Company background
Emirates Airlines was founded in 1985 in the United Arabs Emirates (UAE). The firm is entirely owned by the Dubai government and it ranks as the largest airline company in the Middle East. The firm’s operations entail providing customers with commercial air transport services. It is estimated that the “firm operates approximately 3,400 flights every week from its main hub, which is located at the Dubai International Airport” (Emirates par.3). The airline serves over 150 cities, which are located in 74 different countries. The firm’s destinations are located across the six continents of the world.
Moreover, “the firm is ranked amongst the top 10 largest airlines with reference to the number of passenger carried, fleet size, and revenue” (Emirates par. 5). During its 2011/2012 financial report, Emirates Airlines carried over 34 million passengers and 1.8 million tonnes of goods. The firm projects that its customer base will increase into the future. It is estimated that the company accounts for approximately 40% of all flights in Dubai International Airport. Its headquarters are located at Garhoud, Dubai.
Industry in which the company competes
The firm is ranked as the third largest airline company in the world. Its major competitors include Etihad, British Airways, Air France, Qatar Airways, Virgin Atlantic, and Swiss Airlines. The firm competes amongst 23 companies in the Middle East. Since its inception, the firm has been committed towards improving its capacity, which is evidenced by the rate of its expansion with regard to fleet size. Upon its entry in the UAE airline industry, the firm had a fleet size of only two aircrafts, which included a 300 B4 Airbus and a leased 737 Boeing; however, the firm has been constantly expanding its network. The firm’s commitment towards market growth is evidenced by the rate at which the firm is introducing new aircrafts. In 2001, the firm ordered 58 new aircrafts, which comprised Boeing and Airbus models. Currently, the firm operates over 230 aircrafts. The airline’s commitment towards attaining an optimal market position is evidenced by the rate at which the firm is expanding its fleet size.
The firm intends to transform Dubai into a long haul and global aviation hub (CAPA Centre for Aviation par. 1). The firm intends to be the leader in the global airline industry. The firm has formulated comprehensive quality policy, which guides its operation; thus, Emirates Airlines has been in a position to provide customers with high quality airline services. Moreover, its growth has emerged from integration of effective competitive strategies. This aspect has enabled the firm to develop and attain an optimal market position compared to other international carriers. The firm perceives competition to be a critical element in shaping and maintaining its organizational identity and competitiveness (Longernecker 45).
Despite the view that the airline is wholly owned by the Dubai government, the firm is independent in its operation. This aspect has enabled it to maintain a high level of corporate transparency. The firm is also committed to taking advantage of business opportunities that emerge from the business environment. Consequently, the firm has emerged as a globally recognized tourism and travel airline company.
The firm’s success over the years can be attributed to its ethical foundations. Emirates Airlines operations are based on a number of shared values. These values include social and environmental responsibility, adherence to business ethics and respecting the needs of the various stakeholders such as customers and employees. Thus, the firm is committed towards developing a strong relationship with its internal and external stakeholders. For example, the firm is committed towards caring for its employees, the community that it serves, and the environment. Emirates Airlines’ management team is of the opinion that the internal and external stakeholders will play a critical role in shaping its future.
The firm recognizes the importance of developing a strong human capital base. Subsequently, the firm considers its staff as its most valuable organizational asset. This has led to improvement in the employees’ level of creativity, motivation and commitment hence enhancing the firm’s performance. Currently, the firm has a total human resource base of over 28,000 employees, which makes it the largest employer in the Gulf region. The firm has amassed over 400 awards for its excellent performance. The airline has established a number of subsidiaries, which include Emirates Tours, Arabian Adventures, Emirates Holidays, and Congress Solutions International.
Strategy of the Company
Attaining an optimal market position is critical in a firm’s effort to remain competitive. Positioning acts as a defensive mechanism against competition. Moreover, positioning enables a firm to survive in an industry characterized by ineffective structure. Wit and Meyer argue that the “fundamental basis of above-average performance in the long run is sustainable competitive advantage” (268). An organization can have two main types of competitive advantage and they relate to differentiation and low cost.
Johnson et al. assert that these competitive advantages lead to the development of three main generic strategies, which include focus, cost leadership, and differentiation (508). Differentiation strategy enables an organization to gain sufficient competitive advantage because it acts as a defense mechanism against competitors. However, it is imperative for organizations to ensure that their differentiation strategies are effectively formulated and implemented.
Emirates Airlines has integrated differentiation as its core competitive strategy. Wit and Meyer define differentiation to include the process through which an organization seeks to be unique (269). Differentiation strategy is based on the market variables that are greatly valued by buyers. An organization can base its differentiation strategy upon different elements. Some of these elements include the firm’s delivery system and marketing approach. Consequently, firms select the most valued attributes as its market differentiation variables. Emirates Airlines has selected technology as its core market differentiation variable. The firm has positioned itself as a legacy by integrating innovative technology.
