Emirates Airline was founded with only two aircrafts in 1985 by Dubai government. Twenty years later, the company’s empire has grown to have 83 aircrafts serving about 78 destinations within 55countries globally. Indeed, the company is rated to be among the airlines with the biggest cabin crew numbers from diverse nationalities. Besides becoming among the best budding airlines, Emirates is expected that soon it will rank in the fifth position as the most profitable airline across the world. The organization is highly committed in achieving their mission through employing various strategies that are customer-based like offering advanced services. Nevertheless, trends indicate that competition within the UAE airline industry has been rising at a high rate, requiring Emirates airline to be strategic in order to remain relevant and competitive within this market. This report, therefore, intends to critically assess the Emirates Airline Company, which is a Dubai-based airline in UAE providing different forms of airline services and under the ownership of the government. Emirates Airline is the biggest airline in Middle East running about 3400flights weekly from their Dubai International Airport hub to around 142cities within 78countries in 6continents. This report will involve the analysis of the company’s microenvironment using PESTEL analysis as well as a SWOT analysis to establish the company’s internal environment. Other factors to be included comprise of the competitor analysis, differentiation, positioning, target market and the company’s CSR activities.
In this section, Emirates will be assessed based on the microenvironment factors including the political, social, economic, legal and technological factors. The factors will be measured using a scale range of -5 representing less attractive to +5 representing most attractive factor.
The key factors that have been affecting the airline sector include terrorism and wars. The two factors, therefore, will affect Emirate’s business operations, considering that these factors have been dominant within the Middle East nations and other regions in the world. Terrorist activities have been evident in areas like Iraq, Palestine and USA, among others. Such activities make these areas unpleasant among businesspersons and tourists to travel. Terrorism therefore will be rated at -4 and wars at -3. Political total accumulated thus is -0.875.
Among the key factors affecting the success of any airline business relates to having highly stylish airports. This is particularly facilitated by the cutting-edge technologies employed in efforts to satisfy consumer needs. UAE is in the process of establishing such international airports within Dubai and Abu Dhabi in order to improve economic growth, increase tourists numbers and reduce oil revenues thereby boosting the airlines profits. The economic trend, thus, will be increasingly favorable to the Emirates Airline enabling their business to prosper. The stylish airports, therefore, are rated at +5. Economical total accumulated thus is 0.625.
Trends indicate that the world’s population has been rising at an alarming rate. Consequently, this leads to increases on social factors. For instance, it is notable that the UAE’s population has been expanding at a high rate, especially considering that UAE exists as a multicultural country. As a result, as the number of expatriates rise within UAE, profits generated by the Emirates Airline also rise. In this case, population growth can be ranked at +5 because it is increasingly favorable and attractive to the Airline’s business. Social total accumulated thus is 0.625.
Undoubtedly, the emergence of new technologies within an economy can have both positive and negative effects. For instance, the technology of teleconferencing facilitated the reduction of the need for face-to-face interactions in business meetings. In this case, new technologies can be rated at -5 in relation to Emirate’s business. This is primarily because such technologies have led to the decline in the number of business people traveling thereby reducing the business tickets purchase rates. Technological total accumulated thus is -0.625.
Emirates Airline is ranked among the most prestigious Airline companies within Asia as well as worldwide. The company was instituted in 1985 operating with two aircrafts that were leased from an elementary airport to provide airline services. The company has approximately 100destinations in about 60nations and has played a key role in making Dubai a commercial and aviation hub across Middle East. Presently, there are about 130airlines flying into Dubai and the largest number of passengers in this respect use Emirates Airlines. The Airline has a large and diversified cabin crew that hails from around 120nationalities, speaking 55different languages. Emirates Airlines runs as a subsidiary to Emirates Group and it is wholly owned by the Dubai’s government but operates on a commercial platform without protection or financial support.
