Emirates Airlines’ Success Trajectory

Introduction

Emirates Airlines is one of the leading airlines in the global aviation industry. According to Morrell (2013), the aviation industry is one of the most competitive industries in the current global market. At the time when this firm was founded, the level of market competition was relatively low. However, the company has been able to overcome numerous challenges in the market to become one of the most dominant players globally in this industry.

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According to a report by Papatheodorou (2016), Emirates Airline is currently the second-biggest airline in the world in terms of the tone kilometers flown. The management of this company has been keen on monitoring the market forces and coming up with unique products that meet the emerging needs. During the 2008 global economic recession, many airlines were seriously affected as the number of passengers flying from one city to the other dropped significantly.

Many companies were forced to cut down their number of daily flights per day in light of the market forces. However, Emirates Airlines was one of the least affected companies during that recession. That was partly attributed to the unique market strategies that it has been using to overcome the challenges in the market.

The path that this firm has taken to achieve its current success shows its great commitment towards understanding the changing market forces and responding to them in the most appropriate way possible. The company was chosen because of its massive success in the aviation industry over the recent past and the critical role it plays in the country’s economy. In this report, the researcher seeks to determine the trajectory of the success of Emirates Airline and how the strategy can be applied in other companies.

The trajectory of Success of Emirates Airline

Foundation of the Company

Emirates Airline was founded in the mid-1980s following the decision of Gulf Air- then the leading airline company in the region- to cut down its flights to the city of Dubai. This was a major blow to the government of Dubai and the United Arab Emirates’ economy in general. The government was trying to diversify its economy to help it reduce its overreliance on oil and gas export. The city of Dubai was emerging as a regional tourist destination and it needed a reliable airline to fly these tourists from other parts of the world to the city and back. The government of Dubai, therefore, decided to come up with a national carrier instead of relying on foreign airlines.

In 1985, the royal family in Dubai invested US$10 million into the project of starting a new airline company. In its early days, the company started by majorly relying on leased airplanes because the available capital could not afford to purchase the needed planes so the management opted to lease. The primary focus during its initial years of operation was to cover regional cities to meet the gap that was left when Gulf Air canceled most of its flight to the country.

The firm encountered numerous challenges during these early times, especially because of the limited experience that some of the managers at this firm had in the aviation industry. Unlike today where information is easily available, during this time it was not easy to collect market research, complicating further the problems that this company was facing. However, the management of this firm was able to overcome these challenges and it started experiencing rapid expansion in the mid-1990s.

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Expansion of the Company

The government of Dubai continued to invest in Emirates Airlines in the late 1980s and mid-1990s despite the challenges that the firm faced. When the Gulf War started, things changed for this company as the region became volatile. Major airlines that frequented the Middle East canceled these routes completely due to security concerns. Even some of the regional airline companies such as Gulf Air avoided many routes in the region because of the fear of a possible attack.

However, the management of Emirates Airlines saw an opportunity at a time when other companies saw threats and hindrances. After mapping the pattern of war and regions that were volatile, the airline moved with speed to expand its market coverage, capturing the gaps left by the airlines that were avoiding the region. It made calculated risks and ensured that regions where sporadic attacks were possible, especially those regions where the surface to air rocket launchers was common, were completely avoided. This was a very unique market strategy, which enabled this firm to achieve massive growth in the 1990s.

Most of the dominant airline companies ignored this company despite its rapid growth because it was perceived as a regional airline.

The company continued to invest in strengthening its brand and expanding its market coverage. When the Gulf War ended, Emirates Airlines had established itself as a major airline company flying to major cities in Asia, Europe, and North Africa. The management of this firm also opted to use mergers and acquisitions as a way of expanding the operations of this company. In 1998, Emirates Airlines acquired 43.6% stakes in the Sri Lankan Airlines for US$70 million.

As it entered the 21st century, it started investing in large Boeing and Airbuses to meet its increasing customers’ needs. The figure below shows the current logo that this company has been using to distinguish its brand from others that exist in the current market

Emirates logo.
Figure 1: Emirates logo.

