Emirates announced its 2011 results and it saw a 72% decline in profits.   Predictably the airline points to fuel costs. Its fuel bill rose over 44% over 2010. In addition the Arab Spring did the airline no favors.

But sit back and consider this performance. Twenty four years of profits. Tremendous fleet growth. Global coverage.  Even with the fuel shock and Arab Spring, Emirates made a profit.  If and when its regional competitors announce their numbers we will have a reasonable yardstick by which to measure the numbers.

But it is clear that having a young, fuel efficient, fleet has played well for Emirates.  It has been able to compete with the world's best airlines.  Many of those competitors will not reports 2011 profits.  For example, if Air India were allowed to die a dignified death, Emirates would clean up in India. Emirates is also a factor in the struggles at Qantas to achieve financial results. Emirates offers superb service levels and products and market rates. Because it is well run, the airline is able to offer deals to premium travelers who otherwise would not fly them.  Finally Emirates is opening new routes and drawing traffic away from traditional routes and carriers.

That's the upside. The downside is that Emirates is no longer a small airline easily ignored. It has a huge fleet of 777s and the world's most A380s.  Everywhere they go these days they run into ever stiffer  competition.  Some competitors are manifestly threatened by Emirates. These carriers will not go down without a fight. Probably we all need to readjust our profit expectations for Emirates. Competition is everywhere and this will curtail profits, but we expect the airline to keep on rolling, albeit a bit slower.