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Roshan Ajit Kumar

on 1 February 2015

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Transcript of Sharjah


Emirates has adapted the latest innovations for their fleet and add value to their services while maintaining a high level of efficiency.
The Company has managed to integrate environment friendly methods with the daily operation of their flights mainly due to economically efficient aircrafts.
Solid base hub located in the prominent city of Dubai, which is a strategically sound placing.
Higher financial stability provides edge over rivals as expansion is much easier and swifter.
Low labor costs and a tax-free situation of headquarters ensures fewer hassles for the company.
Emirates skywards has further encouraged frequent flyers to opt for the airline (Emirates group,2014)
Amidst the global success Lack of labor availability locally and
heavy dependence of government and oil exports of the country
subsequently has been a cause for concern for the airline
company. More than half of the labor acquired in their home
base consists of expatriates which could mean added cost due to
immigration and visa procedures. Since, they are government
owned their finances are funded through the well being of the
government and oil exports, finances of the company could suffer
if oil prices fluctuate and drop to ground low prices. Emirates
group has widely diversified its value chain across related
industries which make the entire business cost intensive of which
not all are successful. (Stanik, A. Smith, P. Erakovic, E, 2007).

Emirates can further develop by adding more innovative airline services. Apart from that, Emirates can also cater to travelers with a lower budget, an area which Emirates is yet to set foot upon. The partnership with Qantas also extends their already widespread network. In addition, there are several locations within the United States that Emirates airlines can add routes to. The construction of new airports amongst different locations in Asia also alludes to opportunities for the airline.

Airline companies are constantly under threat due to fluctuating and unpredictable oil prices, which directly impacts their operational costs. In addition to the threat from Low cost carriers like air Arabia and Jazeera airways, Emirates also faces tough competition from its local rivals Etihad airways and Regional rival Qatar airways. Amidst the major expansion in the number of their fleets, Emirates also faces a problem of limited airport infrastructure. Further, Since Emirates airlines is owned by the Government of Dubai, Changes in regulations and policies could also directly affect the functioning of their business.  (Financial Times, 2014.).

Emirates airline has been propitious because of the agreement signed among the countries of the Asian continent. This agreement; which also included USA and Europe, facilitates and provides better political cooperation between the countries. This increases the trade opportunity and development of the aviation sector. (Nataraja & Al‐Aali 1991). In addition, the low taxation policy, low fees charged at the airport, and the easy immigration law for foreigners has aided in the growth of emirates airline

UAE is known for its growth in economy. It has been ranked 19th in World Economic Forum’s for the year 2013, and was the first globally in six divisions of the GCI index ( Emirates 2012). Adding to that, billions of dollars were spent in order to develop and improve the infrastructure of this industry sector ( Emirates 2012).
The economic growth is increasing as the investments taken are rising as well as the support gained from the government itself. Airlines are being perceived as the boost to the global economy due to the connectivity and trade done between other countries (Emirates 2012).

Emirates airlines employ different types of workers in order to have a diversity of experience, creativity, skills and knowledge.  Such characteristics are needed to meet the demands and requirements of airline industry (Nataraja & Al‐Aali 1991). On the other hand, having diversity of highly qualified workers has raised some minor problems and issues posed to UAE.  Airlines have made good profits from skilled workers especially that most organizations in UAE pay about 10 per cent of their operating expenses, while 40 per cent is being paid by businesses in other countries (Nataraja & Al‐Aali 1991).

Governments in the Asian region were under control of the paternal government policy in order to protect airlines from any external factors (Nataraja & Al‐Aali 1991). Later on, changes have occurred to these policies specifically economic policies which allowed the business of airline industry to compete in a different manner (Nataraja & Al‐Aali 1991).  These airlines can have and operate according to their own economic model, which will provide them with a space of freedom to openly compete with other airlines. This will allow Emirates Airlines to sustain their competitive advantage without worrying from legal issues and government interference which will all in turn result in the growth of UAE (Nataraja & Al‐Aali 1991).  

