Globalization is an important aspect of today’s world. Business and globalization are very much related to each other. Top level businesses in the various sectors are competing globally not locally. They are fulfilling the demand of people of various countries who have diversity in culture, religion, taste etc. Many MNCs become successful due to strategic management. During economic recessions airline industry faced problems like other industries. But in the recent years airline industry is doing better performance. Among other airlines in the airline industry the condition of Emirates Airline is excellent in terms of profit, passenger carried and so on. This study is to analyze the strategic management of Emirates Airlines and how it is operating globally.
The study mainly based on secondary data and different models like YIP Model, Porter five forces model, Value chain model etc have been used to analyze the strategic management of Emirates Airlines. It has been found that Emirates is one of the high class carriers among all airlines in the world. Creating value and achieving goals are important strategic principle in globalization. Emirates has a great potential to create added value through vertical integration in the value chain. Emirates bases its strategy on the fact that its planes can reach any point on the globe nonstop from Dubai and can connect any two city pairs with just one stop in the Middle East. Airbus and Boeing are the two main suppliers of emirates airlines.
The company continues to sustain and gain competitive advantages forwards, considering that strategic management take full advantages of their core competences, economies of scale. There is continuous growth in company’s operational and financial performance. (Appendix, Table-1)) Due to the geographical location this company is getting some special advantages. Threat of new entrants may decrease the profitability of emirates airlines. Fuel cost holds big portion (45% in 2012) of the total cost of emirates. Finally the study recommended that Emirates should control and decrease its cost through improvement and development of operation activities. It should improve its maintenance process, ensure effective and efficient flight schedule and better utilization of the company resources like aircrafts etc.
A fast growing multinational enterprise in aviation industry in the world is Emirates Airlines Company. It is one of the most reputable Airline companies in the Asian continent and also in the other countries of the world. Emirates Airline is owned by the Dubai’s Government. Dubai is one of the fast growing cities in the Middle Eastern region. (Butler & Keller, 2000) The company was established in 1985 with two leased aircraft from a rudimentary airport. Emirates vision is to build and maintain the market leadership that looks beyond conventional track. Emirates provide an extensive network of services within the Middle East as well as to Africa, East Asia, South Asia, Australia, North America, Europe and South America. It operates an exclusively wide-bodied aircraft fleet, composed of three aircraft families: the Airbus A 330/A 340, Airbus A 380 and the Boeing 777. The local competitors for Emirates are the Etihad, Air Arabian, Gulf Airways and global competitors are British Airways, Singapore Airlines and the like.
1.2) Aims and Objectives of the Study :
To know about the strategic management.
3 1.3) Methodology of the Report:
This report has been prepared based on the secondary data where data were collected from the following sources: Website of Emirates Airlines; Journals and Magazines;
This report has been completed through applying the following models: YIP Model;
Porter Five Forces Model;
Value Chain Model;
Supply Chain Model.
4 1.4) Literature Review:
Al Balushi (April 3, 2011) ‘Management, great team of labor, marketing and innovations are the main factor of Emirates Airline success. Emirates has a unique way of decision making. The key to Emirates success has been the continuity of its management team. At the helm of the company there is a group of talented executives with proven track record in their field of expertise. Emirates has a strong marketing strategy which has created brand awareness worldwide. Nathan Zielke, a transportation specialist “Emirates’ overall costs, including those for labor, are 30 percent lower than those of its competitive rivals.” Emirates has undeniable advantages over competitors, including lower labor costs. While Emirates pays its pilots international wages, it hires inexpensive workers usually from the Indian subcontinent, for tasks like handling baggage or working in catering services. John Strickland (Director of aviation consultancy JLS Consulting) “Emirates was hit like all airlines by fuel price rise, but very good growth in passengers and revenue is still being achieved despite tough market conditions in a number of areas.” Fuel price is almost 45% of Emirates total cost (Financial Report 2012).
