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The air transport has recently become a very big business. This kind of business gained a massive momentum at around 1919 after the First World War (Hanlon, 2006, p.1). After the First World War, the air transport got a very strong boost due to the prevailing peaceful environment. The industry has also significantly contributed to economic growth. According to Hanlon (2006), air transport supports a grand total of 29 million jobs world wide (p.1). This includes the jobs created directly, indirectly and those induced by the industry.
Over the past, the air transport has enjoyed a high-growth rate compared to other industries. Records show over the past 60 years, the rate of growth in the airline industry has remained above the GDP growth (Hanlon, 2006, p.3). Hanlon further observed that the world passenger traffic grew at an average annual rate of 12 per cent between the year 1945 and 2000.
The Emirate Airlines is one of the dominant companies in the airline industry. The company has managed to enjoy the market power since its establishment. This ability has significantly contributed to the successes of this airline company.
Company History: Emirates Airlines
The Emirates Company is a state owned company which was incorporated in 1985. The Emirates airline is owned by the Dubai government. It is located in one of the busiest airport in the Middle East, a fact that has contributed to its growth. Since its establishment, the company has recorded tremendous success in its operations. The company is involved in transportation services like scheduled passenger air transportation, tour operations, and other airport operations as well as other support activities for transportation (Contact Angel Investors, 2010).
The company has generated employment reducing the impacts of the current level of unemployment.
According to Contact Angel Investors (2010), the company has enjoyed many privileges including its ability to stand alone without subsidies or being a member of a major alliance in order to be able to provide its services to its customers. This independence has helped the company to be one of the most successful airline companies in the world in term of services and returns.
The emergence of the Emirate Airlines was as a result of the Gulf Air cutting its services to Dubai in the early 1980s (Contact Angel Investors, 2010). This raised an urgent need for an air transport provider who can substitute for these services because Dubai had grown significantly as a trading centre. In fact Dubai was the leading trade center in the Middle East by then. It was therefore a very big blow to the investors when the Arabian Gulf cut down its services to Dubai. On the other hand, this became an opportunity to the Emirates Airlines. This was their stepping stone to where the company is recently.
The company also received a boost from the Dubai Royal family which provided two aircrafts at through their Dubai Air Wing.
The company started with a capital $10,000,000. Maurice Flanagan was appointed as the company’s director after its establishment (Contact Angel Investors, 2010). Formerly, Maurice had worked with several airlines including British Airways, Royal Air Force and Gulf Air. This made him a very competitive person for this position.
As a result of prudent management and its inclination to the government of Dubai, the airline has recorded a tremendous growth, an aspect which has maintained the company as the most competitive in the global airline industry.
Missions, goals and objectives
The Emirate airline company is guided by its clearly defined missions. The company’s missions acts as a guidance to the achievement of its goals.
The Emirates Airline’s primary mission is to transform Dubai not merely into a comprehensive long-haul airline hub but also convert the airline into a global commercial and tourist centre (Graham, Papatheodorou and Forsyth, 2010, p.157). Recent results indicate that Dubai has significantly developed in terms of commerce and tourism. These achievements have been fueled by the Emirates Airlines which ensures that there is good services and accessibility among the trading partners. The United Arab Emirates has now defeated Egypt which was the second tourist attraction in the Middle East ranking behind Saudi Arabia.
The company has a number of strategic objectives. The first objective is to harness the full potential of United Arabs Nationals (Emirates Competitiveness Council, 2010). The company is state owned and it is meant to help every member of the country. Every member of the state is subject to benefit from the company.
Another objective of the company is to encourage vibrant and innovative, high-productivity sectors (Emirates Competitiveness Council, 2010). The company supports this objective through its support to the country’s tourism sector. This sector has recorded a significant growth over the recent past which has to a greater extent been facilitated by the Emirates Airlines.
The success of the Emirates Airline has been depended on the company’s emphasis on its strategic planning. The company has clearly defined strategic plans, an aspect that has contributed to the success of these companies. The company insisted on the cost effective strategies which were aimed at reducing the costs while maximizing the profits.