One of the areas that the firm has focused on relates to improvement on its internal systems efficiency. Emirates Airlines appreciates the importance of continuous innovation. Its innovation strategy is not limited to fleet expansion as it also extends to its workforce. For example, the airline has created an IT Innovation Board, which is charged with the responsibility of reviewing the firm’s performance with regard to technology. The Board meets quarterly for a brainstorming session on how to improve the firm’s internal systems. Subsequently, the firm is able to provide new technological solutions hence optimizing its performance. This aspect has enabled the firm to provide customers with optimal services.
According to Cohen, Emirates Airlines is considered as one of the most innovative and forward-thinking airline companies (65). In 2007, Emirates Airlines commenced the process of constructing a luxury five-star restaurant and tower. Moreover, the firm implemented Apple computer technology in its fleet. The objective of the installation was to provide customers with an opportunity to listen to music through their iPods and video players.
In line with its technological commitment, Emirates Airlines has implemented a knowledge-driven in-flight service [KIS] system. The system was implemented through partnership amongst Hewlett-Packard, Microsoft, and the Emirates Group Information Technology department. The system aims at improving the airline’s operational efficiency. Through the KIS system, the airline has been in a position to offer customers personalized services. Aisi asserts that the “technology places flight, staff, and passenger-related information into the hands of the Emirates cabin crew” (par. 3).
The cabin crew is in a position to respond to dynamic customer and operational needs. The new technology has played a critical role in enabling the firm to provide customers with unrivalled and high levels of customer services. For example, the KIS tablet has enabled the firm’s crew, who are over 17,000, to interact with one another. Therefore, it has significantly enhanced their capability to serve over 35 million customers annually; hence, one can assert that the technology has contributed towards the creation of an optimal customer experience.
According to Chennai 360, Emirates Airlines is not only concerned with getting customers from point A to point B (par. 2). On the contrary, the firm is committed towards seeking new opportunities to do things in a better way. Consequently, the firm is continuously evaluating how it can leverage on new technologies in order to improve the customers’ travel experience and its operational efficiency at every point of its operation (Chennai 360 par. 3).
Operational Areas
Operations Management (OM) is a fundamental component in the success of businesses. Mishra defines operations management as “the management of the conversion process, which converts land, labor, capital, and management inputs into desired outputs of goods and services” (88). Operations management is concerned with an organization’s design and management of its services, supply chains, and products. Moreover, operations management is concerned with how an organization utilizes its resources in order to deliver optimal services to customers (Eigenmann 45).
Operations management is comprised of a number of areas, which range from tactical, operational, and strategic levels (MIT Sloan Management par. 2). The tactical issues relate to the firm’s project management method, structure, equipment selection, and selection. On the other hand, the operational issues relate to inventory management, material handling and traffic, scheduling, and production amongst others (Shah 112).
Emirates Airlines has organized its operations into a number of operational areas commonly known as departments as illustrated herein.
- Procurement and logistics department – The department is charged with the responsibility of sourcing, evaluating, and negotiating for various high value and complex services and commodities. The department ensures that all the firm’s commodities and services align with the set procurement and logistics standards.
- Quality control– According to Shah, quality control forms the basis of the Emirates Airlines’ success (23). The quality control department is charged with the responsibility of ensuring that the firm’s fleets are in top-notch condition. Moreover, the department ensures that the firm has a state-of-the-art airline fleet. Considering the view that Emirates Airlines deals with service provision, the department has to ensure that customers are treated with the highest standards.
- Information technology– The firm is committed towards providing customers with optimal services. In a bid to achieve this goal, the firm has constituted an information technology department. The department enables the airline to provide customers with diverse IT solutions and services. The department is charged with the responsibility of improving the firm’s IT solutions.
- Traffic and scheduling– Emirates Airlines serves numerous destinations across the six continents, and thus in a bid to serve its customers effectively, the airline ensures that the flights are effectively scheduled and controlled across all the routes.
- Human resource- The Emirates Group is committed towards developing a strong, innovative, and flexible human capital base, and to achieve this goal, the firm has constituted a HR department. The department is charged with the responsibility of balancing the firm and the employees’ interests (Emirates Group Career Centre par. 1).
- Finance and audit – The firm appreciates the role of finance in enhancing its success. The department ensures that the firm’s finances are controlled and utilized effectively. The department is comprised of different divisions, which include corporate treasury, internal audits, revenue accounts, and financial systems and procedures, financial reporting, and accounting control.
- Planning and research – the department is charged with the responsibility of devising the airline’s strategy. The department is comprised of two main units, which include the Marketing Research and the Planning department.
- Corporate communications– Emirates Airlines is cognizant of the importance of effective marketing communication, which is undertaken by the corporate communications division.
- Cabin crew operations and service delivery – the firm is committed towards providing customers with high quality in-flight services. As a result, the firm has instituted a well-trained cabin crew department.
- Engineering – the firm’s engineering department ensures that the aircraft and airbuses are in the right condition. The department is comprised of highly trained personnel, and thus the firm is in a position to provide customers with safe and high quality services culminating into a high level of customer satisfaction.