Despite this Emirates growth rate is high enough. Excellent geographic location enables the company to grow further. In the financial year 2011-2012, Emirates generated revenues of around AED 62 billion, which represented an increase of approximately 15% over the previous year’s revenue. Passenger numbers also increased from over 31 million to around 34 million representing an increase of 8%. Shahank Nigam (Chief executive of SimpliFlying) “Delivering a level of cabin service and high product quality gives Emirates a sustainable competitive advantage.” Emirates Airline introduces high quality first class lounges to attract business travelers. It was also the first airline to offer passengers a facility to use their mobile phones. ICE (Information, Communication, Entertainment) system of Emirates also very popular. Tim Clark (Emirates Airlines president) viewed that “Emirates has always been a firm believer in aviation liberalization.” The UAE has open sky agreements with many countries around the world and has always advocated the incredible benefits that these types of agreements bring to local economies. They stimulate economic development and drive growth-key to any market’s future
5 Chapter-2 (Findings & Analysis) 2.1)YIP Model of Emirates Airlines:
1.Similar customer needs 2.Global customer
1.Scale of Economies
3. Difference in country cost.
Cost Drivers International Strategies
1. Trade policies
1. Interdependences between
countries Competitive Drivers 2. Competitor’s global strategies.
(G.Yip’s Total Global Strategy) 6
Market Globalization Driver:
Market globalization drivers- common customer needs, global customers, global channel and transferable marketing depend on the nature of customer behavior and structure of channels of distribution. In case of airline industry though major needs of customers are common but some variations according to the different continents. Emirates Airlines focuses on fundamental needs common to all countries. For example, on all routes emirates airline offer passengers the choice of two Indian and one Western dish in all classes. The Airline industry has a very unique type of global customer. Most travelers except the most patriotic consider all carriers that serve the route to be traveled and select on the basis of reliability, quality and other real and perceived attributes. Cost Globalization Driver:
Cost globalization drivers- global scale of economies, favorable logistics ,differences in country costs and fast growing technology depend on the economics of the business. Low fares can help Emirates to achieve economies of scale. Due to the rise of fuel Cost Company’s total cost is increasing to provide services in the different route. Government Globalization Driver:
Government globalization drivers- favorable trade policies, compatible technical standards, common marketing regulations and host government concerns-depend on the rules set by the national governments. Most Govt.have strict regulations on foreign carriers to operate in certain routes in their home countries to protect the national airline. Deregulation in aviation industry has boosted airlines to develop for open route entry, exit of air carriers, competitive fares; service frequency Moreover, liberalization in the airline industry is increasing. Latest technology is a success driver in the airline industry. Engineering has a tremendous responsibility at Emirates. They keep aircraft flying safely, providing maintenance, technical services and quality assurance to the entire Emirates fleet. Competitive Globalization Drivers:
Competitive globalization drivers- competitors from different continents, interdependence of countries and globalized competitors raise the globalization potential of airline industry. Emirates and the EU are major contributors to each other’s economic and business strength. For example, Emirates Airlines is the biggest purchaser of the Airbus A 380 and one of the largest customers of the A 350 aircraft. Beyond passenger transport, Emirates’ sky cargo division also plays an important role in facilitating Europe’s trade with the wider world. Emirates main competitors like British Airways, virgine Atlantic, Singapore Airlines are adopting various strategies to increase their passenger and revenue.
7 2.2) Porter Five Forces Model:
Emirates Airlines- Porter’s Five Forces Analysis:
1) Threats of New Entrants:
New company can easily enter into a market if barriers to entry are few and vice -versa. Generally threat of entry high in the airline industry because of existing loyalty of customers to major airline such as British Airways, Emirates Virgin (Tanvir, 2010) .One of the most and prime important entry barriers is finance. But it is available in the Middle East and in addition to this technology and expertise can be purchased. So the threat of new entrants may decrease Profitability of Emirates Airlines. 2) Power of Suppliers:
Boeing and Airbus are two dominant aircraft producers for the world’s airlines. They are highly competitive. Emirates depends so much on these suppliers as required products are differentiated. That’s why Emirates has to face the threat of paying higher prices or even delivery delays. 3) Power of Buyers:
Buyers can change the industry trend due to their demands for high quality, demand for low prices. Emirates may face a threat now and in future as customers now days have an ability to make demands on their products in terms of lower prices, higher service or product quality. 4)Threat of Substitute product or services:
Most airlines companies offer products which have similar features like good quality ,low price and excellent service. Other direct substitute products to Emirates are Qantas, Singapore Airlines, Cathay pacific etc. So Emirates Airlines may face challenges when most players become competitive to launch new products globally. 5) Competitive Rivalry:
The airline industry is generally highly competitive. The trend of rivalry in airline industry is famous and high due to availability of large numbers of airlines in the market which are also offering best services, best cost etc. Emirates Airlines has some local competitors like Etihad, Air Arabian etc. and global competitors are British Airways, Singapore Airlines, and German Airways Lufthansa etc. That’s why Emirates is facing cutthroat competition in the market. 8 2.3) PESTLE Analysis of Emirates Airlines:
The political scene in the region has been quite favourable because most of the countries in the Asian pacific have been making agreements that facilitate better trade between countries especially in relation to the aviation sector. These countries have signed agreements between themselves and also with other countries in the United States and also in the European continent. These agreements have opened up Emirates to the world and have provided readymade markets for the Airline Company. But the recent tensions in Egypt, Yemen have hurt Emirates. Due to political instability many tourists postponed holiday plans.