Aviation Sector can have a huge negative impact on the environment resulting in pollution. Due to this reason, Emirates have declared its intention on improving that through its statement “Greener Tomorrow” (Nataraja & Al‐Aali 1991).Emirates airline foundation has committed itself in supporting the environment by collecting US$ 150,000 from internal recycling to reduce any side effects on the environment (Emirates 2014). In addition, Emirates airline has drawn its focus on optimizing efficiency and effectiveness in carrying its operations; with consideration to the environment. It has replaced 15 tractors that are utilized for dragging cargo-trolleys as well as diesel-powered equipment that are used in Terminal 2, with electric-powered equipment to have a step forward in achieving it operations with zero emissions to the environment (Emirates 2014).

Emirates airlines aim on fulfilling the customer’s needs at all time in an agile manner. It intends on using and updating its equipment with the latest technology available, such as the use of coating technology that adjusts the temperature to in-flight freight in transferring pharmaceutical or fragile products (Nataraja & Al‐Aali 1991). Mercator technology is another feature offered at emirates airline to manage all the cargo operations and the passenger’s needs as well. In addition, over 200,000 travelers were able to connect with their families and friends while flying through the use of the free Wi-Fi offered onboard (Emirates 2014). 10MBs of free data offered was enough to allow the passengers to send and receive emails, tweet posts, blogs and browse the internet (Emirates 2014).

The complicated part of estimating ROI on marketing is determining what exactly constitutes the return and the actual investment of the company. The components for calculating marketing ROI can be different for each organization, but with solid ROI calculations, you can focus on campaigns that deliver the greatest return.

There are four common objectives that companies seek to accomplish through corporate sponsorship.
These objectives are
to increase awareness,
to enhance product or brand image
to increase media exposure
to increase sales

The value of any sponsorship benefit is dependent on the particular commercial objectives of each individual sponsor (Cobbs, 2011).
Based on the objective of each of the sponsorships a sponsorship measurement tool can be chosen
Emirates airlines can estimate its ROI by the increase in the number of passengers to the destinations where it has sponsored events’

Emirates, being a world renowned gulf carrier, faces tough competition from Qatar Airways and Etihad airlines. Etihad, a relatively new addition to the airline business, also evolves from the UAE. Both the airline companies are sponsors to football clubs and both companies use prolific advertising strategies to market themselves (Aviation Analysis 2014).
In the airline business connectivity is a key competitive aspect, towards which Emirates has placed great emphasis and is emerging on that frontier by announcing flights to more number of destinations with increased frequencies. Globally, the European Airline industry is a dynamic and ever evolving sector. Lufthansa Airlines, the largest airline in Europe, is Emirates Airlines strongest competitor. Emirates operates to fewer destinations as compared to Lufthansa, however, its profits are five times higher than Lufthansa. Emirates also possess a very modern and vast fleet of aircrafts, something Lufthansa misses out on (Aviation Analysis 2014).
Despite competition, Emirates follows an innovative strategy to respond to markets and invest by being sponsors of famous events hence promoting their brand worldwide. It is also known for its luxurious in-flight services and its consistent profitable growth (Safi, AJ 2011).

Operating in the Middle East has been an advantage for Emirates Airlines due to the growth of travel, aviation and tourism in the region. Emirates have been able to adapt and catch up with the new ideas and challenges from their experience in the international environment. Leaving behind old traditions, Emirates clung on to the practice of understanding their customers’ needs and focus on their safety and entertainment (Safi, AJ 2011).
When the recession hit Dubai, Emirates was not much affected and had sufficient finances to support their growth program. They also created a new financial instrument which was recognized by an industry award and caused excitement in the aviation and financial sectors. The firm did not compromise on their standards until the economy recovered, instead challenging to improve their products with ideas of their own (Safi, AJ 2011).
Emirates is the first airline in the world to introduce the Smart-Landing and Smart-Runway safety solutions focusing at minimizing the risks of runway errors. Thus utilizing advanced technology, emirates focuses on customer safety and through increasing their network, frequencies and standards they add more value to the experience (Safi, AJ 2011).

