Innovation is the key to growth
Interview with Sheikh Ahmed Bin Saeed Al Maktoum, CEO, Emirates Group
by John Defterios, CNN’s Emerging Market Editor and Correspondent
Dubai has a small share of the oil reserves that sit under the sands and offshore in the United Arab Emirates. This lack of hydro-carbon wealth led Dubai to become a transport, logistics, finance and tourism hub, accelerated under the leadership of Sheikh Mohammed bin Rashid Al Maktoum, the Ruler of Dubai and Vice President & Prime Minister of the United Arab Emirates.
A key member of his inner circle is Sheikh Ahmed Bin Saeed Al Maktoum, Chairman of Dubai Airports and Chairman & CEO, The Emirates Group who talked with John Defterios on the day Dubai Airports celebrated its billionth passenger arrival to closeout 2018.
JD - You singled out that it was very important to mark this milestone for Emirates: getting to the billionth passenger. Why was it so important do you think?
SA – It is a happy moment for everybody here as UAE nationals, for my boss especially, HH Sheikh Mohammed bin Rashid Al Maktoum, who really contributed a lot to what has happened here, especially in the last year. We see that one billionth today…it took us about 15 years to get to 500 million and 7 years to add another 500 million passenger and that is a big achievement. I really would like to say thank you to everybody who lives in the UAE and also internationally to those who have contributed this success. This would not have been achieved without all the foundations that we put here in Dubai.
JD - You mean the infrastructure all around the airport?
SA - Yes, of course, it is the infrastructure, what we have built here, all these beautiful terminals, the duty free, the airline, everybody has really contributed to this success. And it is an achievement that will be there to make it happen again and again, maybe in a shorter period of time.
JD – If I look at the billionth passenger, in the last seven years you have accomplished half of that, in about half that time, you had double digit growth. How do you revive now that growth to remain double digit and sustain it?
SA – To sustain any business I think you have to think about innovation, you have to make the place very friendly for the customer and do that by innovating, making it an easy place to come in, to live, to use the facility here and (give them) what they are looking for. It is always about the customer and the more you please your customers the more they will keep coming.
JD – You have Dubai 2020 Expo and you are expecting 25 million visitors. How does it feed in to the airport and the airline where you are group chief executive of Emirates?
SA - The expo will always be a milestone for the UAE and the region and we are pleased that we won it. It is only now less than two years before the opening. We have signed many agreements with many countries that will have their pavilions here…more than 170 countries so far, maybe higher than that number. We will see 25 million visiting the event, there will also be educational activities for kids at schools, this is the focus: connecting minds, creating the future.
JD - The US Federal Reserve raised interest rates again and is putting pressure on emerging market currencies and you are a bridge between East and West. It hit your first half results. As the CEO of Emirates Airlines, how do you buffer such a shock to the global economy?
SA – As you know ours is a dollar based economy, we have always had that challenge when it comes to currency, as you have seen with the dollar being very strong…we have operations in Europe, Africa, everywhere and those revenues are transferred into dollars, there are losses there, but this is how it has been for the last 30 years. Now in much bigger terms I would say, so it is always about currencies and oil prices affecting the airlines, but we always have to find ways to maneuver and improve the yield and demand to come.
JD – Oil prices are so important for the Middle East region as producers, but as a carrier you have a different view of it. What is the sweet spot or the Goldilocks’ price for oil where it is a win-win for a carrier but also a country?
SA – Dubai has never been dependent on oil, it has always had very little oil. Dubai has always been in the business of tourism, exports, finance and we have had many new businesses in the last ten years supporting our economy. I always say it would be less than 60 dollars, that would be key for everybody.
JD - Why do you say that?
SA - I think if you go higher it would affect a lot of businesses. It depends where you sit, if you are a seller or a buyer, or you are a customer. For us, as a big airline, we consume a lot of fuel every day.
JD - So you would say that volatility is the booby trap, something around 60 would work for you?
SA – It is always the volatility and the market, and that is why you see the price hikes some years above 140 and then it went down almost to 30 dollars. Really something in between would be the right price.
JD - Dubai is like a Singapore, you are dependent on globalization. You must be very concerned when you see the United States and China, the number one and number two economies in the world, having these trade tensions. Would it really ripple through your economy if it gets out of control?
SA – Yes, I think today Dubai is an international brand in any business and it will always be affected by whatever goes around in the world. I do not think you are immune or secure regardless of where you are. So any problem, in America or in Europe, somewhere in the East, or even in Australia or New Zealand, will affect your market somehow, but you cannot sit there and do nothing about it. You really have to stimulate business, you have to make sure you have adapted your strategy for the future so that you have that space to maneuver and bring the boat to a safer place.
JD – Give us a sense as a businessman: does this feel like 2008-9-10 or did we learn a lot less about the global financial crisis? People worry a lot about growth globally in 2019. What is your instinct?
SA – I think It helps that you see the market will be more competitive, everybody will do their best to be able to capture the business, everybody will work on their costs. I think cost is the element that you need to look at all the time regardless of good times or bad times.
JD – You are not expecting a global shock though like we saw ten years ago that was led on Wall Street?
SA - You know I always remain optimistic on the market and what happens next, in the year to come.
Interview published courtesy of CNN