Naturally the economy of United Arab Emirates (UAE) is rich because they have most valuable resource- oil. Besides oil for some other reasons the economic condition of United Arab Emirates (UAE) has been developing very fast. As a consequence of this economic growth Emirates Airline has been growing dramatically over the past few years. In the region markets are changing rapidly and more Govt.have reformed their economic policies so as to suite the airline industry. (Tayeh, 2006). Moreover Dubai represents a lot of potential for investment both in the tourism industry and also in the business world. People from various countries gather in this city to make investment in various sectors. Business projects like real estate which attracts a lot of capital investment. Another important feature is that Emirates Airline is located in a very suitable region in Asia; it is in the middle of the Eastern and western region. So the airline is getting benefit from both of the two continents. 3)Social:
In the United Arab Emirates (UAE) people from different developing and underdeveloped countries come to get employment. These workers rarely demand for high compensation. While Emirates pays its pilots international wages, it hires inexpensive workers usually from the Indian Subcontinent, for tasks like handling baggage or working in catering services. But now labour issues are adversely affecting employers in this region and also in the rest of the world. Workers are becoming aware of their potential and most of them are demanding more. These workers all belong to different worker’s unions and all of them may require special attention by the human resource department. Emirates Airlines has also been affected by this problem but not to a large extent.
Due to the technological change people are becoming more knowledgeable and conscious about different companies and their services. They can get information regarding all the strengths and weaknesses about a given company using the internet. Normally airline clients prefer the airline companies that have direct routes to airline companies having numerous stopovers. Emirates Airlines has been affected by the rapid change in technology as the company needs to find out that it offers better services to its clients as well as it can meet future demand. (Tayeh, 2006) 5)Legal:
Earlier Govt. Within the Asia Pacific felt that they had to protect airlines against external factors, but after the recent policy changes, airline industries have now been opened up to competition. For this reason Emirates Airlines have grown fast. Though it is a govt. owned company but it does not face problem for govt. Ownership rather it is getting freedom and managerial flexibility. To sustain competitive advantage it can now follow its business strategy instead of worrying about government interference. It indicates that Emirates Airlines face less legal difficulties when running operation in the region. 6)Environmental:
The environment has been degraded by global warming and climate change. Airline industry has been considered a factor to a faster growing source of greenhouse gas emissions. To sustain in the global market Airline companies are trying to adopt strategies that provide them with a good corporate image. For instance, some airlines decide to take part in environmental sustainability projects such as tree plantation .The issue of recycling is also taking up a lot of preference in the Airline industry. Most environmental campaigns in the Airline industry are part of the corporate responsibility strategy within a specific Airline company. Emirates Airlines claims to have lower emissions than other airlines due to its fleet which has an average fuel burn of less than four litres for every 100 passenger kilometres it flies. One central pillar of Emirate’s corporate responsibility initiatives is its environmental sustainability program, which focuses on fuel efficiency.
10 2.4) SWOT Analysis of Emirates Airlines:
Changing Dubai city provides unique opportunity for unlimited expansion of the airline industry. The prospect for passenger, cargo and travel and hospitality industries are ever increasing. Liberalization:
Economic liberalization is taking place in UAE is much quicker in recent years. Dubai started the trend by opening up the real estate sector. The growth in any part of the region is obviously a growth opportunity for an airline business. Tourism Development:
Development of UAE as a tourist destination is creating new business opportunities. Abu Dhabi, the capital city is expanding fast. So this opens up new opportunities for the cooperation and expansion. Since Dubai International Airport does not have any night flying restrictions Emirates Airlines achieve a higher utilization of its aircraft than competitors It has fewer legacy cost than longer established rivals and it helps that all forms of strikes are banned in the United Arab Emirates.