Strategies Used to Expand

According to Peng and Peng (2014), the aviation industry is one of the most vulnerable industries that is often affected by so many natural and market forces. When the economy of a country is affected, the airline industry is one of those that often feel the pinch. When insecurity arises such as that witnessed in countries such as Syria and Iraq, the airline industry gets affected. Other issues such as fluctuating oil prices and rising cases of acts of terror all have a significant impact on the tourism industry. However, Emirates Airlines has managed to overcome all these external environmental challenges. It is important to look at strategies that enabled Emirates Airlines to achieve the level of success it needed in the market.

Mass media marketing

According to Taneja (2014), one of the strategies that have enabled Emirates Airlines to achieve its current success is the effort that has been put on promoting its brand in the international market. The brand has been propositioned as one that is reliable and keen on meeting the needs of its customers. The mass media marketing campaigns made the brand for this company to be conspicuous not only in the local market but also at regional and international levels.

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Aljazeera, BBC, and CNN are some of the global television networks that this firm has used to promote its product. As a global company targeting global customers, it was necessary to have a platform that would help it reach its potential customers from all over the world. The relentless mass media campaigns have enabled this brand to become one of the most known airline brands in the world.

Social media marketing

The emergence of social media transformed the approach that this company takes to promote its brands to its global audience. According to a report by Taneja (2014), Facebook has over 1.6 billion regular users. Twitter, YouTube, and Snapchat also have huge following globally. Although Emirates Airlines still uses mass media marketing, it is also making a huge investment in the social media platform. Knowing that most of its current and potential customers use these social media platforms, the firm has developed social media campaign messages meant to target these customers. The social media platform offers what the mass media platform does not, and that is customer feedback.

The platform offers two-way traffic communication with customers. The firm can understand the concerns and expectations of the customers without necessarily engaging them in marketing research interviews. The comments that customers make in social media platforms has enabled it to identify both its strength and weaknesses in its operations. Their suggestions have enabled the firm to know of the most appropriate way of overcoming these weaknesses from the customers.

Sponsoring

According to Peng and Peng (2014), customers are often bombarded with constant promotional messages from various companies and they are learning how to ignore promotional messages. The study found out that people often view most of the adverts they come across as a nuisance because they are unsolicited. Emirates Airline is one of the companies in the aviation sector that have learned how to reach to potential customers without being considered a bother. The company sponsors various sports across the world not only as part of its corporate social responsibility but also as a means of promoting its brand globally.

Emirates sponsors Cricket Australia and many other cricket teams and tournaments (Low, 2012). It has sponsored several FIFA world cups and it is the current sponsor of the Arsenal Football Club, one of the most popular football clubs in the world. Major football clubs such as Real Madrid, AC Milan, Paris Saint-Germain, and Benfica have also been sponsored by Emirates in the past. It is also a major sponsor of many other sports such as rugby, athletics, and tennis among others. As it gives back to society through these teams, the company has been able to build a name for itself in the market. Its brand is getting strong and it remains appealing, especially among football lovers. The strategy m

Human Resource Strategy

One of the strategies that Emirates Airlines has used to achieve its current success is investing in human resources. As Morrell (2013) says, the products offered by airline companies are largely similar across different brands. They all enable their customers to move from one part of the world to the other. To make itself unique, the firm has come up with a human resource strategy that gives it an edge over its rivals.

The firm has invested a lot in hiring highly skilled employees who have experience in this industry. It has been keen on identifying highly skilled pilots who can ensure the safety of its passengers even in extreme conditions. The firm has also been investing in employee training to ensure that the employees are abreast with the emerging practices in the industry. The flight attendants are often trained regularly to enable them to understand how they can attend to clients from different backgrounds in the best way possible. The company has also come up with very attractive remuneration packages to ensure that the rate of employee turnover is reduced as much as possible.

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The open-door policy that the firm introduced was meant to ease communication between junior employees and top managers. Concerns that junior employees have and any ideas that can enable the firm to move ahead of its rivals can easily be passed to the top managers of the company. Recently when the employees raised concern that they are being overworked, the company moved with speed to address the issue as a way of ensuring that its workforce remains motivated and committed to delivering quality services to the customers.

