Emirates Wins with Big Planes and Low Costs - BusinessWeek

While the last five years have been grueling for much of the airline industry, Dubai-based Emirates has prospered, becoming one of the top three international carriers. Now, the 25-year-old government-owned airline is on the offensive. To bolster its all-widebody fleet, it's adding 90 Airbus A380 superjumbo jets with 45,000 seats and operating costs 12 percent lower than rival Boeing's (BA) latest 747. That huge fleet of double-decker widebodies poses a threat to big European carriers that, like Emirates, specialize in flying passengers long distances through giant transfer hubs, says British Airways CEO Willie Walsh.

Emirates' latest order for 32 A380s valued at $11 billion, announced in June, will give it 70 more superjumbos than any other airline. "It's a miracle that Emirates already has more intercontinental seats than Air France and British Airways combined," says Wolfgang Mayrhuber, CEO of Lufthansa. "It took us 40 years to get 30 747s in the air in one of the biggest global economies, so one must assume that this is an investment for the world."

Emirates ranked only 24th among international airlines as recently as 2000. Since then it's achieved a sixfold increase in traffic—defined as passengers carried multiplied by the distance flown. The Dubai carrier zoomed ahead last year to join Lufthansa and Air France-KLM Group as the biggest operators of international flights. "We always planned to grow, we were just never able to put our finger on how quickly," says Maurice Flanagan, founding CEO at Emirates and currently executive vice-chairman. "Now we're short of capacity all the time."