The organization competes against other established aviation giants operating under the unconditional policy of ‘open skies’ provided by the Dubai government. However, the company has thrived in this market and their business has been profitable across all their years of operation, except in their second year. Emirates short and long-term goals involves to become the best Airline in all their ventures while also satisfying their clients’ expectations profitably to contribute to the success of Dubai’s economy while also making Dubai city the new aviation hub globally in the 21st century. Emirates has a mission to consistently provide Airline services that of high quality and that ensure value for money as well as being the best airline across all their routes of operation. Indeed, the company has a determination to accomplish its mission through positioning itself as a longstanding sustainable business that offers value to their clients, investors and employees. The three key goals of Emirates Airline include:
- Maximizing on their competencies in the market
- Emphasizing on the exploitation of their overall capital returns
- To become diverse thereby balancing their earning streams.
On the other hand, the company’s business objectives are as follows:
- Improve and retain consistent market share of the business class travelers
- Tap the market for low cost carriers to attain their investment returns
- Promote tourism activities within Dubai while also increasing the city’s popularity worldwide
Corporate Social Responsibility
In this section, the analysis will include the Emirate Airlines CSR evaluation based on the company’s legal, economic as well as philanthropic roles. According to Ismail (2009, p. 199), CSR involves the strategies employed by companies in conducting their business in a manner that is social friendly, ethical and valuable to communities on the basis of development. Ismail (2009, p. 207) added that CSR success is based on both external and internal factors. Internal factors relate to economic considerations, company culture and ethical influences while external factors comprise of technological influences, national culture and legal requirements.
From an economic perspective, Emirates Airlines operates to consistently maximize their profit margins while also building long-term value for their stakeholders using just few resources. The company is increasingly committed in ensuring high business profitability thereby demonstrating their firm economic commitment. The commitment towards their economic role aims to ensure all their stakeholders are effectively rewarded. Emirates Airlines operations also comply with the regulatory and legal requirements of Dubai and the world where the carrier operates. Such compliance has been deemed crucial because its absence can lead to interference with the Airline’s flights thereby affecting their business. The company, for instance, ensures compliance with the consumer protection laws, which ensures all customers’ information remains confidential without being revealed to a 3rd party without consumer’s approval. Ethically, Emirates Airline has been observed to adhere greatly to good corporate citizenship. The Airline commits to run their business in morally upright manner with no corporate misconduct.
Good ethical behaviors of this company are evident through their environmental protection practices. The Airline ensures their operations create the lowest level of pollution and waste. The company has made huge investments to purchase highly advanced aircrafts that are the most eco-efficient fleets globally. Emirates commitment towards the environment goes beyond their own interests in that they pride in their engagement in Desert Conservation Reserve of Dubai that is devoted in the preservation of cultural and natural heritage of the region. The company’s philanthropic obligations are observed through their unique workplace practices in terms of employee treatments. Emirates Company strongly believes that their staffs are their greatest asset and hence devote in protecting their interests. As a result, the company has been ranked among the best and biggest employer across UAE, especially considering their diversity policy that ensures an inclusive employment procedure plus great commitments towards employees’ welfare. Such practices are also in line with their compliance to Dubai’s labor laws linked to worker safety and health, discrimination and compensation, among many others.
In this part of the analysis, the paper will study Emirate Airline’s main target market while also evaluating their key competitors in the airline market. According to Czepiel and Kerin (2003, p.2), competitive marketing strategies of an organization should be considered strongest when the strengths of such a company are beyond the competitors’ weaknesses of when they pose threats on competitors. In competitor analysis, therefore, knowing and understanding the competitors’ weaknesses and strengths in determining a company’s competitiveness. Conducting a competitor analysis is considered essential because it facilitates the formulation of a company’s competitive strategy through considering the likely reactions and actions of competitors (Czepiel & Kerin 2003). In this regard, therefore, the three market giants that Emirate Airlines competes with in the airline market will be assessed including the Etihad Airways, Air Arabia and RAK Airways.
Emirate’s target market is divided into three market segments inclusive of the UAE’s tourists and business travelers, UAE expatriates and transit passengers.