Through departmentalization, the airline has been able to nurture a high level of managerial specialization. For example, the airline ensures that its departmental heads possess special skills and knowledge to handle the operations of the department. Departmentalization has remarkably stimulated Emirates’ growth and expansion. For example, the airline is able to identify how it can expand operations by establishing sub-departments. This has played a critical role in improving the airline’s ability to handle additional workload. Moreover, departmentalization has also enabled Emirates to attain decentralization.
Subsequently, departmental heads have sufficient powers to control and make decisions that affect their respective departments. By organizing its operations into different departments, Emirates Airlines has been able to boost the employees’ morale hence leading to improvement in the organizations operational efficiency. Other benefits that the airline has gained from departmentalization include attainment of a high level of administrative control, intra-departmental co-ordination and fixation of responsibility on the various departmental heads.
Product and Service Design
The global business environment has become very dynamic due to the intensity of competition and change in consumer behavior (Morelli 4). Therefore, product success depends on an organization’s ability to outdo the prevailing market competition. Moreover, it is fundamental for businesses to ensure that their products and services capture the customers’ imaginations. Therefore, firms’ products and services should meet the customers’ requirements. Gecevska emphasizes that an organization’s products and services should satisfy the customers’ requirements with reference to price, style, timing, performance, and function (323).
In order to meet the customers’ dynamic needs and services, it is imperative for businesses to integrate the concept of product and service design in their operations management. Gotimer emphasizes that product design is driven by the need to nurture a high level of customer satisfaction (128). Service design entails “the process of organizing, planning human resource, communication, and allocation of material components in an effort to enhance the delivery of service” (Gotimer 129). In the process of designing a particular service, it is important for an organization to ensure that there is no variation between the service provided and the customers’ expectations. Moreover, an organization has to ensure that an optimal degree of contact is established.
The process of designing and developing new services in Emirates Airlines is undertaken under the auspices of the engineering department. The firm’s Engineering Projects section is comprised of employees who are experts in designing and developing new services. The designing process is comprised of a number of teams, which include the in-flight, team, the entertainment team, the new technology team, and the cabin interiors team (Emirates par. 2). The IFE team is charged with the responsibility of designing and implementing advanced in-flight entertainment systems. The operations of the new technology team entail ensuring that the firm’s technologies align with the prevailing technological innovation in the industry. On the other hand, the cabin interiors team ensures that customers are comfortable by providing them with the necessary amenities (Emirates par. 2).
The firm has adopted a comprehensive environmental policy, which has enhanced its ability to operate in an environmentally sustainable manner. The airline has positioned itself as the pioneer with regard to sustainable air travel. Tim Clark, the airline’s Chief Executive Officer asserts that Emirates is the world’s most environmentally sustainable airline. One of the factors that the firm has focused on in an effort to protect the environment relates to fuel efficiency (International Air Transport Association par. 9).
The airline collaborates with “aircraft manufacturers in an effort to design and develop lighter and fuel-efficient aircraft, such as Boeing 777 and the Airbus A380” (Emirates par. 9). Furthermore, the airline is focused in developing and designing greener engines. The airline’s commitment to operate in an environmentally sustainable manner is also evidenced by the fact that the airline has designed effective systems that reduces flight time. The airline has also formulated effective ground operation measures, which have enhanced its ability to reduce carbon emissions emanating from the diverse ground operations.
In 2012, the airline ceased the operations of 1,062 heavy and light vehicles. This reduced the airline’s carbon emission by 5,528 tons. Currently, the airline operates over 4,400 vehicles in Dubai. However, the airline is contemplating introducing a crew-transport-optimization programme and a hybrid baggage tractor. This will reduce the airlines carbon emission (International Air Transport Association par. 12). Moreover, the firm’s employees are committed in ensuring that their activities do not contribute to environmental pollution (Emirates par. 2).
Emirates Airlines has also invested in an effective flight-planning system known as Flex Tracks. This enables the airline to optimize on its routes and to plan its flights with high efficiency. The airline also collaborates with other partners hence enhancing its capacity to utilize flexible air-traffic routes. Within one year, the airline was able to save 57 hours with regard to trip time and 628 tons of fuel. According to Tim Clark, the airline is able to save an average of 62 litters for every minute. Moreover, the flight-planning system has enabled the airline to reduce its carbon dioxide emission by a margin of 160 kilograms (International Air Transport Association par. 13).
Products move through a number of stages in the course of their existence. These stages include product or service development, introduction phase, growth stage, maturity, and decline as illustrated by figure 1 below.
The product lifecycle is an important source of insight on the progress of a product or service in the market. For example, it makes managers realize that their products or service may die and hence the need to ensure that the products or services are constantly rejuvenated.
The growth stage is characterized by intense competition emanating from the large numbers of new entrants who are attracted by to a particular industry. The main motivation for market entry is the high market potential. The International Air Transport Association (par. 12) emphasizes that the UAE airline industry has been characterized by impressing results over the past 40 years. The International Air Transport Association further opines that the industry’s growth will continue into the future. It is estimated that the industry will be the second fastest growth market with regard to air traffic from 2009 to 2014.
