Sucess of Emirates airlines
Founded in 1985 by Maurice Flanagan a British businessman Maurice Flan agan was tasked with the ambitious mission to launch an airline in 5 months with $10 million seed funding. He was told that the airline had to “look good, be good, and make money”. With limited funding, Emirates started its first flight to Karachi and Mumbai by wet leasing. They borrowed flights from Pakistan International Airlines and within 6 months of establishment had its first flight. Wet leasing allowed Emirates to explore the most profitable routes and finally, in 1987 it started investing in its own fleet. Fuel expenditure, comprising an average of 22% of operating costs, can be a significant vulnerability for airlines. Geopolitical turbulence and other externalities can drastically inflate oil prices, jeopardizing airline profitability. Emirates, however, has proactively adopted fuel hedging, a financial strategy akin to pre-purchasing winter apparel during summer, mitigating the anxiety of sudden pri