Dubai has developed into a regional tourism and business hub over the years, thereby creating many opportunities for Emirates Airlines to grow due to the huge air passenger traffic. Dubai’s latest freehold ownership act has contributed greatly in attracting the business and tourist communities into the country. Additionally, the regional growth particularly GCC’s has now began stimulating the business and tourism sector thereby creating opportunities for further growth of local airlines. For this reason, Emirates should plan on how they can maximize on this economic boom in order to boost their passenger traffic.
UAE is considered the 5th biggest exporter of crude oil. For this reason, the rapid growth of Dubai city has increased demand for skilled and unskilled workers for their enlarging labor market. Since Dubai is rated as a high paying labor market, it has become a main attraction for diverse kind of workforce worldwide. In fact, the country’s overall expatriate population consists of 80% of their total population. As a result, the population diversity allows the Airline to plan their flight routes throughout the world. The company has made mutual agreements with nearly all national authorities worldwide to operate in. However, the Dubai’s open sky policy puts other carriers at liberty to compete with the Emirates.
Since Dubai serves as the operational center for the Emirates Airlines, this puts the airline at the best position for linking Asia/Australia and Europe thereby supporting the airline’s growth. The company has been capitalizing on this connection point in order to boost their business especially by serving transit passengers. The effectively developed and marketed broad range network allows the airline to flourish in this specific segment. Currently, Emirates Airline serves 87cities within 59countries globally and this level is still rising day after day. In addition, the Dubai airport authority sector has made huge investments to facilitate Dubai Airport expansion thereby attracting more and more visitors from all over the world.
The Airline has been experiencing fierce competition especially with the major national and international airlines sharing the market. Nevertheless, the key competitors indentified in this section consist of national airlines from other UAE states.
The Airline started their operations in 2003 as a company with only four members. Nonetheless, the company has now expanded to have a workforce of 2500staffs spread throughout the region. The Airline has secured great reputation as an UAE national airline in Abu Dhabi following the royal decree by the UAE president (Sheikh Khalifa), having an investment value of 500million (AED) with a huge clientele base. In 2007, for example, the airline secured approximately 4.7million passengers. In 2004 and 2005 consecutively, the Airline was voted as the leading New Airline worldwide.
The national airline was established through Sharjah ruler’s decree in 2003. The company’s basis is in Sharjah airport and they have a fast check-in facility and quick Dubai access. Air Arabia is cited the sole low-cost airline within UAE while also being the pioneer in low budget airlines within the MENA region (Middle East & Northern Africa) since 2004. The Airline formulated low fares on the basis of customized local preferences. In doing so, they stressed on their company mission through providing frequent and convenient online bookings plus less costly air charges but with safety standards and better services. Their business slogan, ‘Pay less. Fly more’ enables their clients to make smart choices for travelling while also attracting new customers and increasing the benefits of frequent travelers.
The Airline was founded in 2006 following the ‘Emiri Decree’ and it ranks in the 4th position among the national airlines in UAE. The company major aim was to provide economic development support including the economic free zones in order to attract business, leisure, tourism and residential projects. RAK operations are based on charter and scheduled services to increase demand across all markets served by the airline. The company ensures value for customers’ money in a cost-effective way.
Emirates Airline employs a differentiation strategy in order to gain a competitive advantage, which involves offering exceptionally quality airline services. The company uses this strategy to emerge the market leader while also creating a separation from their competitors. For instance, the company pioneered the provision of television screen across all their classes. The company also offered training courses using modern technology machines known as plane simulator. Such actions were aimed at keeping the airline at the top in the airline industry thereby increasing their market popularity both locally and globally resulting in increased demand and profits subsequently.
This part will be essential in identifying Emirate’s critical success factors in the airline market. In addition, the company’s value position will be assessed while the SWOT analysis will facilitate the determination of the firm’s strengths and weaknesses as well as opportunities and threats. Hung (2009, p.1) noted that in this increasingly competitive world, organizations must assess their business environments, both external and internal to determine their weaknesses and strengths while also maximizing on the existing opportunities and minimizing possible threats.