One of the main sources of competitive advantage that an organization can leverage on at the growth stage relates to establishment of an effective distribution strategy. Emirates Airlines can be positioned in the growth phase as evidenced by the high rate at which the airline is establishing new services.
The firm has experienced a significant increment in the level of its profitability over the past 25 years. During its 2012/2013 financial year, Emirates Airlines reported a 52% increase in the level of its profit. The increase in the level of profitability arises from growth in the volume of passengers. The firm’s passenger capacity increased to 39 million during its 2012/2013 financial year.
The firm is investing in continuous service improvement and development in an effort to cement its market dominance. Moreover, continuous service improvement is playing a critical role in enhancing the firm’s product differentiation strategy. In 2012, Emirates Airlines invested in a new Graphical User Interface, which was developed by Panasonic. Its investment in new product and service development has enabled the airline to gain global market reputation for its optimal services (Emirates par. 1).
In line with its safety policy, Emirates has formulated a comprehensive aircraft maintenance programme. Moreover, the airline adheres to the statutory maintenance programme set up by the UAE government. The maintenance process entails inspecting the engines, the aircrafts internal systems and the wheels amongst other parts.
Capacity
A report released by CAPA shows that the majority of the world’s airline companies are cautious of their capacity. During its 2011/2012 financial years, Emirates announced a plan to boost its capacity with regard to international long-haul flights. Currently, the firm is ranked as the leader with regard to the number of its A380s, which are the largest aircrafts in the world. The airline has also been committed towards improvement of its capacity by boosting the Available Seat Kilometers [ASK], which is one of the variables used in determining an airlines’ carrying capacity.
Cole defines ASK as “the measure of a flight’s passenger carrying capacity, which is calculated by multiplying the number of seats on an aircraft by the distance travelled in miles” (187). The ASK is used to determine an airlines’ capacity. According to a report by the Oxford Business Group, Emirates Airlines is ranked as one of the biggest contributors in the transformation of air transport in the Gulf region (76). The airline is experiencing an annual growth rate of 16% with regard to passenger capacity. The chart below shows the airlines’ operating statistics during 2009/2010 and 2010/2011 financial years.
A report released by CAPA in 2012 shows that Emirates Airlines would outdo American Airlines with regard to carrying capacity. During its 2012 financial year, the Emirates Airlines’ capacity was estimated to have increased with a margin of 30% from 2010. On the other hand, American Airlines’ capacity had declined with a margin of 8%. The figure below shows a comparison of the major airlines capacity from 2010 to 2012. The figures represent the number of passengers in millions.
The above table shows that Emirates Airlines has experienced an increment in its carrying capacity over the past two years compared to the other major airlines, which have experienced a significant decline. In 2013, the Emirates Airlines’ capacity increased with 5.4 million passengers. This margin represents a 16% increment compared to its 2012 financial year. The global airline industry is experiencing a high rate of growth. This trend is mainly evident in the emerging markets such as the UAE. According to Black, the UAE is experiencing an increment in demand for air travel (par. 1). Consequently, it is paramount for firms in the industry to consider improving their capacity in order to take advantage of the prevailing market advantage (CAPA Centre for Aviation par. 1).
Emirates Airlines is committed towards improving its capacity. According to the firm’s management team, the airline will not only focus on increasing the frequency of its flights on the existing routes and expanding its network but will also focus on improving its fleet size by purchasing A380 Superjumbo aircraft. This will lead to improvement in the airlines capacity to serve its key routes such as the Tokyo-Narita route.
By improving its fleet, Emirates will improve its capacity with regard to hub-to-hub routes. During its 2012/2013 financial year, the firm allocated Dh. 13.8 billions in its annual budget for acquiring new aircrafts and handling facilities. This amount is intended to enable the firm improve its services (Black par. 2). Black further asserts that Emirates Airlines has experienced the highest increment in its capacity in 2013 (par. 2).
Emirates Airlines projects to fly 70 million passengers by 2020. Subsequently, it is imperative for the firm to plan whether its current infrastructure such as aircrafts and airbuses will support this growth (Emirates par. 9). The firm has added 34 new aircrafts to its fleet. Moreover, the firm has introduced 10 new routes. During its 2012/2013 financial year, Emirates announced a plan to include three additional destinations in its routes. The new routes has emanated from addition of more Airbus 380s. In an effort to serve the growing market demand, the airline has ordered 198 new aircrafts at a cost of $ 71 billion, which are yet to be delivered. The airline plans to increase its aircrafts to over 250 by 2020. This will improve the firm’s ability to serve the 70 million customers across the six continents. Fifty of these aircrafts are A380. This confirms the high demand for large aircrafts in the region in order to meet the growing air traffic.
In the process of procuring the new aircrafts, the firm ensures that they are of high quality. Moreover, the firm ensures that the new aircrafts are fitted with new technologies in order to meet the customers’ requirements and this aspect shows the firm’s commitment in planning for its short and long-term capacity. The above analysis shows that Emirates Airlines is ready to cope with the growth in the aviation industry in the Middle East.