35% of the current market share on the route from India to Britain is owned by Emirates.
Emirates has managed to take over 20% of the Airline traffic revenue to Germany.
Emirates has demonstrated leadership in the South African network, capturing 70% of the market share.
In their attempt to cover America, 31% of the share to New York, belongs to Emirates.

Emirates continued with its growth plan and the financial year 2012-13 has seen the largest increase in capacity in the airline’s history with the addition of the 34 wide-body aircraft to its fleet. Emirates launched 10 new destinations across six continents, shipped more than 2 million tons of cargo for the first time and carried an additional 5.4 million passengers, the highest increase in a financial year, despite the challenges faced by the aviation industry in an uncertain global economic environment. (Emirates Airlines 2013)
Emirates Profits seemed to have increased substantially as compared to the previous year. In spite of the pressure over the revenue generating process due to the high fuel prices during the year, Emirates has depicted consistent growth. (Emirates Airlines 2013)
Emirates continued to target a balanced portfolio approach, whilst still taking advantage of market movements, with a long-term view to hedging around half of its interest rate and currency risk exposures and using prudent hedging solutions including swaps and options. Emirates has a dynamic approach to managing fuel price risk based upon a continuous assessment of the market. During the 2012-13 financial year the strategy was to remain un-hedged, reflecting a view that the balance of risk was considered greater to the downside given historically high price levels and the backdrop of global economic uncertainty.  (Emirates Airlines 2013)
Expansions normally lead to an increase in revenue and profits, however, considering the falling fuel prices and as a result the reduction in air fares, the drastic rise in profits due to expansion is not obligatory. The loss due to reduction in fares would be much more than the gain on the reduced expenditure owing to the cheaper oil. Unless Emirates maintains its strategy's and plans effectively for the future, considering all the possible scenarios they will not be able to maintain the consistent profits and results they have shown over the years.

At Dubai International airport and aircraft lands or takes off every 70 seconds, 24 hours a day, seven days a week. That equates to an average of 1,100 aircraft movements per day, and dnata handles each of them.
This year, dnata handled 125,000 bags a day for Emirates alone and that number continues to grow.
By 2017, Emirates expects to handle upwards of 100 million bags a year at Dubai International airport. focus on operational efficiency and use of the latest equipment to reduce environment footprint.
Emirates has replaced diesel-powered equipment at Terminal 2 where possible, including 15 of the tractors used to pull cargo-trolleys, with electric-powered equipment, marking a big step towards a zero-emissions operation. (Emirates, 2013)

Emirates joins Boeing in Seattle to celebrate the unveiling of its 1,000th 777. The landmark aircraft becomes the 102nd to join Emirates’ Boeing 777 fleet.
Dnata acquires a majority stake in Travel Republic, the largest privately owned online travel agency in the UK.
Marhaba celebrates its 20th anniversary and unveils new look.
In tennis, Emirates becomes the Official Airline of the US Open and title sponsor of the Emirates Airline US Open Series.
Emirates becomes the Team Sponsor of cricket’s Indian Premier League side Deccan Chargers.
Emirates places the largest single order in Boeing’s history - 50 777-300 ER aircraft, worth $18 billion in list price. The order also included 20 777-300 ER options valued at US$ 8 billion.
The Emirates Group posts a record profit of AED 5.9 billion (US$1.6bn) for the financial year
Basra, Geneva, Copenhagen, St Petersburg and Baghdad are added to the Emirates network, while a cargo-only service is launched to Erbil.
Shanghai, Johannesburg, Munich and Rome are added to Emirates’ A380 network.
Emirates becomes the Partner and Official Airline of Real Madrid.

