Emirates airlines is the national airline of Dubai and is based at Dubai International Airport. Gulf Air stopped flying so frequently to Dubai and so the government launched its own airline, called Emirates. It was given seed capital by the Royal Family, but then has to be self-sustainable, which it achieved. It has actually been profitable since it launched.
Although offering economy seats like all other airlines, Emirates has positioned itself as a luxury airline and, to some extend, has maintained that expectation very well. It mainly operates larger planes and has won numerous airline awards, including being voted the fifth best airline in the world in 2009. In terms of passenger numbers it is the 4th largest airline in the world, and Emirates operate one of the longest non-stop flights (from Dubai to Los Angeles).
Emirates have worked hard to develop relationships with other airlines to extend its reach and this has made it possible for the airline to fly to, amongst other places, the USA, South East Asia and Australia.
Despite its success many airlines have reported that they are very concerned about the airline taking business away from them. Firstly by using Dubai as a stop-over to various destinations and secondly as they feel that the airline gets preferential treatment and fees from the Dubai Airport Authority (as they are both owed by the government) as well as preferential loan agreements making their repayments much more manageable. However, from a passenger point of view this is all very good news. It will lead to increased competitive pricing, better service delivery, and possibly addition flight configurations being put together.