Emirates Group

Known principally for its ownership of Emirates Airline, the group also runs the ground handling and travel agency Dnata in Dubai, and SriLankan Airlines. Emirates Group is 100% owned by the Dubai Government but operates as a fully autonomous and self-financing company.

Last year in the aftermath of the September 11th tragedy the airline announced a $15 billion aircraft acquisition programme that made the headlines all over the world. Before that fateful day Emirates was already signed up as the first confirmed customer for the A380 superjumbo Airbus. And by 2010 the airline plans to have a fleet of around 100 aircraft.

Forward planning is very precise at Emirates and there is nothing arbitrary about the group's aircraft acquisition programme. This closely mirrors the development plan laid out by the Dubai government and matches the anticipated growth of the emirate to the likely growth in passenger movements.

Remarkably group profits rose by 13.5% in the financial year 2001-2000, one of the worst years on record for the airline industry. This reflected a quick recovery in business after a fall off in October and November, and the continued strong expansion of the Dubai economy. Needless to say, Emirates avoided making even a single redundancy in the wake of September 11th, a unique achievement in international aviation.

Some commentators point to the high airfares of the Gulf region as the source of this profitability. True airfares are higher than in some markets. But that has not helped regional carriers such as Gulf Air whose losses have compounded in recent years.

The real reason behind Emirates success is its excellent management team, many of whom hail from British Airways and the strong backing of the Dubai government. However, as group chairman Sheikh Ahmed bin Saeed Al Maktoum likes to note, Emirates has never been back to the Dubai government for a penny to finance its operations since its launch in 1985.

In July 2001 Emirates issued its successful maiden bond on the Dubai Financial Market, raising $408 million. This is widely expected to be the start of a series of bond issues on the DFM to capitalize on the group's excellent standing in the business community and amongst local investors.

Privatization of the airline does not appear to be on the cards. Indeed, the success of the DFM bond issue underlines the fact that the airline can raise capital without any trouble and that selling its equity could be a very expensive alternative.

But it is for passenger service that Emirates has won its global recognition in the shape of awards by the bucket load. On some international routes from Dubai the national carrier of that country flies half empty, while Emirates is flying at capacity and charging higher rates. That only happens when an airline is offering more than a seat on a plane.