How Emirates found success with the most controversial jet in the world

By: Benjamin Zhang for Business Insider.

More than a decade after its maiden flight, the Airbus A380 superjumbo remains a major point of interest and curiosity for passengers and airline industry insiders alike.

As impressive and attention grabbing as the aircraft may be, it hasn’t had the same paradigm-shifting effect that the Boeing 747 had upon its debut decades earlier.

Most of the airlines around the world who either operate the A380 or are thinking about investing in the plane have struggled to figure out a way to maximize its revenue generating potential.

As a result, Airbus has struggled mightily over the past few years to find new customers for its flagship airliner.

However, the double-decker jet has no bigger supporter than Emirates Airlines.

Of the 319 orders Airbus has won for the super jumbo, 140 of them have come from the Dubai-based airline. In comparison, Singapore Airlines has the second largest order with 24 A380s.

Why does Emirates love the A380 so much?

“Airport congestion around the world is getting worse,” Emirates President Sir Tim Clark told Business Insider. “And up-gauging aircraft is a solution for this.”

Emirates’ business strategy involves funneling large masses of people to its palatial home base in Dubai and dispatching them to various destinations around the world. Often times, those destinations are either well-developed first world cities or under developed third-world cities, that are both plagued by airports bursting at the seams with people and planes.

Emirates Airbus A380.REUTERS/Phil Noble

According to Sir Tim Clark, the A380 allows Emirates to get ahead of congestion issues at major airport around the world. With infrastructure struggling to keep up with demand for landing slots and airport gates, the superjumbo allows the airline to increase passenger volume with fewer aircraft and fewer flights.

“It works great for our network structure’s long-haul to long-haul connections,” Emirates senior vice president for operations Hubert Frach told Business Insider in an interview. “It allows us to offer efficient connections between developing economies with well established economies.”

As a result, Emirates and its centrally located-Dubai base has become a gateway — connecting Europe and North America with Africa and Asia.

While other carriers operating the A380 have concerns over filling the double decker’s cavernous cabin, Emirates does not seem to have that concern.

“Although you can’t operate each and every destination with the aircraft, we do see the demand pull of the A380,” Frach said. “Take London for example. We operate nine A380 flights into London every day and, believe me, they are all full.”

And the strategy seems to be working. In May, Emirates announced a record $1.93 billion profit for the last fiscal year with a margin of 8.4%. Although it should be noted that Emirates, along with the rest of the airline industry, has benefited greatly from plummeting fuel costs.

In addition, the rapid growth of Emirates and its fellow Middle Eastern carriers Etihad and Qatar have come under criticism from American, United, and Delta Air Lines. The US3 allege that the ME3’s stellar performance and service are unfairly augmented by as much as $42 billion in subsidies over the past 10 years. The ME3 have denied these allegations.

Emirates president, Sir Tim Clark.REUTERS/Ahmed Jadallah

In addition to the operational benefits of the A380, it’s also a great marketing piece.

“At the Berlin Air Show, we usually bring a brand new A380 that’s just been delivered from the Airbus factory in Hamburg and the line to see the plane usually a mile long,” Sir Tim Clark told us while in New York for the US Open tennis tournament for which his airline is a major sponsor.

It’s a sentiment echoed by Frach.

“Every time I’m on an A380, I still see people taking selfies and photos of the plane,” the executive added. “It’s iconic and it’s a customer magnet.”

Emirates isn’t the only airline that understands the marketing power of the superjumbo. In May, Qatar Airways launched its inaugural flight to Atlanta — the home fortress for Delta, arguably the Middle Eastern airlines’ staunchest critic. Although the flight is normally operated by a smaller Boeing 777, Qatar decided to make a splash by rolling into town with a superjumbo — an aircraft Delta does not possess in its 800-plane fleet.

Etihad operates its glamour routes to London and New York using its A380s as well.

Why don’t more airlines buy the A380?

If the A380 works so well for Emirates, why don’t more airlines around the world commit to the plane?

“Since the great recession, airlines around the world are run by risk averse boards who don’t want to spend $400 million on a single plane,”  Clark said. “Here, we don’t have that, it’s just me and my boss (Emirates Group chairman H.H. Sheikh Ahmed bin Saeed Al Maktoum).”

Qatar Airbus A380 in Atlanta.Qatar Airways

Due to geography, Emirates operates only international flights and boasts a fleet of roughly 250 wide-body long haul jets. In addition to the world’s largest fleet of A380s, it also boasts the world’s largest fleet of Boeing 777s with more than 150 of the twin-engined jets.

However, the reality of the A380 is that it is the largest and most expensive airliner in the world at $428 million a plane. Boeing’s 777-9X is second at $400 million.

Even though it’s capable of offering its operators the lowest per-seat cost of any airliner in the world, its four-massive turbo fan engines are far from economical.

As a result, even Emirates’ well-financed neighbor Etihad have limited its fleet of A380s to just 10 planes.

“No, we’re done,” Etihad Aviation Group CEO James Hogan told Business Insider last year when asked whether he’d buy more A380s. “We just believe in two-engine technology — they are much more efficient.”

But for now, the Airbus A380 is alive and moving forward with its most important customer.

“We are taking another 50 or so A380s,” Clark said. “So we’re keeping the production line going.”