People are now more price conscious because of poor economic situation. People are gradually shifting from standard airlines to budget airlines. Jazeera Airways, Sarjah based Arabian Airlines, for example, charge less than half of Emirates’ rate. Domestic Competition:
Increasing competition in the domestic market threatens the business base of Emirates Airlines. Abu Dhabi based Etihad airline is expanding rapidly. Rising Fuel Cost:
Fuel cost is 45% of total costs and came to $ 1.7 billion in the year ending 31 March 2012. So it can be said that fuel cost is a big portion of total cost and rising fuel cost is a threat for the company. 12 Internal Analysis
Dubai is the ideal linking point between Asia, Europe and Africa. So this city gives exclusive advantages to Emirates Airlines in terms of ever increasing demand for passenger and cargo service. Management Style:
This company has a unique way of decision making. It established its market while most of the airlines reduced their gulf operations. This unique approach to decision making is the key strength of the Emirates Airlines. Brand Reputation:
Emirates Airline provides quality service even in the economy class. The strict standards of passenger comfort, entertainment and flight schedules are unsurpassed in the industry. Thus Emirates airlines have generated a strong brand reputation in the world. Diversification:
Diversification is an integral part of the growth of the Emirates airlines. It has added cargo service as the first stage of the development. Hospitality and tour operations have been integrated effectively to the Emirates business. Profitability & Resource Strength:
Emirates Airlines consistently achieved 20% growth rate from the first year of its operation. It has maintained its growth rate while the airline industry all over the world faced serious challenges and negative growth. Strong Corporate Culture:
It is another strength of Emirates Airlines Which Facilitates it to continuously improve and renew services in the airline. Government Ownership:
Generally Government ownership is considered a limitation in most of the cases due to excessive bureaucratic control. But in case of Emirates Airlines, ownership by Dubai Government comes with freedom and managerial flexibility. 13
Emirates is the largest customer of Airbus A 380. The cash flow position and poor business in recent year can further aggravate the financial stress on the airline. So Emirates has to utilize additional fleet strength. Unsuccessful Approach
Not all of diversification and approach have been successful. Focusing too much on their high-end acquisition and diversifications.
2.5) Resources of Emirates Airlines
2.5.1) Core Resources:
Airbus A 380 which is much suitable compared to other aircraft.(Tanvir,2010)
2.5.2) Threshold Resources:
2.6) Competences Of Emirates Airlines:
No frill strategy and
Route policy strategy.
2.6.2) Threshold Competences
Online booking ;
Operation of on time delivery and point to point routing.
16 2.7) Value Chain Model:
Value chain Analysis:
Inbound Operation Outbound Marketing Services Logistics Logistics & Sales Inbound Logistics: Emirates has expert engineers, flight deck crew, cabin crew, airline maintenance personnel, air traffic controllers etc.It has sufficient airlines & pilots. So it can maintain the flight time properly. Operations: Emirates Airline is giving quality services by operating a wide variety of air line types. Dubai International Airport has exclusive Emirates Terminal 3.This gives its customers an advantage as they can easily choose which airline to fly with. Emirates Airline operates a mixed fleet of air bus and Boeing wide body aircraft and is one of the few airlines to operate an all-wide-body aircraft fleet. Emirates Airline provides long haul flight services at apparently cheaper rates. Emirates Airline intends to expand its long haul flight services into newer territories. Out bound Logistics: Emirates Airline collects its aircraft and other necessary equipments in shortest possible time. It gives emergency customer service.
Emirates Airline maintains transaction management by reporting, EDI, reconciliation, audit. It picks the customer timely and maintains the flight schedule. Marketing & sales: Emirates Airline adopts vertical integration into its core business structure. This resembles itself through manufacturing, marketing and technology Emirates Airline has diversified its investment portfolio into areas of airport services as well as infrastructure development within its operational routes. Day by day it is increasing its services by understanding the customers’ needs. It maintains account management system. Services: There are 3 types of first class seating; the full suite with doors, flat bed ‘Sky cruiser’ seat (without doors) and ‘Sleeper’ seats. Emirates Airline directly operates check- in services, service desks, boarding and lounge services, baggage and handling and airport push- backs. In addition, Emirates hotels & resorts, 17
Emirates sky cargo, Emirates aviation college for pilot and staff training, Emirates engineering centre for repair, maintenance and training, Emirates catering, incorporate business support are its special services. These activities make up smooth operations for the airline’s success. Emirates became the first airline in the world to introduce a personal entertainment system on a commercial aircraft after introducing the world’s first seat-back screens in 1992. All three classes feature a personal in-flight entertainment (IFE) system on Emirates aircraft. Self-service kiosks are also available.
