Emirates Airline Essay
Emirates airline has been in operation since 1985, when it started operations with only two aircrafts. It is owned by the government of Dubai and operates from many international airports. Emirates today has grown from the two aircrafts to incorporate the following businesses; an international cargo division, a destination and leisure division, a ground handler and an IT developer (Emirates, 2010).
The airline has the following goals and objectives; the first is to position Emirates airline as a global carrier and airline of choice; the promotion of Dubai as the most modern, safe and technologically progressive center has given Emirates a big market; create a leadership position in the aviation industry by focusing on the senior management; show the airlines services, fleet, safety record and reputation. The airline operates a fleet of both Boeings and airbuses and in total the airline has 137 aircrafts.
It flies hundreds of flights every week to various destinations covering 60 countries globally with over 700 flights from Dubai to the various destinations worldwide. This gives emirates an average of 2200 passengers per week. Apart from these flights emirates have four non-stop long distant flights to the cities of Houston, San Francisco, Los Angeles and Sao Paulo.
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The airline is seeing a tremendous growth in the recent years, with estimates of a 25% increase in both cargo and passenger numbers. According to (Tamara, 2010) the industry will have a double digit growth in the year 2010-2011. The growth both in passenger and cargo has led to the purchase of more aircrafts, they are purchasing seven A380s and a Boeing 777 in the fiscal year 2010-2011, and this was reported by the CEO Sheikh Ahmed to (Tamara, 2010). Currently Emirates is the largest consumer of the A380 airbus supper jumbo, with major expansion plans in carrier planes to cater for their growing market.
Legislation Emirates airlines is a global airline in six continents and 60 countries, as a multinational company it needs to satisfy the legislative conditions in the respective countries. Emirates have subsidiaries, regional offices and representative offices internationally that are responsible for its businesses (Jesmond, 1). Emirates have found a multinational solution that uses both the global integration and local responsiveness to meet its global consumer needs.
For it to be allowed to operate in any local market, they need to fulfill any laws and regulations in the host countries, at the same time they need to consider the culture, markets and practices in these countries. These local responses comprise of the government regulations, business culture, market demand and competition. According to (Jesmond, 1) report emirates airlines need to fulfill the national environmental factors, industrial and organizational factors in their host countries.
These government policies that are required by the host country are the economic freedom, workplace policies, and local legislation and product and services regulations (Jesmond, 1). At the same time they need to meet the international airline conditions as stipulated by the FAA and the local airline air travel associations that they satisfy air travel safety (Jesmond, 1). Seasonality Emirates airlines can comfortable enjoy business through out the year, as there is a huge traffic of people in and out of the UAE.
This is due to the fact that UAE has lifted most business regulations and operates a trade free zone; this creates a convergence of business people in and out of the country. With a wide range of customers ranging from executives, business people, tourists and family. Emirate principle is the provision of quality, by providing a god product with a unique brand and network. They invest heavily in their aircrafts and provide quality services to travelers. They have increased their network by expanding into regions and at the same time they pull out of unprofitable regions.
According to (Jesmond, 1) there are factors that influence consumer demands these are differences in culture, national attitudes and economic conditions. Corporate Social Responsibility The company has a corporate social responsibility and firmly believes the employee is an important aspect of the industry as they assist in the development of the airline (Emirates, 2010). They give their employees a wide range of benefits, including a profit share scheme, and they have developed programmes to help the employees develop their careers.
According to (Emirates, 2010) they have invested in the newest aircrafts they have been able to become one of the most eco efficient airlines in the world. They partake in environmental conservation as they are involved in the rehabilitation of the Dubai desert and other environmental conservation projects abroad like the cap ternary resort in Seychelles. Existing Business Emirates has a variety of products and services, they have emirates airline and Dnata that offer air travel and ground handling support.
Dnata does all the ground handling business in Dubai giving the biggest airport services. The Emirates handles both passenger flights and cargo services through the emirates skycargo. They also provide catering services, freight forwarding and logistics, tour operations and travel and a wide variety of travel packages around the world. These travel packages include the holiday lounge, luxury air travel, emirates tours, Dnata travel services, Dnata offshore and marine services and many more (Emirates, 2010).
Emirates airlines provide their consumers with consistent service, this they achieve by offering their customers everywhere the same procedure and face; they do this through a centralized business strategy. For example they have a global e-ticket system, this enables its customers to book online and reduce processing time (Jesmond, 3). Margins/profits Emirates have been having a good performance over the years; they have grown steadily realizing good profits. They have constantly expanded their fleet to keep up with the times making them a modern carrier.
In the year ended March 31st, 2010, emirates realized a profit of a 416 percent from the 187 million dollars that was posted in the previous fiscal year. The profit of Emirates group was 1. 1 billion dollars at 248 percent on the previous 325 million dollars in the previous fiscal year. The airline in 2009 transported a record 27. 5 million passengers which was 20 percent more than the previous year. The company was affected by the global financial crisis but did enjoy great profits because they were strategically placed in the market and the fact that the Middle East was enjoying good business performance (Emirates, 2010).
Customers Emirates has a wide range of consumers, they have frequent travelers who enjoy the services offered by the carrier. This can be seen by the number of flights they have per week. They are the preferred flight for many who are going in and away from the Middle East. A good number of business men and women use Emirates, either the first or the business classes. They have the in-flight phone and internet service that allows their consumers to connect with their work and family. It is for this reason that they are preferred by business men and women (Jesmond, 2).
It has a huge customer base from the east countries and 205 from the EU. Their cargo division handles transportation of goods for many companies to all parts of the world. Many private businesses use the carrier to carry their goods to the six continents in which it operates. They transport for DHL and FedEx. SWOT Strengths i. Emirates airline is strategically located; their headquarters in UAE give them a central location and access to many markets. ii. The fact that UAE has created a free market provides the airline with many customers who are there for business.
iii. They have a wide variety of products that give their customers satisfaction. iv. The support they enjoy from the UAE government. v. Good product brands. Weaknesses i. Economic crisis that have caused it to increase running costs, increase efficiency and reduce emissions. ii. high taxation Opportunities i. They have access to developing markets like china. ii. They are able to move into new attractive markets. iii. enjoy an international market iv. Government support. Threats i. Policies especially in some European countries and growing red tapes and regulations.
ii. political influence in the regions they expand into iii. Perceptions of the company, occasioned by the bad press on free fuel, subsidies and. iv. Global recession. Boston Matrix This is the best known management tool, the reason being that it is based on the product cycle theory. The BCG is used to determine what priorities are given to the product of the business. We use the BCG to explain the market share and growth (Mohammed, 2006). STARS (high growth & market share): these are the products that use large amounts of cash and should produce large amounts of cash.
Emirates star products are their fleets of planes that support passenger and cargo transportation use a lot of capital to purchase and maintain and Dnata and the ground handling facilities. They also have skywards, calogi, and transguard. CASH COWS (they have low growth and high market share): for emirates these products are like their IT like EmQuest and Mercator and engineering and training, flight catering and tour travels. DOGS (have low growth & market share): for emirates these products are hotels like the holiday lounge and premier inn. QUESTION MARKS (high growth & low market share) Internal Factor Analysis summary