Independence is amongst the company’s greatest strengths in the airline market considering that they have managed to overcome acquisitions and mergers with other airlines. This has allowed the company to retain their flexibility abilities by making crucial decisions quickly when necessary without seeking consent from external partners. The airline similarly has a strong brand name that has enabled them to secure a good position and gain popularity locally and internationally. The company similarly has a strong clientele base considering the huge flow of customers and markets they serve. Further, the company has managed to retain this high customer base by integrating modern technology into their services, which ensures customers enjoy exceptional airline services in a convenient and satisfying manner.
Although the company has been aggressive in their diversification efforts, not all their actions have been successful in this respect. In fact, the company has been criticized for their extreme focus on high-end diversification despite the huge risks linked to such decisions. The company incurs huge operational costs due to their huge investments in implementing the recent technologies and in buying airplanes. Such investments can shake their financial base and strength, which can have subsequent negative effects on their profitability levels. Emirate Airlines also provides their airline services at higher costs in comparison to other traditional airlines. This can risk their efforts to enlarge their customer base because some travelers may prefer more customer-friendly fares.
The company’s physical location is among their greatest opportunities. Dubai and other neighboring countries have demonstrated speedy growing economies. Such growth increases the air travel demands, which Emirates Airline can maximize on, considering their strong air routes network and flexibility abilities (Shakir 2008).
The stiff competition is the greatest threat facing Emirates, having to operate amongst other established airline firms. With the increasing UAE traveler numbers, the competitors may fight against Emirates through reducing their ticket price. Emirates, therefore, has to keep devising new competitive strategies in order to curb this threat and remain relevant to the market. Similarly, the company operates in an increasingly volatile airline industry, which is liable to cyclical trade variations. This requires the company to be strategic and make better decisions to ensure their market survival.
This refers to a set of reasons why individuals or customers benefit from consuming something acquired from a company of in other words, generate value for customers. In all their operational years, Emirates has created a customer-oriented value proposition through providing a blend of services and products as well as experiences and information customized for their market demographics for every destination. The company also holds their geographical location (Dubai commercial hub) as a value proposition. Further, the airline offers an all-in-one communication tool that accommodates consumer communication needs while traveling while also offering time effective and competitive pricing routes in more than 100destinations. Their ‘Skywards Program’ enables the company develop strong consumer relationships. All such offerings have enabled the airline to deliver their value proposition to their clients while also supporting their mission statement in devoting to high standards of services.
The company’s CSFs are their key competences including differentiation business approach, strong brand name, alliances, and good relations with suppliers. Such competencies have served as key factors in sustaining their business achievement. The company differentiates their business by offering technology-based Airline services like the e-ticketing and wide seats. Their strong brand name has enabled the company secure develop a strong loyal customers’ base hence making their business highly competitive. The different alliances allow firms to share resources to develop huge customer bases, increase routes and expand services. Emirates good relationships with their suppliers has allowed the company establish long-term contracts thereby protecting the company in case of any changes in the market such as the pricing strategy.
This part will consist of Emirates positioning statement plus their target market’s perceptual maps.
The company’s positioning statement is based on their mission statement, which positions the brand as the best airline offering high quality value to customers for their money consistently across all their routes of operation. Emirate Airlines intend to secure more and more clients through using appropriate strategies that benefit the customers in terms of saving their money and time, application of their website and offering occasional discounts during various events, holidays or promotions. The airline has continued excelling in this respect, repeatedly winning awards of being the best airline, Even as consumers become increasingly demanding with each day, the company has continued marinating unique travel experiences for their customers thereby meeting their expectations satisfactorily. Emirate has received recognition for their in-flight entertainment product that it delivers to their customers thereby receiving the award of ‘Passenger’s Choice’ illustrating their success in satisfying consumers. The product consists of services like information, entertainment and ice-digital wide screen, which enables customers/travelers to follow their flight’s progress, receive various forms of news, experience the ground-breaking in-flight entertainments in terms of television, the recent movies as well as audio/video games from all over the world. The dining services are also excellent serving the business class, first class and the economy class with the best beverages and cuisines. Complimentary chauffeur driven vehicles are similarly available for the airline’s business and first class passengers in most of the cities served.
