A New High Flyer

Once upon a time, when Maurice Flanagan was working at the airport in Nairobi, wet weather meant one thing: it was time to jump into his car and drive quickly up and down the clay runway. If his wheels got stuck, he would wave off any approaching airplane. He has come a long way. Now vice chairman and group president of Dubai-based Emirates Airlines, Flanagan is in charge of the globe's 14th largest and fifth-most-profitable airline. Under his watch, the once tiny, government-owned Emirates Airlines has been transformed, growing more than 20% a year for the past 17 years. It posted a record $429 million profit in the 2003-04 financial year--up 73.5% over the previous year. Its revenue reached an all-time high of $3.6 billion--up $1 billion, or 37%.

While most of the world's airlines have spent the past year slashing costs and trimming services, Emirates started eight new major routes in 2004 alone and now flies to 78 destinations in 55 countries. Last summer, Emirates began its first U.S. flights, to New York City's J.F.K. airport. The airline is already considering as many as nine U.S. destinations. "The U.S. is the final important piece," says Flanagan, whose airline also initiated flights to Lagos, Shanghai and Vienna last year. "Airlines are generally bad businesses. Emirates is different," says Damien Horth, an analyst at UBS in London. "It has been consistently profitable." Still dramatically expanding, it has more than $26 billion worth of new airplanes on order, including 45 of the massive, double-decker Airbus A380s.

Although many airlines are trying to become low-fare carriers, Emirates unabashedly is not. "Passengers' expectations on long-haul flights are different," says Dermot Mannion, an executive at the airline. "The low-fare model will not work on long flights. Passengers want good service, comfort and certainly some food." Emirates is betting instead on full service. The carrier has plenty of well-established rivals. Singapore Airlines, which flies to 94 destinations--among them the recently launched longest nonstop flight ever, from New York City to Singapore--has for years dominated customer-service rankings. Hong Kong--based Cathay Pacific is another carrier that receives rave reviews and competes around the world with Emirates.

One Emirates answer: new first-class interiors. First-class "seats" on its New York--to-Dubai route are fully enclosed suites whose seats turn into beds (with a massage feature), complete with vanity mirrors, 19-in. video screens with 150 selections and in-flight e-mail. There is a personal minibar (only juice, soda and water, but you can order alcohol from the flight attendants on your personal "room service" phone). And if that's not enough, the lighting changes to reflect the time of day, ending with a ceiling display of the Dubai night sky. The food is high quality as well, with ingredients from all over the world. The flight attendants are professional--and attractive. The airline keeps its cabin staff young as part of its youthful image. The price of a first-class seat from New York to Dubai: $8,999.