Forecasting
Hoshmand asserts that businesses are increasingly evaluating the most effective strategies to adopt in order to enhance their financial performance (1). In a bid to enhance the likelihood of success, it is imperative for businesses to forecast the future. Hoshmand argues that it is essential for business managers to integrate both domain knowledge and statistical analysis in the process of forecasting (1).
This element aids in developing optimal and credible judgment that an organization can utilize in formulating business strategies. Firms in the service sector can greatly benefit from effective forecasting (Hoshmand 4). Forecasting can enable businesses determine future capacities, inventory, and cost. Consequently, the likelihood of an organization achieving future success is enhanced.
Businesses can utilize two main approaches in their forecasting processes, which include quantitative and qualitative approaches. Qualitative approaches to forecasting relate to the Delphi approach, scenario writing, and interactive or subjective approaches. On the other hand, quantitative approaches entail analyzing historical data within a particular time series. Time series refers to data that is collected within a particular period. The data is then used to predict the future.
Time series approach to forecasting is very effective in making future decisions. According to Hoshmand, managers can use time series to make current decisions and plans (1). Time series approach to forecasting assumes that the past trends with regard to a firm’s performance will continue. The time series method is comprised of different components, which include cyclical variation, irregular variation, seasonal variation, and the secular trend.
Moreover, there are different techniques that can be utilized under the time series method. They include least square method, linear method, and the moving average method. The moving-average method is very effective in determining seasonal fluctuations of a particular element. In order to utilize the moving-average method in forecasting, it is imperative for the collected data to follow a rather liner trend. Moreover, it should have a specific rhythmic pattern with regard to fluctuations.
According to Black, the airline industry in the UAE is expected to undergo a rampant growth (par. 1). The growth will be stimulated by the attractiveness of the UAE as a business and investment destination. Therefore, it is fundamental for airline companies in the country to plan their capacity. The firm intends to establish new destinations. Consequently, the firm has ordered 232 new aircrafts. The new routes might be characterized by fluctuations in the level of demand. Therefore, it is important for the firm to forecast the demand in order to plan effectively (International Air Transport Association par. 6).
Emirates should utilize quantitative approach to forecasting. Specifically, the firm should adopt the moving-average method of forecasting. Emirates Airlines collects data on the number of passengers it has carried within a particular period, for example one year. The firm should utilize this data in forecasting the future. For example, the firm can calculate the 5-year moving average with regard to the number of passengers. The firm will be in a position to establish the trend with regard to change in the volume of its customer base. Using such data, the firm will be in a position to forecast on how it will adjust its capacity in the future.
Emirates Airlines is also cognizant of the role of technology in forecasting. The firm introduced a new revenue forecasting and optimization system known as PROFI during its 2010/2011 financial year. The new technology will enable the firm to forecast and optimize on price and seat inventory. Subsequently, the firm will be able to widen its fare system by introducing diverse booking classes with different prices and restrictions. The Airline also integrated a new Enterprise Resource Planning system. ERP systems contribute towards improvement in forecasting accuracy because an organization can access accurate that can be used in forecasting. The new ERP system will enable Emirates to consolidate its data across the world. This will aid in elimination of redundancy and improvement in the level of its productivity.
Process Selection and Facility Layout
According to Rao, process selection and facility layout refer to the process through which an organization determines how it will produce its products or services (32). The elements of process selection and facilities planning are comprised of a number of decisions, which include technological choice and process planning (Ghuman 3). In the course of its operation, Emirates Airlines has adopted a comprehensive facility planning ad process selection.
The firm’s process selection and facility layout exercises are comprised of a number of elements, which include work design, facilities and equipment selection, layout, evaluating technological change, product and service design, and forecasting. In its process strategy, the firm makes a decision with regard to different aspects, which include how to implement a high level of flexibility, adjust to changes emanating from technological, volume, and design changes.
Moreover, the selection process entails making decisions on various aspects such as how to provide customers with diverse services, how to develop a high level of flexibility in order to align its operation to market changes, and how to address change in the volume of customers. By taking into account these aspects, the airline is in a position to undertake effective planning with regard to capacity (Ingram par. 3).
The airline’s process selection and facility layout also entails automating its operations. The firm has integrated effective programmable automations in order to provide its customers with high quality services. For example, the firm has automated a number of its services such as flight, car, and restaurant booking. Automation of the firm’s services also allows the firm’s customers to check the flight status online and manage their flight booking. The firm has designed a simple online check-in system as illustrated below.
- Check-in online within 24 hours and 90 minutes before flight departure.
- Selecting the seat.
- Printing the boarding pass.
Customers can also check Emirates flight timetable online. Moreover, customers can personalize their travel plans by using the ‘multi-city’ tool. The tool provides customers with an opportunity to book complex itineraries. Through automation, the firm has been in a position to provide customers with high quality services.
In an effort to ensure a high level of synergy, the airline has adopted an effective layout with regard to the various departments. The various departments operate in an interdependent manner. As a result, the firm has been in a position to achieve a high level of operational efficiency (Kerzner 34). The interdependent nature of the various departments has led to improvement in the level of knowledge sharing amongst the employees. Moreover, the layout of the airline into different departments has enabled the airline to be effective in formulating and implementing its short term and long-term operations. Consequently, the firm has been in a position to introduce new products and services.