Emirates celebrates its 25th anniversary.
The Emirates Group posts an increased profit of AED 4.2 billion (US$1.1bn) for the financial year ending 31 March 2010.
Emirates is part of celebrations in South Africa an Official Partner of the FIFA World Cup.
dnata acquires Mercator Asia in Thailand, its first overseas IT subsidiary.
dnata ground handling welcomes the first commercial flight to land at the new Dubai World Central – Al Maktoum International.
dnata officially opens its ‘baggage hub control centre’ across all three terminals at Dubai International Airport.
dnata becomes the 4th largest catering provider worldwide by acquiring Alpha Flight Group Ltd.
dnata acquires two of the UK’s leading ground-handling operations at London Heathrow Airport and Manchester Airport.
dnata opens Afghanistan’s first internationally recognised one stop travel shop in the country’s capital, Kabul
Emirates becomes the world’s largest operator of Boeing 777s with the delivery of its 78th B777 aircraft.
dnata marks its 50th anniversary at the Dubai Airshow.
The largest ever Emirates’ TV advertising campaign to date – “Meet Dubai” – airs around the world.

Emirates makes a $2 billion order for 16 Airbus A330-200s.
Passenger figures top three million and the cargo haul hits 150,000 tonnes.
Emirates takes delivery of six Boeing 777-200s, giving it new long-haul capabilities.
Emirates becomes title sponsor of the world’s richest horse racing event - the Dubai World Cup.
As the airline celebrates its 10th birthday, it has a fleet flying to 34 locations in the Middle East, Far East and Europe.
Emirates enters the African market, with flights into Johannesburg, Nairobi and Kenya.
Sheikh Ahmed’s aim for more Emiratis to forge careers with Emirates starts to take shape as the first pilots graduate from Emirates’ training programme.
Emirates Flight Training Centre opens.
Emirates is the first airline to equip an Airbus fleet with an on-flight fax facility.
Emirates becomes the first airline to introduce telecommunications on an Airbus – in all three classes.

Emirates bucks the industry trend and continues to expand despite the Iraqi invasion of Kuwait and adds Manchester to its schedule.
Flights are added to Singapore, Manila and Bangkok.
Damascus is added to the Emirates route network
Deals are struck to fly into London’s Gatwick Airport, as well as Istanbul, Frankfurt and Male, the capital of the Maldives.
On July 3, A6-EKA flies from to Toulouse to Dubai as Emirates takes delivery of its first bought aircraft.
The Airbus A310-304 is designed to Emirates specifications, giving the airline the opportunity to fully implement its commitment to offering a superior flying experience than its rivals.
The network grows with traffic rights acquired into Amman, Colombo, Cairo and Dhaka.
Investment in infrastructure and expansion costs see Emirates posting losses for what would be the only time in its history.

Embarks on ambitious mission to launch an airline with $10 million in five months.
Pakistan International Airlines agrees to wet-lease Emirates two aircraft.
Deals are struck to fly into Karachi, New Delhi and Bombay.
On October 25 Flight EK600 departs Dubai International for Karachi.
10-man team which produces a business plan for the new airline – to be named either Dubai Airlines or Emirates airline.
Sheikh Mohammed opts for Emirates and the decision is made to build the airline on top of dnata, which was already the sales agent for 25 airlines.
Sheikh Rashid bin Saeed Al Maktoum opens the airport and implements innovative open-skies policy.
dnata is established by the Dubai Government with just five staff to provide ground handling services at the new Dubai International Airport.

Target customers:
Emirates airlines has targeted new customers through a campaign. Emirates launched a new global brand platform and direction, themed "Hello Tomorrow,” which positions the global airline as the enabler of global connectivity and meaningful experiences.
Emirates is embarking on an integrated marketing communications campaign with a new brand promise as the company continues its evolution from a travel brand to a global lifestyle brand.
 Designed for the age of consumer engagement and empowerment, “Hello Tomorrow” is about inspiring people to greet tomorrow’s unlimited potential, now. “Hello” is a greeting, an invitation to a person, a place or an experience.
“Tomorrow” is a time, a place, a state of mind – the unlimited possibility of the future.  Emirates is extending an invitation to try the unfamiliar, create new ideas, and form new visions.
The theme encapsulates life’s potential and embracing the future with all the possibilities it holds.