2.8) Supply chain Model Of Emirates Airlines:
Goals of Emirates supply chain the supply chain
Emirates Airline’s supply chain is made up of travel agencies, partners and business strategic managers. The airline has been able to derive great benefits from its supply chain namely; Increased flow of passengers booking for flights as well as cargo making Emirates Airline to be more profitable in the process Developing strategies that are necessary for the Emirates Airline to overcome certain economic and political challenges that are prone to affect its operations. Increased awareness of the benefits of the long haul flights
Customers of a supply chain:
Emirates has divided into related industries and sectors, including airport services, engineering, hospitality services, catering, and tour operator operations. Emirates has seven subsidiaries and its parent company has more than 50.Emirates has stated that its versions of the A380-800 will offer fuel economy of 3.1 liters per 100 passenger km. Emirates A380-800s also feature the Engine Alliance GP7200 engines, which save 500,000 liters of fuel per aircraft per year. The company uses a program called “Flextracks”. The technology is used to plan and optimize routes efficiency and load factor. Emirates has invested in a program called “tailored arrivals”. This allows air traffic control to uplink to aircraft en route. It first determines the speed and flight profile from the air onto the runway, this allows the crew to accept and fly a continuous descent profile, saving fuel and emissions. The cohesiveness of dnata’s internal platform (one dnata) continues to bring the company and its recent acquisitions together under a consistent global banner. External customers:
Though fuel price may be higher in the upcoming period, Emirate will take delivery of more than 20 aircraft in 2013-2014. They don’t follow any conventional bank loans to buy these aircraft rater they issue bonds. This bond has different investment strategy that reflects diversified approach to financing. Investors around the world know the Emirates brand. Emirates is chosen for their solid credit history, transparency, and ample cash reserves. In early 2013, they issued 2 more bonds that helped deepen their investor base throughout Europe and the Middle East. It is a kind of innovative thinking that keeps their fleet growing. Emirates operates an exclusively wide-bodied aircraft fleet, composed of three aircraft families: the Airbus A330/A340, Airbus A380 and the Boeing 777. The fleet consists of 191 aircraft as of June 2013[update] (202 if its cargo division is included), with a further 188 aircraft on order. In keeping with its policy of maintaining a young fleet, which stood at an average of 6.7 years as of December 2011, it renews its fleet frequently. The airline also ranks as the largest in the world by international seating capacity, according to the latest annual report by IATA.Emirates aims to operate over 120 Airbus A380s when new airport space is available. The target implies a future Emirates order for 30 of the world’s largest airliner, at an unspecified date.
Emirates Airline ensures that its staffs are trained regularly so as to deliver exceptional service to their passengers and corporate customers. Training of staff is part of the airline’s corporate strategy. The airline giant wishes to train its staff in their specific areas of work so that the
staff efficiency improves. The airline acknowledges the fact that recruiting new staff is costly to its operations financially as well as time-wise. Employee training is also at the core of the airline’s priority list. This has enabled Emirates Airline to be able to deliver excellent customer service to the passengers. The training programs which are regularly carried out have successfully enabled Emirates Airline to maintain a good corporate image.
The Asian Pacific, where Emirates Airline operates is characterized by numerous employees and workers. As a result of this, the company has been able to reduce its overall fixed expenses and increase its profits & improve its quality. This kind of social environment gives Emirates Airline a competitive advantage thus the airline is able to float more competitive air fares in the market. The highly creative managers also help to design and develop competitive products that often compete effectively with that of the competitors.Recruiters of emirate travel all over the world to find the right people. External Customers:
The fast growth of economies around the Asian Pacific region is indeed an opportunity for Emirates Airline to explore and realize a growth in the number of passengers. The firm should therefore develop competitive marketing strategies to be able to tap into the growing passenger base The price wars concerning air fares have ended up benefiting passengers as airline companies become more and more formidable towards reducing airfares. Emirates Airline has an effective pricing strategy that ensures that passengers pay relatively cheap air fares while enjoying their flights. This has been the main competitive advantage that the airline company has enjoyed over the years. This has given the passengers a cost effective advantage and thus the reason why they prefer flying with Emirates Airline. Moreover, the long haul flights have been low cost and profitable to the company. Frequency of long haul flights has made Emirates Airline to become more profitable thus the airline has not seen the need to increase its air fares.
2.9) Stakeholder Analysis:
The primary focus for Emirates and its employees is to deliver superior customer service. In turn, Emirates provides its employees with benefits such as: Comprehensive health plans and paid maternity and sick leave. Profit share scheme based on the company’s performance and results which has ranged from between 2 and 14 weeks of basic salary. All eligible staff can avail concessional airline rebated tickets for self and family. The cash element :
For a Captain includes a monthly salary of Dh41,240 (basic salary plus hourly flying pay based on 85 block hours per month), For the First Officer is estimated to take a monthly salary of Dh29,145 (basic salary plus hourly flying pay based on 85 block hours per month).