Investment in the Emerging Technologies and New Planes

Emirates Airlines’ trajectory of success cannot be complete without looking at the massive investment that it has made in emerging technologies. It was one of the first Airlines to introduce customized entertainment systems for travelers. Figure 2 below shows the entertainment systems in the planes of this firm which are fully controlled by the individual passengers. The passengers can watch what they want whenever they want to as long as they are on board these planes. This was a massive change in the entertainment services offered by airline companies. It was an indication that this company was keen on understanding the needs of its customers and then meeting them in the best way possible

Entertainment systems in Emirates Airline’s Planes.
Figure 2: Entertainment systems in Emirates Airline’s Planes.

It also invested in purchasing new larger and improved planes from Boeing and Airbus companies. It was one of the first airline companies, which came up with a unique menu for its customers based on their varying needs. Technology has transformed the way this company offers its products to its customers. The clients no longer have to visit the company’s offices to book for their flights. All the services are available on the online platform. Emirates Airline is currently one of the dominant firms in the global aviation sector.

How Royal Jet Can Apply Strategies of Success and Tactics

Royal Jet is one of the mid-sized airline companies in the United Arab Emirates. The company has its headquarters in Abu Dhabi International Airport and it mostly offers chartered services for the upmarket clients within the United Arab Emirates and Europe. Founded in 2003, the company currently has a fleet size of 10 planes that it charters to its customers. Although the firm has specialized in offering services to a specific market niche its operations are still limited to Europe and the United Arab Emirates. It should use some of the strategies that Emirates Airlines used to help it achieve greater market success. The firm should take into consideration the following strategies:

Social and Mass Media Marketing

Royal Jet has a clearly defined market segment, the rich who can afford the chartered planes. It is possible to maintain direct contact with these customers, making it less necessary to engage in massive advertisements. However, this firm should know that there are potential customers who are not aware of its brand. Advertisements will help the firm bring out the prestige that the brand offers, making it more popular among its current and potential customers. The firm should use both mass media and social media platforms in the same way that Emirates Airlines did to achieve the desired success in the market.

Sponsorship

Royal Jet may need to consider using sponsorship as a way of winning more loyal customers in the market. Sponsorship has enabled Emirates Airlines to create a pool of loyal customers, especially the lovers of football. Given that this company targets the rich, this firm should target sports such as golf that is popular among the rich. Sponsoring these teams will keep it closer to its customers in the market. The strategy will enable this company to expand its market share beyond the current market. According to Morrell (2013), sponsorship often creates an impression that a company is not only interested in profits but also on other social issues within the society where they operate. Such an image will be beneficial to this firm given that it targets the rich.

Investment in Emerging Technologies

The management of Royal Jet should be keen on investing in emerging technologies as a way of gaining a competitive edge over its rivals in the market. Just like the approach that Emirates Airlines used, Royal Jet should upgrade its planes using the emerging technologies to meet the unique needs of its customers. It should be keen on understanding the unique needs of the customers and use emerging technologies to meet them in the best way possible.

As Morrell (2013) notes, in the current competitive business environment, companies can no longer ignore the need to embrace change. Emerging technologies are creating new and better ways of delivering excellent service to customers. This firm should be keen on understanding the emerging trends to ensure that its customers get the best.

Conclusion

Emirates Airlines is one of the leading airlines in the current aviation industry. It operates globally and dominates the regional market. The path the company took towards its current success was marred by numerous challenges. The company had to overcome stiff market competition and other market challenges to become a dominant player in the global market. Emirates came up with several strategies to enable it to achieve the desired success.

The use of emerging technologies, its commitment to having a team of highly skilled and satisfied customers, and massive promotional campaigns are some of the factors that have enabled the company to achieve the current success. The company has also come up with an effective human resource strategy to ensure that it recruits and retains a team of highly talented employees. Royal Jet can use the same strategies that have been used by Emirates Airlines to achieve market success. Royal Jet will need to expand its scope of the market beyond the United Arab Emirates and Europe.

References

Low, L. (2012). Abu Dhabi’s vision 2030: An ongoing journey of economic development. Singapore: World Scientific.

Morrell, P. S. (2013). Airline finance. Farnham, Surrey, UK: Ashgate.

Papatheodorou, A. (2016). Aviation and tourism: Implications for leisure travel. New York, NY: Taylor & Francis.

Peng, M., & Peng, A. (2014). Global business. Mason, OH: Cengage Learning/South Western.

Taneja, N. K. (2014). Designing future-oriented airline businesses. Burlington, VT: Ashgate.

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