Strategy issues:
Emirates Airlines implements A focused differentiation strategy emphasizing on key areas including quality, innovation, service, and product development.
Environmental Problems also pose challenges, most notably the carbon footprint in the UAE.
This Will have environmental hazards in the future that may require more expense in the future to mend.
With Emirates Airlines This poses a problem, if countries have tension against one another, flight destinations will be reduced because restrictions of travel will be put into place; less travel destinations means less potential customers.
Dubai’s economy reliance on business that thrive on selling services and environmental problems that would cost the country more in the long run.
Politically, the region needs to be stabilized so that economic growth would stabilize as well.

Interesting Emirates Facts:
Each day, Emirates connects over 122,000 people and 6,000 tonnes of cargo with one of the 142 destinations we serve. In 80 countries on six continents, our team of over 52,000 people from 162 nationalities.
24 new aircraft joined Emirates’ fleet, adding a record 5.9 billion ATKMs – the largest capacity increase in Emirates’ history in a single year.
11m calls from customers in 45 countries were handled by Emirates’ contact centre team in 18 languages.
At US$5.5 billion, Emirates is the world’s Most Valuable Airline Brand for the third consecutive year
Over 20% of employees have been with the company for 10 years or more, and 5% for over 20 years, testament to Emirates’ excellence as an employer.
41m meals were uplifted by dnata in 2013-14, a sharp increase of 44% due to the consolidated operation in Italy as well as growth in the UK and Australian markets.
Handling 250 airlines at 27airportsin 9 countries, dnata is also the world’s largest ground handler of the Airbus A380.

St Petersburg
Providing a premium flying experience that caters to consumers’ esteem desires.
The differentiated strategy was initiated by Emirates but adopted by major competitors over time.
Emirates adopted a new CRM system that gave an edge to the company over rivals.
This new personalized system provides a new level of flying experience that boosts customer loyalty.

Net income growth of 32.7% during 2012-2013.
Revenue increase of $2714 Million during the same period.
Higher ratio of luxury amenities compared to previous years.
120 destinations serviced by 190 aircrafts and approximately 200 on order.
Self assurance in the company’s abilities thus avoiding all of the big 3 Alliances.

Growth of the Airline
Current Product Strategy
Analysts predict growth rates of 9%-13% till 2016.
Dubai’s successful bid of hosting Expo2020 will ensure a host of advancement of its main hub.
Recent contracts with African carriers shows the company’s aim to expand there.
Aircraft deliveries in the near future will confirm conformance to latest technological standards.
Expansion to secondary cities and graduating to wider body jets for primary cities.
Proper planning will warrant reduction in excess capacity, as witnessed already.

Projected Progress
Recent decline in fuel prices show an improvement in economic trends.
European counterparts constantly argue Government support that favors Emirates.
Inflation trends in the Middle East show an inclination to be more stable over time.
Employee turnover is low among the ground staff group and comparatively higher among the flying crew.
High capital spending towards aircraft purchases shows an inclined estimated growth and also following write off expenses.

Macro Environmental Analysis
Emirates’ Loyalty program has helped be the constant go-to airline for regular travellers/
Code sharing agreements helped permeate certain markets that may now graduate to Emirates’ own entry into those markets.
Globalization trends have shot up passenger traffic that is the basis of increasing revenue.
Adoption of seasonal pricing as well as floatation pricing contributes to a more active approach.

Micro Environmental Analysis

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Emirates Airlines . (2013). Annual Report 2013. Dubai: Emirates Airlines .
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