Emirates
The Emirates in an international airline company based in the United Arab Emirates, with its main operations hub in Dubai and air flight routes to more than 142 destinations in the world’s five continents. As one of the big Gulf airlines, the Emirates has established its brand across the world as an important intercontinental airline. The company’s staffs are made up of people from 160 nationalities, which represent the global nature of the airline’s workforce. Currently, there are 84,000 employees helping the airline stay within the top-ten bracket in the world. The company had a profit margin of 5.7 in 2014 and 4.7 in 2013 (The Emirates Group, 2015).
The company has more than 280 planes and expects to increase the number by 100 in the medium-term. It began operations in 1985, and it has contributed to making Dubai the world’s busiest airport after London’s Heathrow (Tovey, 2015).
Etihad
The Etihad is an international airline from the United Arab Emirates, with its headquarters and operations in Abu Dhabi international airport. The airline has a fleet size of 114 and covers more than 120 destinations around the world. The Etihad offers luxury business class travels for its customers and offers decent options for its economy class compared to the offers from the competition. The airline is the flag carrier of the Emirati of Abu Dhabi, which is also the capital of the UAE. The staffs directly employed by the Etihad number more than 8000 and work in different departments for its operations around the world. They include finance, marketing, flying, and sales, among other positions (Mouawad, 2015). The company began operations in 2004.
Target markets
The Emirates targets business and economy class travellers in its major routes around the world. Luxurious services and other offerings serve as some of its main competitive advantages over other airlines. The Emirates seeks to attract customers who are looking for more value for their money. It offers in-flight telephone services and has ample legroom for all its long distance flights. It also provides cuisines from various parts of the world at free or affordable rates to its passengers.
The airline is pricey compared to its rivals, but passengers can book early to get competitive prices. The Emirates wants to increase its offerings in every continent so that it can sustain a major global airline position. Therefore, it targets every traveller with offerings for luxury, economy, and business classes. However, it does not go for the budget airline markets that cut out extra offerings and the price of a ticket (Schreck, 2015).
The Etihad has been making significant inroads in the European markets that were underserved by the main airlines in respective European countries. At the same time, the company seeks to catch up with its national rivals. The Etihad is targeting passengers from all the major markets in the world, including China. With rapid expansion, the airline hopes to achieve a similar capacity to the Emirates and offer better luxury options for trendy passengers and tourist travellers. The underserved markets offer growth potential, in addition to the traditional markets that the airline is covering through Asia, America, Europe, and Africa.
Points of parity (POP)
Both airlines run innovative operations programs, they have a unique tradition and brand for their in-flight crew, and they are representative of the UAE in the global airline industry as highlighted in the following discussion.
The Etihad is notable for its tradition of dressing its crew in traditional wear for people in the UAE, with female employees wearing clothes that cover their entire bodies. The company values team culture and it uses a tri-yearly labour requirement as a qualification for employing foreign employees. The company is currently running an Emiratisation program to increase its UAE national staff, with the current number being 142 working on overseas position. The number was expected to move to 175 by the end of 2014.
The Emirates slogan is “Emirates: Keep discovering”, which has helped drive the innovative culture necessary for success in the highly competitive global airline industry. The Emirates’ in-flight crew has a unique uniform that helps to identify the carrier brand. In terms of operations, the company runs a Flextracks program that relies on technology and analysis to find out the shortest route to any destination and inform pilots so that the overall fuel used per trip reduces. To provide an all-round service, the carrier also has subsidiaries handling airport services, engineering, hospitality services, and tour operator operations.
Both airlines have the major shareholders as their respective Emirati governments. Abu Dhabi owns the Etihad, while Dubai owns Emirates. Both airlines have hubs in the UAE and carry out elaborate programs to cut fuel costs and limit their harm to the environment. Both airlines allow passengers to have the first two bags checked in free for all flight classes.
Points of differences (POD)
The Etihad serves Antarctica and South America as part of its underserved business strategy, while the Emirates is still working on plans to cover these regions. The two airlines operate from different hubs within the UAE and have various financiers and major shareholders. The cost of the third bag checked in at the Etihad is $175, while the same costs $158 at the Emirates. The average age of fleet for the Etihad is younger than that of the Emirates by about a year, and the fleet size of the Emirates surpasses that of Etihad by about 100 planes.
The Emirates allows passengers to check-in ammunition as a special service. Other provisions are for scuba diving equipment and wheelchairs. On the other hand, the Etihad only allows archery equipment, boating equipment, skim boards, hunting spoils, and musical instruments. However, it does not offer vegan meals as the Emirates does. The Emirates has also been innovative to offer in-flight Wi-Fi, which is unavailable at the Etihad.
In their competitive strategies, the Etihad seeks to be a national airline of the UAE; therefore, it embraces strategies that push it towards this position, while the Emirates eyes the global airline position. Its expansion strategy follows business motivations only due to the limited association with its national carrier status. For example, while expanding, the Etihad seeks to have a presence in all countries to extend the culture of the UAE and promote tourism. On the other hand, the Emirates’ expansion is driven by business growth prospects. Although the airline has a larger fleet than the Etihad, it still does not cover many destinations covered by its rival.
The passenger growth strategy for the Etihad has been to rely on partner networks to feed it with passengers. To achieve the goal, the airline has been acquiring stakes in the main European airlines while the Emirates relies on its network growth (CAPA, 2015).
Have they defined their positioning correctly?
Both airlines rely on central areas of control to manage their fleet and routes and ensure they move passengers smoothly across destinations. They also continuously make developments on their operation hubs to meet their capacity demands as they move passengers through the hubs to various destinations. In addition, they are negotiating with various governments in their markets to increase their access to airports and allow them to increase the size of their fleet to the destinations.
They have taken a position aimed at the business and luxury traveller markets. They still offer exceptional offerings for the economy class. Their strategies are to upgrade passengers to the high classes, where they pay more and offer a wide business margin for the airlines. In this regard, the airlines have been marketing their luxury and business offerings to their target markets. Part of their growth strategy has seen them order a significant number of planes to keep their fleet young.
How might it be improved?
Concentrating on the airline capacity for growth and delivery of services as a competitive strategy is good. Innovativeness in offerings to customers is also welcome. However, the airlines must also pay more attention to employee compensation, training, and culture programs. As they increase their scale of operations, they risk losing a personal touch because of too much bureaucracy and standardized staff practices that limit individual employee expression of various hospitality gestures to passengers. Expansion has also meant a reliance on subsidiaries and third-party service providers for different airport services. While pursuing this move, there should be more monitoring and control efforts to ensure the airlines’ value is not eroded.
References
CAPA. (2015). Alitalia’s “new” strategy realigns it to feed Etihad, but needs to change loss-making mindset. Web.
Mouawad, J. (2015). Etihad airways’ rapid growth frustrates rivals. The New York Times. Web.
Schreck, A. (2015). AP Interview: Emirates airline boss see more US growth. Yahoo News. Web.
The Emirates Group. (2015). Annual report 2014-2015: Keeping a steady compass. Web.
Tovey, A. (2015). Emirates to add 11,000 staff as airline continues to soar. The Telegraph. Web.