Emirates, Facing Headwinds, Says Leader Will Retire Next Year

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Emirates Airline said its longtime chief plans to step down next year, an anticipated leadership change that comes amid a strategic rethink and at a time of headwinds in its key Middle East market.

An Emirates spokeswoman said President

Tim Clark

plans to retire at the end of June. He has led the Dubai-based airline—which is the world’s biggest based on international travelers—since 2003.

Mr. Clark joined the airline in 1985 when it was a tiny regional carrier, and helped turn it into a global powerhouse. Emirates spent heavily to build a large fleet of modern airliners that crisscross the world, using its hub in Dubai, part of the United Arab Emirates, as a stopping-off point for travelers flying between Asia and the West.

The airline helped pioneer a strategy of emphasizing luxury offerings, such as spacious first-class cabins, in-plane showers and lie-flat beds for long-haul flights. It also spent heavily to make even its economy-class cabin feel luxurious at a time when many other global airlines were cutting back.

Critics, including the U.S.’s biggest carriers, have long alleged it and a number of other Persian Gulf-based airlines benefited from unfair subsidies from their oil-rich government owners, a charge the Mideast carriers have denied.

Emirates has hit headwinds more recently. A big part of Mr. Clark’s long-term game plan was betting on big planes that would route passengers through a network of global hubs, like Dubai. As part of that plan, Emirates became the biggest customer by far of the Airbus A380 superjumbo jet.

But other carriers balked at that plane amid an industry shift toward smaller, more nimble aircraft.

Airbus

SE decided early this year to stop making the A380, forcing Emirates to review its fleet make up.

Meanwhile, Emirates’ home market in the Middle East has been hit by lower oil prices and regional tensions, curbing travel. While lower oil prices are generally good for airlines—including Emirates—they also tend to suppress the high-end business travel in the region that has helped boost Emirates’ profits.

Earlier this year, Emirates said it was scaling back some routes to focus on the most profitable ones. It also has started to follow some of its rivals, offering cheaper fares but charging for once-standard options like seat selection.

Emirates Chairman and Chief Executive Sheikh

Ahmed bin Saeed Al Maktoum

said last month that the company is “adapting our strategies to navigate the tough trading conditions and social-political uncertainty in many markets around the world.”

An Emirates spokeswoman confirmed an internal note Tuesday from Sheikh Ahmed announcing Mr. Clark’s retirement. The airline hasn’t named a replacement and said Mr. Clark, 70 years old, would stay on in the role until the end of June, after which he would remain an adviser.

Write to Benjamin Katz at [email protected]

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