Why Emirates’ Stockholm route will be a success

Skywards GoldGrand political visions aside, the news of Emirates commencing flights from Dubai to Sweden’s capital Stockholm is the best news for Stockholm Arlanda Airport this year. Of course, this is not only good news for the airport – but good news for Sweden and the UAE too.

UAE businesses will get access to the business capital of Northern Europe, whilst Swedes will enjoy greater fare competition on travel to Asia.

Why do I believe this will work then? Already, Qatar Airways and all major European carriers fly to Stockholm. Clearly, Emirates would not be starting a route unless it made good business sense to do so.

This is how I think they thought:

  • Airport size – Arlanda is the 22nd busiest airport in Europe, with more traffic than Berlin or Dublin, for instance.
  • Many Swedish businesses are big in Asia, and often have their Middle Eastern HQ in Dubai.
  • Leisure travel – Swedes like travelling to warmer places for vacation. That around 350 000 Swedes travel every year to Thailand is certainly something Emirates will look to tap into. Also, Sweden is home to a big Iranian community.
  • The location – it will feel more like travelling in the right direction, compared to going via London, Amsterdam or Paris. At least if you’re going to Asia, that is…

Against Emirates’ case:

  • Dubai International Airport. DXB is turning into a nightmare with its long walking distances, crowded waiting areas, shops and lounges and ridiculous waiting times at passport control.
  • Qatar Airways. QA has operated flights between Stockholm and Doha for a couple of years. It is likely that the additional competition from Emirates will not be met with indifference.

The transfer of freight flights to Al Maktoum International Airport in Jebel Ali, close to the Dubai Marina, will help to ease the pressure on Dubai International Airport. Also, Emirates new exclusive A380 terminal will go some way in alleviating the strain on the main terminal building.

Going forward, it is possible that the weakest link in Dubai’s airport capacity will be the landing and take-off slot availability.

Hopefully the route will be a success, and the ties between Sweden and the UAE can be strengthened.

Further reading:

http://www.emirates.com/se/English/about/news/news_detail.aspx?article=1188007&offset=0

The Art of Differentiation

Beating the competition through service differentiation is a topic that fascinates me deeply. Product is simply not enough.

Apple is known for making great products, but their whole service chain is equally impressive. I have a number of friends who tell good things about how Apple’s in-store customer care reps have resolved their  iPhone problems. These friends of mine will naturally give Apple repeat business.

Businesses use different strategies to differentiate themselves from the competition. RyanAir doesn’t try to be Lufthansa for a reason. Both are profitable, both fly people from point A to B. Their difference make them profitable as they fill different market needs.

The greatest differentiation challenge arises when you are competing for the same market, using   a nearly identical product,  in the same place, at roughly the same price. This is a challenge facing all businesses from telecom operators, to hotels and airlines.

Some would argue that it is then your people matter more than ever, and I am prepared to agree. People, processes and physical evidence to be precise. What do you think?