and-spoke routes with Dubai at the center — enabled mass expansion at hyper-efficient levels. In this article I will examine Emirates’ path to world domination, as well as take a closer look at some of the other airlines attempting similar strategies. In a rapidly globalizing world with thousands of new entrants to the transportation industry, business plans and routing can be make or break for airlines.
Hub and Spoke
The rapid growth of Emirates has put hub and spoke strategy into the aviation limelight, as they were able to utilize it to build one of the largest route networks in the world. The strategy is actually quite simple: an airline chooses its main “hub” city, and then runs all flights to or from that city, like spokes on a bicycle wheel. Instead of launching flights between endless amounts of city pairs, airlines like Emirates are able to direct passengers through their hub and conveniently connect them to their final destination. The strategy is most effective when airlines operate large capacity aircraft on popular routes, such as Emirates’ high-frequency London-Dubai flight.
Example: Let’s say a passenger wants to fly from Copenhagen, Denmark to Lahore, Pakistan. The demand for this route is not high enough to warrant a nonstop flight, so the passenger might consider purchasing a connecting flight on Emirates. Because Emirates operates a flight from Dubai to Lahore, passengers can fly to Lahore via Dubai from any other city on the airline’s network.
Emirates’ route map sticks to the hub and spoke strategy like it’s scripture; all flights begin or end at Dubai International Airport, with very few exceptions (direct flights with fuel stops, such as Newark to Dubai via Milan).