According to Cannegieter (2010, p.1), the company had decided to came up with a strategy of putting in place a new pro-active management teams. This effort was aimed towards the realization of the company’s goals and mission. A company with a high level of competition like the Emirates Airlines would require a competent management team for it to remain as a leader in the entire airline industry. It also requires competent team players to retain the culture of innovation in the company. Innovation requires a critical research about the market as well as the needs of the customers. The reason is that the innovations should always reflect an improvement in the level of customer satisfaction.
Another important strategy which the Emirate Airline has adopted is the incorporation of computers in everyday activities (Cannegieter, 2010, p.1). The company has computerized most of its activities in an effort to increase its efficiency and competence. This is one of the main strategies which many companies have used to reduce operational costs. By embracing technology, the Emirate Airlines has managed to reduce the number of workforce. Some of these activities include the E-marketing, E-commerce as well as other computer related activities. Computers can perform more duties than a man. This strategy has tremendously helped the company in reducing its costs while maximizing its profits.
The Emirate Airline is led by the philosophy of product enhancement (Cannegieter, 2010, p.1). This strategy has enabled the company to maintain high quality services to its customers. The company had been investing a significant amount of money on those activities which are aimed at improving the customer satisfaction. It has also laid down some measures to ensure that the company’s products are never devalued.
As noted earlier, the airline industry has recorded a very high rate of growth over the past years. The industry has also been characterized by a very high competition level among the leading airlines. The Emirates is one of the major participants in this tight competition.
One of the main competitors of the Emirate Airline Company is the Singapore Airlines. The Singapore Airlines offers a very high level of competition on the long-haul routes between Europe and Asia (Graham, Papatheodorou and Forsyth, 2010, p.158). For instance, the busiest pair of cities across which the Emirate Airlines operates Dubai-Singapore and Dubai-London which presented about 11% of the total services in 2005 (Graham, Papatheodorou and Forsyth,2010,p.158).
The organization’s distinctive advantage and external environment
The comparative advantage refers to the position a company stands against its competitors. In most cases, the company’s ability to lead in a competitive market depends on its competitive advantage. The competitive advantage of a company helps it in provision of similar services to customers but at a very lower cost. The comparative advantage therefore increases the profitability of a company.
The emirates airline has a number of attributes which has distinguished the company from others in the airline industry. The company has flourished under the sheikdom’s ‘wide open skies’ policy (Contact Angel Investor, 2010). This is a very big challenge which the Emirate airlines has managed to go through despite of the restrictions placed on the company by other countries.
The Emirates airlines are widely known for its luxurious in-flight services.
Dubai has a very unique political structure. This structure has favored the company in its effort to fulfill its goals. For instance, the company’s operations can be described as both state owned and privately owned. The county’s political structure offers a very conducive environment for the growth of the company.
The company’s profitability level has been rising progressively since its establishment. The company has also managed to conquer the turbulence economic difficulties when other companies in the industry are running at losses.
The maintenance of the free space policy by the Dubai government combine with a high level of employee ethic has as well contributed to the success of the company.
Another advantage that the Emirate Airline enjoys over its competitors is its rate at which it is extending its services. For instance, the company extended its routes to the east covering countries like Bangkok, Singapore and Manila in the year 1990 and more other countries some time later (Contact Angel Investors, 2010). Meanwhile, several Asian countries started using Dubai as a warehousing center for European deliveries. This provided a very important boost to the company as the demand for its services increased tremendously.
It has been noted that Emirate Airline was one of the world’s fastest airline in 1990s (contact angel investors, 2010). According to this source, the company recorded a revenue increase of $100 million a year which increased to around $500 million in 1993. This was a tremendous increase compared to other companies operating this industry. The company then uses these increases in the funds in funding some of its development projects.
Another advantage that the Emirate Airline enjoys above its competitors is the fact that the Gulf War benefited the Emirates by keeping other airlines out of the area (Contact Angel Investors, 2010). Therefore, Emirates was left as the only company which was left operating in the area during the last ten days of the war. This opportunity gave the company an opportunity to build reputation and also to market its reliability. Although the company had to incur an extra cost during this period, the returns exceeded these costs.
