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Led by a British expat and a visionary crown prince, Dubai's flag carrier has grown into one of the most successful -- and despised -- airlines in the world.

By Matthew Maier, September 21, 2005
Call it a moment of uncivil aviation. Last May in Tokyo, at the airline industry's biggest annual gathering, some 500 attendees watched as the keynote discussion, featuring five top CEOs, suddenly went from boring to ballistic. Rising from his seat in the front row, Leo van Wijk, vice chairman of the Air France-KLM Group, the world's largest airline, grabbed a mike and glared at his chief adversary, sitting onstage -- nattily dressed Tim Clark, British-born president of Emirates of Dubai, the world's fastest-growing intercontinental airline.
The subject of fair-trade practices had come up, and van Wijk wanted to know how Clark, running a carrier with just $5 billion in revenue, could be spending $15 billion on 45 new Airbus A380s, the largest and most expensive passenger jets in history. "Many of us have great doubts," van Wijk began, "about how Emirates is paying for these A380s when your cash flow isn't big enough to support it. So where do you get the money?"

The insinuation was obvious to everyone in the room: The source of funds might be hidden in the deep pockets of Clark's high-profile boss, Sheikh Mohammed bin Rashid al Maktoum, the multibillionaire crown prince of Dubai, which owns the airline. Or maybe in those of the crown prince's uncle, Sheikh Ahmed, who runs Dubai's Department of Civil Aviation, runs the airport, and serves as Emirates's chairman. Either way, van Wijk was suggesting that Emirates was getting preferential treatment.

With that, Clark launched into his own tirade -- pointing out that nearly every airline represented in the room had been on the receiving end of government subsidies and perks, and that Emirates's finances could easily support the long-term leasing of new planes. As president of Emirates, Clark was accustomed to occasional professional jealousy, but this was something else. Months later, sitting in his Dubai office on a typical 104-degree summer morning, he is still fuming. "It was a bloody ambush," he says.

The tension has been building for years. Emirates launched in 1985 with just two daily flights to Pakistan; the upstart carrier quickly became profitable and has since enjoyed 17 straight years in the black. According to the financial data that Emirates discloses, the $637 million profit it earned in its most recent fiscal year -- on record sales of $4.9 billion -- ranks it as the world's second most profitable passenger airline, behind Singapore Airlines. As the flag carrier for Dubai, the second-largest of the seven sheikhdoms that make up the United Arab Emirates, the airline has quietly become one of the world's most successful, earning it very few friends among the competition. "They perceive us as the largest single threat to their existence in the last 20 or 30 years," Clark says.

DUBAI: THE NEW GLOBAL HUB
More than half of the world's population lives within an eight-hour flight, allowing Emirates to connect Europe with fast-growing markets in Africa, Asia, and the Middle East.

EUROPE & THE AMERICAS
(France, Germany, Greece, Italy, Russia, U.K., U.S.)
22 DESTINATIONS
REVENUE: $1.8B
MIDDLE EAST
(Iran, Jordan, Kuwait, Lebanon, Oman, Saudi Arabia, Syria)
13 DESTINATIONS
REVENUE: $800.7M
AFRICA
(Kenya, Libya, Morocco, Nigeria, South Africa, Uganda)
11 DESTINATIONS
REVENUE: $458.2M
EAST ASIA & AUSTRALIA
(Australia, China, Indonesia, Japan, New Zealand, Sigapore, South Korea, Thailand)
17 DESTINATIONS
REVENUE: $1.4B
WEST ASIA & INDIA
(Bangladesh, India, Pakistan, Sri Lanka)
15 DESTINATIONS
REVENUE: $473.6M
Here's the biggest reason. Residing within 4,000 miles of Dubai -- roughly an eight-hour flight on today's modern jetliners -- are 3.5 billion people, more than half of the world's population. Before any other airline discovered the opportunity, Emirates capitalized on its location and created a hub to connect all these people. Much the way Chicago's O'Hare is a nexus for millions of travelers making their way across the United States, Dubai International Airport serves as the nerve center for a staggeringly fast-growing legion of globe-trotters. For two decades Emirates has grown sales at a clip of at least 20 percent a year, and it's doubled in size, on average, every four years. Construction has already begun on a new airport in Dubai that will be the world's largest when completed in 2020.

Which begins to explain why Clark, the affable Brit who helped build Emirates from a ragtag operation in the 1980s into a virtual empire, is the guy his competitors love to hate. Clark is busy scouting cities for all his new planes to fly into, and with a crown prince and a sheikh at his side, he terrifies van Wijk and others who have long dominated the world's busiest air routes. "The main reason we have so many detractors," Clark says, "is because they realize the game is up." GOes on search in Business 2.0 under Rise of the Emirates Empire