Strategy

Abu Dhabi WomenÐŽ¦s College

E-Business Management

Strategic Management at Emirates Airlines

Submitted for: Iman Finaish

1 Abstract

This conducted report discusses a strategic study about the global airline industry, particularly Emirates Airlines. The first part of the report provides a brief overview about Emirates Airlines Company followed by a situation analysis that includes the internal and external analysis. The last section will be concluded with the current situation along with suggesting major issues that Emirates Airlines should address.

2 Table of Content

3 INTRODUCTION 4

4 EXTERNAL ENVIRONMENT 5

4.1 INDUSTRY ANALYSIS 5

4.1.1 Airline industry General Profile 5

4.1.2 Life Cycle 6

4.1.3 PorterÐŽ¦s 5 Forces 7

4.1.4 Key Competitors 9

4.1.5 Key Success Factors 10

4.1.6 PEST Analysis 11

4.1.7 Summary of External Environment 13

5 INTERNAL ENVIRONMENT 14

5.1 SWOT ANALYSIS 14

5.2 SUMMARY OF INTERNAL ENVIRONMENT 16

6 CONCLUSION AND RECOMMENDATION 17

7 REFERENCES 20

3 Introduction

ÐŽ§Emirates Airlines goals for the immediate future and long term are, to be the best in every venture it undertakes; to meet its customers' expectations profitably, to contribute to the success of Dubai Inc., and to make the city the new global aviation hub for the 21st century.ЎЁ

Emirates Chairman, Sheikh Ahmed Al Maktoom

In 1985 Emirates Airlines was established by Dubai Government with just two aircrafts. Today Emirates has 83 aircrafts files to 78 destinations in 55 countries worldwide. It has a large number of cabin crews from 95 nationalities. It recently made an aircraft orders worth more than $ 26 billion for 45 Airbus A380, which makes the company the worldÐŽ¦s largest purchaser of AirbusÐŽ¦s super-jumbo. (About Emirates)

Emirates Airlines recently becomes one of the fastest growing airlines and the fifth-most-profitable airline in the world. It has been growing by more than 20% a year since the last 17 years making a profit of $637 million in 2004-05. (BBC News)

Emirates Airlines is committed to achieve its mission, namely ÐŽ§offering consistently high-quality value-for-money service and to be the best airline on all of its routesЎЁ. Accordingly, it is known as an innovative and customer-oriented provider of advanced services, such as offering personal entertainment system in all classes, 18 TV channels, 22 audio channels and online booking service which enables customers to book, search for flights and choose seats. (About Emirates)

Because of that excellence, it gained over 280 international awards, such as the prestigious CAPA airline of the year award 2005 by the Centre for Asia Pacific Aviation.

(Internet travel news)

4 External Environment

4.1 Industry Analysis

The aim of the industry analysis is to identify the external environment that affects the airline industry. The first part gives an idea about the airline industry profile.

4.1.1 Airline industry General Profile

Airline industry is one of the most competitive and growing industries in the world as it leads to economic growth, world trade, international investment and tourism. In the last decade, it has grown strongly by 7% per year for both business and leisure purposes. (Airline Industry)

Airline industry is considered as one of the fastest expanding sectors of the world with growth rates 2.4 times above the GDP rates on average. It is also predicted to grow by an average of 5 % a year from 2000 to 2010 (IATA).

Airline industry is affected by the economical growth, trade and political factors. As an example of the political factors, the 11th September attacks dropped the number of passengers, because people were afraid and tend to avoid studying and visiting countries that have been attacked by terrorism. As an economical factor, the increase in oil prices destroyed the profitability of the global airline industry, accordingly it losses around $6 billion in 2005 (IATA).

Due to the unstable political and economical situation, many airlines companies started to modify their strategies and services to survive and succeed in the airline industry. For example, many companies invested heavily in the quality of services they provide by offering, e-booking system, new interactive entertainment systems, more comfortable seats, low cost carriers and many technological techniques. All of that was introduced to attract, return customers and gain a competitive advantage.

As being in such a competitive market, many companies started setting agreements among each other to reduce costs and share resource which is called as alliance.

Overall, the airline industry will recover as the number of passengers seems to be doubled by 2010 to exceed 2.3 billion due to the tourism, trade and economic development (IATA).Thus, Successful airlines will be those that continue reducing their costs and improving their services by differentiating from competitors to secure a strong position in the aviation market.

4.1.2 Life Cycle

The airline industry is in the maturity stage, therefore there is a strong