To position itself as a customer-centric organization, Emirates Airlines has appreciated the importance of effective baggage management. Subsequently, the airline has implemented the most generous baggage policies in the world. The firm has integrated three main baggage allowances as illustrated below
- 50 Kg in the first class.
- 40 Kg in the business class.
- 30 Kg in the economy class.
Customers can also access additional allowances depending on their Emirates Skwards membership, which includes gold, silver or platinum membership. Disabled customers, sportsmen and women travelling with baggage are also eligible for a higher baggage allowance (Emirates par. 4).
Emirates Airlines does not only deal with passengers but also cargo, which is handled by Emirates SkyCargo. The airline ensures that cargo is handled using special equipments. Moreover, cargo is stored using special containers such as the LD36. Subsequently, the airline is able to guarantee its customers security with regard to their cargo. The special equipments have also contributed towards improvement in the airlines cargo capacity.
Quality
Quality is a critical aspect in the success of an organization. Mukherjee asserts that managers “are charged with the responsibility of ensuring that their organizations provide customers with high quality products and services “(206). Consequently, it is imperative for organizational managers to ensure that they provide customers with high quality products and services (Nigam 25). Emirates Airlines is committed towards developing a high level of customer satisfaction. In a bid to achieve this goal, the airline has integrated a number of quality management dimensions.
One of the aspects that the firm has taken into account relates to employee training and development. The decision to adopt this dimension was informed by recognition of the importance of ensuring that its employees have adequate skills in order to provide optimal customer service. The learning and development department undertakes the employee training process. In most cases, the firm undertakes in-house training in order to uphold the differentiation strategy.
The airline’s training programs are held at the Emirates Aviation College, which is located in Dubai. In a bid to ensure that the employees are adequately trained, the airline has developed a strong and dedicated employee training team. The team is comprised of highly qualified training specialists, teachers, and professors. The airline’s aviation college trains employees on different aspects, which include electronic, computer engineering, business management, aerospace engineering, and travel and tourism. Its efficiency with regard to training on engineering has enabled Emirates to be successful in maintaining the aircrafts. The firm also trains its employees on the English language proficiency and management. The airline’s management team ensures that the training program is continuous (Emirates 1).
Through employee training, the firm has equipped its workforce with sufficient skills to serve customers. The firm’s training program is not only focused on ensuring that the employees provide customers with high quality services, but it is also aimed at improving the employees’ talent. This aspect has played a critical role in improving the employees’ morale.
In 2010, Emirates Airlines was ranked first with regard to quality provision (Sambidge par. 1). For example, the airline has integrated an online booking system. Online booking has improved the effectiveness and efficiency with which the Airline delivers unique experience to customers. In 2013, the airline was named as the best airline in the world. Moreover, the airline was awarded as the best airline with regard to the provision of in-flight entertainment. This trend underscores the level of Emirates Airlines in terms of providing high quality services.
In line with its quality policy, Emirates Airlines does not compromise on safety and customer satisfaction. The airlines’ efficiency in providing customers with high quality services is evidenced by its JAR 145 and ISO9002 accreditation. In an effort to improve the quality of its services, Emirates Airlines has adopted different quality management tools. One of these tools includes the Plan-Do-Check-Act tool or the Deming Cycle. The tool enables the firm to identify market needs, design and test a potential solution to the identified need, determine how effective the solution is, and implement the solutions (Emirates 8).
By adopting the tool, the airline has been in a position to implement optimal level of customer service. The firm has improved its in-flight entertainment services (Pfeifer 334) by integrating new and emerging in-flight technologies such as Wi-Fi. Consequently, the firm has been in a position to address the consumers’ needs to stay connected while in the sky. The airline has equipped all its aircrafts seats with an SMS and email service. The airline has also implemented an AeroMobile system, which provides customers with an opportunity to use their mobile phone (Emirates 8).
Emirates Airlines intends to position itself as a customer-centric organization. To achieve this, the firm is focused towards improvement in the level of its service provision. The firm is in the process of constructing seven business and first class lounges in Dubai International Airport. Moreover, the firm is also in the process of upgrading its cabin amenities and changing the level of service provision within the economy class. The airline also intends to enhance its customers’ efficiency while travelling across different destinations. Thus, it has developed an extensive airline partnership. The partnership has significant improved Emirates ability to serve customers beyond its destinations.
The airline has designed a comprehensive baggage service. For example, the firm has hired a team of dedicated porters who assist customers carry their bags when checking in and when picking their bags on arrival. Moreover, the porters assist customers to take their taxi or bus on arrival. However, the service costs customers an additional AED 25 on the regular trolley and AED 75 on flatbed trolley. In addition to the above services, the airline also provides customers with a baggage wrapping service in order to protect the customers’ luggage when travelling.
