Introduction and Background
Emirate airline was launched by a particular loyal family of Dubai, back in the year 1985. The Airline is one part of the Emirate Group, which is owned by the Dubai Government. The Emirate airline started its operations with the flights to locations such as Mumbai and Karachi, which were followed by travel to Delhi in September 1985. A single Boeing 737-300 and Airbus A300 were leased form the Pakistan International Airline (PIA), and most of the PIA employees were also hired at the same time by the Emirates. Accordingly, two Boeing 727-200 Advanced was acquired from the Royal Flight of UAE. Those aircraft were purposely applied until the Emirate started taking their delivery of a fleet of the newly advanced Airbus A300-600R as well as the Airbus A3100-300 wide-body aircraft.
According to the international Airport Association (IATA), it is indicated that back in 2006, Emirate Airline was ranked one of the best among the top ten best airlines in the world. On the 2005/2006 financial year, Emirates Airline carried approximately one million tonnes of cargo and 14.5 million passengers. It has been placed on the par with the Singapore Airlines since both the two of them do not have the lucrative domestic routes and all the flights and travels from Dubai, which is the headquarter of Emirates, are international flights. The head of Emirates, Maurine Flanagan, started the Emirates Airline back in the year 1985, with the two leased aircraft and some ex-workers from PIA. The Government of Dubai gave Flanagan about $1.8 million to cater for the start up cost.
Over the duration of the past thirty years, His Highness Sheikh Ahmed Bin Saeed Al Maktoum has been at the first place of the Dubai’s remarkable economic development and growth, spearheading the successful expansion of this aviation sector. More recently, he formulated economic, fiscal and investment policies as well as strategies toward the support of the Emirates overarching vision.
Emirates’ Vision and Values
“A stable and strong leadership team, ambitious yet calculated decision making and ground breaking ideas all contribute to the development of great companies.” In fact, these have played a significant role in the establishment and growth of Emirates Airlines, and it’s clear that business ethics, as well as customer focus, are the core foundations in which the overall success of the airlines have been developed. Strong brand awareness via sponsorship on games and sports, caring for their workers and stakeholders, and communities together with the environment served by Emirates Airlines, have also played a significant part since it was launched and will continue to signify success of its future (Nataraja, and Al-Aali, 2011).
Emirates Airline Mission
“We exist to deliver the world best in-flight experience.”
PART 1: Emirates Airline External Analysis
Competitive advantages, that are gained from the external changes, are typically triggered through the innovations. These innovations do not only establish the competitive advantages, but are also necessary for destroying rivals competitive advantages (CAPA., 2015). Emirate Airline was recently named one of the fastest growing airlines and of course, the 5th most profitable airline all over the world. In this section, I will cover the Macro-Environmental Analysis (PESTEL Model), Industry Analysis (The Porter’s Five Forces of Competition Model), and the Opportunities and Threats (Partial SWOT Analysis).
International Airlines that operate their flights all over the six continents are entirely exposed to the global political growths (Reuters UK, 2014). The developing global security considerations, as well as the recent terror attacks conducted in Europe and other other nations in the world, can significantly reduce the overall demand for air travel. The Emirate Airline run its flights to many of the emerging countries of the world such as Iraq, Africa, and South-East Asia regions. These areas have currently stable political and government environments. However, any legislative adjustment or disruption and security considerations in these areas might halt the demand for their flights (Dudley, 2016). According to the administration of Trump, the travel ban on particular Muslim country citizens is forecast to reduce the airline services of the Middle Eastern, which load factors on the most flights to the United States (The Washington Times, 2017).
The Emirates Airline is an international air travel service and the revenues are collected in the multiple currencies. Therefore, any sudden fluctuation in the rates of currency exchange and also, the changes in the world macro-economic conditions may result to the overall revenue fluctuation (Parasie, 2016). The United Arabs Emirates economy’s development and growth have been one of the top economy that is fueled by the oil industry of the nation. However, according to the recent research, the current investment in other sectors including commerce and trade, which attempt to make the United Arabs Emirate an attractive destination for most investors to start their businesses indirectly benefiting the Emirates Airline in the area (U.S Department of State. 2015). This is through the improved travel demands (Malek, 2016). Furthermore, the reducing costs of oil is also considered to be the positive development for the Emirates Airline. On the other hand, it also reduces the entire demand for the premium travel to some regions such as Dubai and the Gulf Region (Kamel, 2017).
The dramatic increase in the global population is a crucial factor when it comes to shaping the demand for air travel (Forbes, 2016). In fact, one of the most lucrative segment for travel is now the baby boomers, which has reached the top of the career ladders and of course, responsible for engaging in the regular business travels. However, an increasingly essential generation, Millennials, are coming up with an insatiable appetite and demand to air travel (Cederholm, 2014). Therefore, the Millennial travelers are accompanied by diverse expectations from the predecessor generations. The previous population had a high reliance on the preferences and advanced technology for convenience at the most affordable rate in the market (Cederholm, 2014). In this case, particularly in the emerging or developing regions of the world, the disposable income of the middle class is increasing, which is a factor that is responsible for attaching the valuable business potential, mainly for the Emirates Airlines to demonstrate the opportunities in those markets (IATA, 2014).
The overall application of the digital technology in air travel, with the primary aim of improving the performance, increase the efficiency of the journey, and of course, accurately predict the expectations of the customers in the most competitive Airline Industry is essential (Accenture, 2016). There is an increase in the demand from the client’s side to embrace the utilization of advanced technology, especially in personalizing and managing the itineraries, through the mobile apps. The market demand is high mainly if the Millennial travelers are considered as the factor that has the duty of carrying the entire opportunity for the Emirates Airlines to precisely personalize and customize their services to the existing customer’s preferences and needs (Accenture, 2016). The main advancements in the aviation technology that is affecting the fuel efficiency aren’t expected. However, the Emirates Airlines, as well as other aircraft, manufactures remain under a firm pressure toward the utilization of all the available technology, with the aim of reducing their overall fuel consumption (Phys.org, 2017).
The Airline Sector is responsible for about 12 percent of the total emission of carbon by the aircraft, in the transportation industry (ATAG, 2016). According to the research conducted by Upham, (2015), the increase in adverse weather conditions such as Hurricanes, snow storms, extremely high temperatures, among others might significantly affect the Emirates Airline operation. The company’s flight operations could be disrupted both in the middle east and in other nations of the world.
The phenomenal development of the Gulf carriers, which includes the Etihad, Emirates and Qatar Airways, periodically incentivized the American and European competing companies. The primary purposes of this is to make various attempts toward limiting the access to the Gulf Carriers, to their respective home markets. This is achieved through the protectionist policies and rules enacted and implemented, although few people on the involved airlines may openly admit that this accusations for the alleged subsidies as well as the lobbying to renegotiate Open Sky Agreements, together with the Gulf Airline services are done as part of the protectionism policies (Flottau, 2015). The Middle East traffic of airlines on America and Europe routes have significantly developed in the past few years, which is attributed by the agreements to liberalize the entire air travel markets (Parker, 2013). According to a research conducted by Reuters, (2017), the recent restrictions for travel that applies to the citizens from some selections of High-Risk Countries to the United States is supposed to address the security concerns. However, it is clear that this is one part of legal covert which the American and European Legacy airlines are applying to strictly restrict the Emirates Airline and other Middle Eastern Airlines to access their market.