Pilots are paid an hourly flying pay on block hours, up to a threshold of 83 to 92 hours. The non-cash elements of the package include annual leaves aggregating 42 calendar days, annual leave tickets, insurance, etc and some additional privileges as well
Fifty per cent of the basic salary of the pilots is protected against adverse exchange rate fluctuations between the UAE dirham and the currency of home country Emirate provides accommodation costs for employees and children’s education for management, pilots, engineers and other staff. GOVERNMENT
Emirates are 100% owned by the Government of Dubai through its commercial investment arm, Investment Corporation of Dubai (ICD). Each year the Government has received at least $100m in dividends.[In 2010, the Government has received Dhs7.1 billion from Emirates since dividends started being paid in 1999 for having provided an initial start-up capital of US$10 million and an additional investment of about US$80 million at the time of the airline’s inception.
The airline paid a dividend of :
US$260million in 2010,
US $793million in 2009
US$776 million in 2008
The competitors of Emirates Airline within the airline industry have been able to effectively reduce their air fares, thus attracting a large number of passengers in the Asian Pacific region .The price wars concerning air fares have ended up benefiting passengers as airline companies become more and more formidable towards reducing airfares. The healthy competition that Emirates Airline has encouraged has given rise to better service provision. Most of the competitors have been in the market for long. This means that they have mastered the art of profitability and reduced expenses within the airline markets. Although the competitors have not been able to merge above Emirates Airline, they have commanded a sizeable proportion of the airline market share in the Asian Pacific ENVIRONMENT
Emirates Airline supports environmental initiatives towards a sustainable future environment. The company has recently participated in tree planting initiatives as well as sponsored environmental conferences. This has given the company a front towards improving its corporate image. The efficiency engines installed in every aircraft operated by Emirates Airline ensures that less carbon is emitted to the environment, making its flights environmental friendly.
Customer satisfaction in the airline industry entails ensuring that customers get the services they expect from the company based on the amounts they pay for the presumed services. It also entails ensuring that the customers reach their destinations through the shortest route possible, within the shortest time yet not spending a lot of cash for the same service. Emirates Airline has an effective pricing strategy that ensures that passengers pay relatively cheap air fares while enjoying their flights. This has given the passengers a cost effective advantage and thus the reason why they prefer flying with Emirates Airline. Emirates Airline has incorporated the latest technology in booking flights which has enabled the customers to be served better. Customer satisfaction has risen due to the incorporation of the online booking and increased communication with the customers prior to taking up their flights.
Many customers have been able to move from other carriers such as Singapore Airlines to the renowned Emirates Airline. Emirates Airline has a wide variety of airline types that it operates. This gives its customers an advantage as they can easily choose which airline to fly with. In the recent past, there has been no accident reported involving the Emirates Airline. This safety flight records restore the passenger confidence thus enabling the passengers to prefer to fly with Emirates Airline at all times. Emirates ICE system (Information, Communication, Entertainment)which includes movies, music, and video games It offers over 1200 channels of pre-selected entertainment (up from 600) available to all passengers.
Emirates Airlines is facing problem due to budget airlines. Some airlines like Etihad, Air Arabian are providing services at low price. Their services are not like Emirates quality services. Emirates can not also compete at this level. Passengers are moving toward budget airlines due to economic crisis. High fuel cost is also another problem for Emirates Airlines because they cannot manipulate the fuel price. Operational cost is very high due to huge investment on technologies, aircraft and best quality services.
3.2 Conclusions & Recommendations:
Emirates can solve the budget airlines problem through expansion and diversification. By combining hotel tourism package with hospitality business Emirates can attract large number of passengers. Emirates should control its cost through improvement and development of operations activities. Emirates should improve maintenance process, effective and efficient flight schedule of the company and better utilization of the company resources like aircrafts etc. Security, which is the greatest concern of most stakeholders, should be addressed by taking into account the current and future technological changes, weather and climate pattern, culture of people and other relevant factors that affect security conditions of the Emirates Airline.
Emirates airline is a successful growing airline with the potential to become even bigger. The company believes that free market solutions are the best driver for any Airline company and this why the company has stayed away from merger and acquisitions. Emirates is getting most advantages from its geographical location which other global competitors don’t have. So it can be said that through management and offering services to various stakeholders Emirates can retain its competitive advantage.
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