The bags are wrapped using a strong transparent plastic hence maintaining their condition. This service costs customers an additional AED 20. The airline also provides customers an opportunity to explore Dubai by storing their baggage before the flight. This service is available to both departing and arriving passengers. The charges per bag as illustrated below.
- Non-standard bag-AED 25 for 12 hours.
- Standard bag-AED 20 for 12 hours.
In line with the above services, Emirates Airlines appreciates the importance of offering customers high quality meals. Consequently, the airline adheres to the customers’ dietary requirements. The airline’s meals meet the customers’ dietary, medical and religious requirements. However, the firm has listed the meals that can be provided to customers. Thus, it cannot provide variation to these meals (Emirates par. 3). However, customers are requested to book the special meals in advance, at least 24 hours. Moreover, customers have an obligation to advice the cabin crew on their health conditions such as allergies.
Location
The Emirates Airlines operations are based at Dubai International Airport, which is a public facility. Dubai Airports Company operates the airport and it serves Dubai. The airport is located at Al Garhoud in Dubai. All the firm’s operations depart from terminal 3 at the Dubai International Airport.
The choice of Dubai International Airport, as the airlines’ hub, was subject to a number of factors. First, the airport is strategically located and it serves as the hub for most airline companies in the Middle East such as the Emirates SkyCargo, Flydubai, and Emirates Airlines. The airports’ strategic position enables Emirates Airline to serve over 90% of the total passenger population through its non-stop flights. Emirates Airlines accounts for approximately 64% of all passengers in the Middle East. The airport covers an area of 8,640 acres. Consequently, it is in a position to serve a large number of airlines.
Emirates Airlines selected Dubai International Airport due to the level of its services, safety, infrastructure, terminals, and effective ground transportation. The airport has integrated an effective flight management system. For example, the cargo and passenger flights have different terminals. Moreover, the airport has a well-designed VIP pavilion. The organization of the terminals has provided Emirates Airlines with an opportunity to serve diverse customer groups.
The airline also selected Dubai International Airport due to its level of safety and security. The Civil Aviation Authority (CAA) of Dubai is charged with the responsibility of managing safety and security. CAA has implemented effective security and safety mechanisms. Consequently, the airline is in a position to assure the security and security of its customers. The airport is also equipped with effective passenger and cargo facilities. For example, the airport is fitted with optimal immigration-processing systems. These facilities enable Emirates Airlines to be effective in certifying the customers’ travel documents.
The airport is also served by effective ground transportation systems, which include rail, road, taxi, and buses. The Dubai International Airport is connected to road D89, which is the longest intra-city road in the region. Consequently, the road provides customers’ easy access to the airport. Emirates Airlines also accesses the services of Dubai Metro, which has stations located at terminal 3 and 1. For example, terminal 1 and 3 are served by the Red Line.
Consequently, customers can easily access Emirates Airlines. In addition to the above forms of ground transportation, the airline is also served by buses, which are operated by RTA. The buses are strategically located at the airport’s arrival and departure terminals. The buses also provide travelers with transport facilities to over 80 hotels and restaurants located within Dubai’s city centre. In addition to short distance buses, the airport is serviced by long-distance business services.
The airport is equipped with optimal infrastructure such as airport-traffic control systems, terminals, and passenger terminals. The passenger terminal building is comprised of parking bays, handling areas, and concourse. Other infrastructures relate to taxiways and flower centers. The runways are equipped with effective technologies, which enable the airlines to land and takeoff safely even under poor weather. The airport recently “expanded the runways in an order to handle the Airbus A380” (International Air Transport Association par. 9). Therefore, the airport will provide Emirates Airways with an opportunity to differentiate its service provision by incorporating new and large airbuses in its fleet.
From the above analysis, it is evident that Dubai International Airport acts as an optimal location for Emirates Airlines. The airport also acts as a hub to other international carriers. Consequently, it provides Emirates Airlines with an opportunity to serve a large number of customers. Currently, Dubai International Airport plays a critical role in Emirates effort to establish new routes. The airport acts as a trading link between the developed and the emerging economies.
During its 2011/2012 financial year, the airline was able to increase its international destinations from 102 destinations to 111 destinations. According to the Airline’s management team, the airport will continue to serve as its home for the next 15 years. This decision was arrived at after recognition of the Airports’ Authority effort to expand the airport’s capacity by 20%. Subsequently, the airport will be able to serve 90 million passengers. This will improve its effectiveness and efficiency as a hub for the major airlines, such as Emirates.
Moreover, the airport authority intends to hasten the construction of the new Al Maktoum International Airport. Subsequently, Emirates will be able to operate at the new airport by 2025. The improvement will improve the airports’ capacity to 200 million passengers annually. This will remarkably improve the attractiveness of the airport to international airlines. Some of the airlines that have shown interest on the airport include the discount carriers, Wizz Air and Jazeera Airways.