The perceptual map demonstrates the way consumers perceive a company’s brand in relation to their competitors. Customers perceive Emirates to be an expensive airline, with some even considering it a high-class airline that does not cater for the low-budget travelers. However, the travelers that have experienced services delivered by the airline have associated the brand as an airline that really considers the value for their money. This is because of their exceptional services advanced to travelers in terms of convenience, safety, quality, privacy and reliability, among many others (Wilfing 2012). The high fares charged by the airline have been facilitated by the high costs incurred in investing into such high-class services including the adoption of the modern technology in their service delivery.
The airline’s convenience perceptions are linked to their ability in offering most flights across major cities, with direct flights that save customers from taking connection flights from a destination to another. The company’s large numbers of aircrafts also ensure reliability of their flights among consumers, enabling the company to fly more than 80million passengers annually. The company is perceived to have excellent customer services considering their huge number of cabin crew from many different nations that spoil travelers with excellent services using diverse languages. First class passengers associate the airline with luxury, quality and high privacy level in their individual suites since they all have facilities that ensure this factor. In addition, the company is perceived to be a high-tech airline considering the high technology applications across all their operations from bookings, in-flight service delivery and entertainment/communication.
This marketing/business audit plan intended to assess Emirate Airline critically from diverse perspectives. The PESTEL analysis has facilitated the assessment of the company’s microenvironment while SWOT has helped in analyzing the internal environment. Inclusive in the analysis was also the firm’s target market, CSR efforts, positioning, customer perceptions and key competitors. The findings indicated that the airline is operating in an increasingly competitive environment where the company must keep devising new competitive strategies to allow their market survival and ensure their market relevance as well as profitability. The company also needs to maximize on their present physical location that allows exploitation of various markets in the region to increase their clientele base. Although the company has been cited a costly airline in perceptual mapping, their service delivery seemed satisfactory to the targeted group due to the exceptional services delivered, which also complements their value proposition. It is recommendable, therefore, for Emirate Airline to continue advancing their value proposition because it seems to deliver total consumer satisfaction in their target market while also retaining their market leadership. However, the company should commit in maximizing on growth opportunities developing in their market especially the growing of Dubai into a worldwide commercial hub.
Czepiel, J & Kerin, R 2003, Competitor Analysis, Strategic Management Journal, vol.24, no.1, pp. 1-23.
Hung, L 2009, Using SWOT analysis to understand the institutional environments, Strategic Management Journal, vol.1, no.1, pp.1-11.
Ismail, M 2009, Corporate social responsibility and its role in community development: an international perspective, The Journal of International Social Research, vol.2, no.9, pp. 199-209.
Shakir, H 2008, Economic success of Dubai as a hub is going to grow, Market Research Journal, vol.1, no.1, pp.1-7.
Wilfing, R 2012, Passenger decision making behavior and implications for airline marketing: case Emirates, Business Management Journal, vol.1, no.1, pp. 1-70.
|Emergence of new technologies
|Maximize profit margins o build long-term value for stakeholders and ensure high business profitability to reward stakeholders effectively
|Complies with legal/regulatory requirements in their markets of operations like consumer protection laws to ensure customers’ information remains confidential
|Environmental protection practices through minimal pollution and waste plus investing in eco-efficient aircrafts, participation in desert conservation reserve to preserve cultural/natural heritage
|Good workplace practices through good policies on employment procedures, safety/health, discrimination and compensation
-Strong brand name
-High flexibility in quick decision-making
-Strong customer base
-Adoption of new technologies
–Extreme focus on high-end diversification
-Huge operational costs
-High flight fares
-Highly volatile airline industry