The company has managed to retain a high rate of customer growth. By the end of the year 2006, Emirates Airline passenger volume had tremendously increased to over 17.5 million which was double the number of customers the company recorded in 2001 (Graham, Papatheodorou and Forsyth,2010,p.157). In every company, the number of customers is the major determinant of its profitability. The number of customers is directly proportional to the company’s profit margins.
According to Cannegieter (2010, p.1), Emirates Airlines is one of the few airlines, which hardly felt the economic and aviation downturn of the last few years. The company has managed to survive these economic imbalances because of the efforts which the government has put in place. The government has put in place advertisement strategies to promote the tourism industry. The tourist industry presents a significant part of the company’s customers.
Threats facing the organization
Despite of its persistent successes, the Emirate Airlines has been faced with several threats which have posed a stumbling block to the company in its effort to fulfill its goals.
One of the major threats is security. The issue of security has become a major concern in every contemporary airline. The cases of terrorism have risen up significantly threatening the entire industry. For instance, the civil aviation (2009) reported that there had been aircraft bombing threats has increased sharply especially from the frights out of Pakistan. These issues have tampered with the Emirates Airlines in their effort to retain top services to its customers.
According to Hanlon (2006), the airline industry makes a material contribution to the green house emissions and other things affecting climate change. The issue of climate change has become very sensitive due to the rising levels of pollution which has threatened the world. However, the amount of gas emissions released by the airlines is comparatively low compared to other industries.
Innovative strategies to advance to organization’s mission
Innovation is one of the main weapons which the most successful company in the world has used. In a competitive environment, innovation remains important strategy in differentiating a company’s services from the competitors’ services.
The Emirate Airlines has noticed this and has given the first priority to innovation efforts. This strategy has helped to maintain the top position competitiveness of the company. According to Shaw (2007), the notable success of Emirate Airline can be attributed to its tradition of innovation. The company has for long been enjoying the advantages that are linked to innovation. Although these innovations are subject be matched by the company’s competitors, it manages to enjoy the initial benefits of the innovation before its competitors catches up. Furthermore, the company continues to enjoy “First Mover Advantage” after their competitors matches the innovation, a very rare situation (Shaw, 2007, p. 106).
The company was the first airline to install the personal video systems in all the seats of its aircrafts (Contact Angel Investors, 2010). This innovation helped the company in attracting a large number of customers. Other airlines had not realized about the idea. This opportunity offered the Emirate airline a high level of competitiveness.
The Emirate and the Singapore Airlines were the first airlines to acquire Airbus A380. This is an aircraft which has a high carrying capacity and can therefore accommodate a higher number of passengers than the previous aircrafts. The Emirate Airlines effort in continued innovations has enabled the company to offer the top quality services to its customers. The company offers distinguished services to its customers which leaves them with no other alternative than to choose the Emirates Airlines.
Shaw (2007) commented that the employment of competent and motivated staff as well as ensuring that the standards of seating and comfort are up to the standard are the main keys to success (p.107). The company has put this into consideration. A part from retaining talented and experienced workforce in the company, the Emirate Airline has made efforts to provide training to its staff to increase the level of customer satisfaction. In fact the company has opened a training centre where it offers training for its employees as well as their potential employees.
In conclusion, this study has clearly indicated that the Emirate Airlines has really achieved in the airline industry. This success can be attributed to the strategies which the company has applied in its operations. The company has managed to combine various strategies which have made the company’s product to be unique.
Emirates airline combined strategies and the prevailing success factors have propelled it to become a global competitor to reckon with. Social, economic and political factors are favorable for the airline to thrive. The adoption of clear and elaborate strategies to manage the firm and the use of a traditional management style has contributed to the company success. The strategies of the company are in line with the mission of the company of delivering the highest standard of product quality, excellent logistics and customer satisfaction through innovation.
The company’s ability to adopt the modern IT has also contributed to the success of the company. The company’s success can also be attributed to the good political environment. This demonstrates the importance of external environment to the success of any company.
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