Conclusion
From the above analysis, one can assert that Emirates Airlines has managed to attain an optimal market position over the past two decades. The firm’s success has arisen from integration and adoption of effective management practices. Example of such practices include relate to operations management, marketing and quality management. The airline’s success is evidenced by the high growth and market expansion. Since its inception, the airline has managed to penetrate the six continents. Moreover, the firm has expanded its fleet size in an effort to serve the prevailing market demand. The firm’s growth has emanated from the adoption of effective competitive strategies. The UAE airline industry is characterized by intense competition due to its high market potential.
Numerous full and low cost airline companies are entering the market in an effort to maximize their profitability. In a bid to survive in such an industry, it is essential for businesses to integrate effective competitive strategies. Emirates Airlines has adopted differentiation as its core competitive strategy. The firm has integrated technology as its differentiation variable.
The firm leverages on technology in order to deliver a unique customer experience. Through differentiation, the firm has been in a position to nurture a high level of customer loyalty. One of the areas that the firm has focused on relates to integrating emerging Information Communication Technologies within its flights. This has played a critical role in enhancing the customers’ level of satisfaction. Considering the high rate of technological change, Emirates Airlines undertakes a continuous review of the prevailing technological changes in order to improve its operational efficiency. Moreover, the airline ensures that its aircrafts are of high quality and safe.
In a bid to achieve this goal, the airline procures its aircrafts from renowned aircraft manufacturing companies such as Boeing. The firm’s success has also emanated from its commitment in controlling the quality of services.
Integration of effective operations management has also enabled the firm to attain a high level of success. The concept of departmentalization has also enhanced the airlines operational efficiency. For example, departmentalization has contributed towards improvement in the level of job satisfaction amongst employees.
The airline has gained insight on how to manage and improve its capacity. The Airline industry in the Middle East is undergoing significant transformation because of increase in demand for air travel. To develop sufficient competitiveness, it is imperative for Emirates to consider the most effective strategy to manage its capacity. The analysis shows that the airline has put substantial effort in managing capacity. For example, the airline has increased the size of its fleet and launched new routes. However, the prevailing market changes calls for improvement in the airline’s capacity.
The airline is cognizant of the importance of creating a unique customer experience. The management team has instituted a comprehensive customer care policy. The policy entails providing customers with optimal services while on ground and during the flight. The airline has implemented effective customer service programs such as in-flight entertainment, luggage assistance and high quality meals during the flights. Moreover, the firm has integrated other ground transport systems such as through buses, cars, and rail. This has played a fundamental role in improving the customers’ level of satisfaction.
The choice of the Dubai International Airport as the airline’s hub has also played a significant role in the firm’s success. The airport provides the airline with an opportunity to connect to different continents, hence serving a large number of customers.
Recommendations
In order to enhance its competitiveness, it is imperative for Emirates Airlines to consider the following issues.
- Innovation – in a bid to meet the customers’ travel needs and requirements, the airline should consider investing in emerging technologies. One of the areas that the firm should focus on relates to in-flight customer satisfaction. The firm should ensure that its aircrafts are fitted with modern and emerging information communication technologies. The firm should also be focused on introducing new products and services, which will allow the firm to attract diverse customer groups.
- Investing in new technology-Emirates Airlines’ management teams should be conscious of the importance of enhancing the firm’s long-term survival. To achieve this, the airline should consider improving its effectiveness and efficiency with regard to forecasting future market trends. The firm should scan the market in order to identify the most effective forecasting technology. Subsequently, the firm will be able to utilize its operations by leveraging on the prevailing data from its operations.
- Customer service training – The airlines’ success over the past decades has arisen from an outstanding customer service. In an effort to deliver unique customer experience, Emirates has integrated an effective knowledge-driven in-flight solution. The KIS is used in briefing the cabin crew on passenger information. Consequently, the crewmembers have prior knowledge on the passengers. This leads to improvement in the airlines ability to provide personalized customer service. Despite its efficiency in serving customers, the airline’s future competitiveness will depend on how well it meets its customers’ needs and requirements. Consequently, it is imperative for the airline to increase its investment on customer service training. The training should focus on different aspects such as how to improve the level of customer satisfaction.
- Fuel efficiency – the airline industry is facing a major challenge arising from fluctuation in global fuel price. In a bid to survive in such an industry, it is imperative for Emirates Airlines to consider the most effective strategies to attain fuel efficiency. One of the aspects that the firm should consider entails integrating and improving utilization of alternative forms of energy. Currently, the airline is considering integrating a new biofuel technology. The airline has invested a substantial amount of money for research and development. This is aimed at determining whether the biofuel is cost-competitive, sustainable and technically safe. This move will improve the firm’s effectiveness in addressing the prevailing environmental challenges such as climate change.
- New routes – in a bid to remain competitive in an industry that is increasingly becoming competitive, it is imperative for the firm to conduct a comprehensive market analysis in order to identify new routes. The airline should target emerging markets such as the Asia, Brazil, and Africa.
- Operations management – Emirates Airlines should consider improving its operational efficiency. In a bid to achieve this goal, the firm should ensure that the operations of the various departments contribute towards the achievement of the desired level of synergy. Consequently, it is imperative for the firm to nurture effective internal communication, which will enhance interaction amongst employees from different departments.
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