| Introduction | | | | other areas to turn to. (Directory, 2007) |
| Emirates Airline is one of the most reputable Airline | | | | Additionally, Emirates is rather conservative about the |
| companies in the Asian continent and also in the | | | | issue of Labour Unions. This could be the reason why |
| world over. The Company has been in the business | | | | the company has shied away from diversifying its |
| for the past twenty three years. Emirates Airline is | | | | Airline operations. The Company seems to fear high |
| owned by Dubai's government; where Dubai is one | | | | labour costs and this is coming in the way of its |
| of the seven cities found within the United Arab | | | | improvements. The Company needs to disregard |
| Emirates. Thus company flies to ninety destinations | | | | some of the labour cost that come with expansion |
| found throughout the world and manages to reach | | | | because these costs will simply be offset by the |
| about sixty different countries in the world. Dubai is | | | | higher rate of returns that will be achieved by the |
| the capital city of the United Arab Emirates (UAE) | | | | company after the passage of time. |
| and is one of the fastest growing cities in the Middle | | | | Opportunities |
| Eastern region. (Butler & Keller, 2000) | | | | Carriers within the Middle Eastern region are growing |
| External changes that have affected Emirates Airline | | | | rapidly. The Asian Pacific region has an association for |
| between 1997 & 2007 | | | | its airline companies. During the year 2006, the |
| The external changes will be examined through | | | | association registered an overall increase in passenger |
| PESTLE analysis. | | | | traffic of about twenty three percent. It was also |
| Political | | | | found that in the year 2004, the overall traffic in the |
| Emirates Airline has been very fortunate during the | | | | region grew by a whooping twenty four percent. |
| 2000s and beyond. The political scene in the region | | | | The figures were deduced by the differences |
| has been quite favourable because most of the | | | | between passenger kilometres and seat kilometres |
| countries in the Asian Pacific have been making | | | | that were available. |
| agreements that facilitate better trade between | | | | China (which is one of the most thriving economies in |
| countries especially in relation to the aviation sector. | | | | the region) provides the highest potential for growth |
| These countries have signed agreements between | | | | and profits. The Asian Pacific Region found that |
| themselves and also with other countries in the | | | | traffic to and from this country had reached a |
| United States and also in the European continent. | | | | whooping fifty one percent. Such positive figures |
| These agreements have opened up Emirates to the | | | | indicate that there is a huge airline market in China |
| world and have provided ready made markets for | | | | and that the Emirates Airline needs to expand some |
| the Airline Company. | | | | of its operations to this country. It is also crucial from |
| Any aviation company must be ready to tackle high | | | | this company to understand that it can boost its |
| fuel costs and Emirates is no exception,. In the year | | | | performance in that country by making their services |
| 2005, the country reported an increase in fuel | | | | even better or by marketing themselves aggressively |
| expenditure of seven percent from the previous | | | | within China. (Tayeh, 2006) |
| year. Fuel costs represent the highest form of | | | | Threats |
| expenditure in the company as this has really eaten | | | | Overall air transport within the Asian Pacific region |
| into their profits. | | | | has improved. While this can be seen as an |
| Economic | | | | opportunity for attracting more clients to the region, |
| The Asian Pacific region and in particular the United | | | | it can also be seen as a threat. The positive growth |
| Arab Emirates, has been nurturing its economy at a | | | | means that more and more Airlines are improving |
| rapid pace. Most of the countries located there are | | | | their positions within the industry. It is very likely that |
| becoming more mature. These economies are | | | | Emirates will be facing stiff competition within the |
| growing at a substantial rate consequently affecting | | | | market. It is a known fact that beyond the 2000s, |
| their overall income. This means that most of them | | | | Emirates has been dominating market shares in the |
| are earning more revenue per capita and they can | | | | Middle and Far East. However, this position may soon |
| therefore afford to use air transport. This is probably | | | | be toppled if the company relaxes. |
| the reason why Emirates Airline has been steadily | | | | Additionally, Emirates Airline has to deal with an |
| growing over the past few years. Markets are | | | | increase number of competitors in Dubai and its |
| changing rapidly and more governments in the region | | | | environs. This is because they have realised how |
| are streamlining their economic policies so as to suite | | | | profitable the route. Such competition could |
| the Airline industry. (Tayeh, 2006) | | | | potentially lead to diminished business. However, this |
| Airline traffic in the rest of the world has reduced | | | | has not been the case for the company. Emirates |
| drastically. However, the Middle Eastern region has | | | | have adopted a competitive strategy. The company |
| improved especially for Emirates. Emirates success is | | | | believes that it is quite possible to still soar above the |
| directly linked to the City's success-Dubai. Dubai is | | | | rest even when there are other players in the |
| one of the most rapidly growing cities in the world. It | | | | market. Emirates encourage more competition |
| represents a lot of potential for investment both in | | | | because this means that overall standards in the |
| the tourism industry and also in the business world. | | | | industry will increase and there will be greater |
| First of all, there are so many projects that re | | | | acknowledgment of good performers within the |
| coming up with time. First of all, the City is building a | | | | industry. |
| theme park that resembles Disney world; it has | | | | Impact of stakeholder pressure on strategies |
| embarked on a project that will house over four | | | | Most airline companies are particularly fond of |
| hundred thousand residents through a waterfront | | | | mergers and acquisitions. It is indeed a global trend, |
| project. As if this is not enough, there are plenty of | | | | for companies to form alliances. However, Emirates |
| businesses that are always coming up all the time. | | | | shareholders and management believe that alliances |
| Real estate is one particularly interesting sector | | | | are not an appropriate strategy to adopt for the |
| because it attracts lots of capital investment. All | | | | company. They have asserted that Emirates needs |
| these business ventures are encouraging more | | | | to establish some sort of trend in this area. The |
| visitors to the City and the country in general; this | | | | Company needs to remain independent and mergers |
| has been reflected in the overwhelming market for | | | | will com in the way of such a strategy. More so, |
| Emirates. | | | | Emirates' main business principle is flexibility. They |
| As if this is not enough Emirates Airline is located at a | | | | believe that they should always have the ability to |
| very suitable region in Asia, it is in the middle of the | | | | change their approaches depending on the external |
| Eastern and Western regions. Consequently, the | | | | and internal circumstances. Consequently, making an |
| Airline is capable of tapping resources from both | | | | alliance would come in the way of such a strategy. |
| sides. The Asian continent has a booming economy | | | | One can therefore conclude that shareholders have |
| and Emirates Airline has really benefited from this. | | | | greatly affected the way the business conducts itself |
| Social | | | | in the global arena. (Doganis, 2001) |
| Emirates Airlines operates in a region where there are | | | | Emirates decided to adopt a strategy of free |
| numerous employees and workers. Most of these | | | | competition because of mounting pressure from key |
| workers rarely demand for high compensation. When | | | | persons within the company. These key persons |
| the United Arab Emirates is compared to other | | | | asserted that following the trends used by other |
| countries such as the United States, it can be found | | | | companies in the airline industry would make Emirates |
| that there is a significant difference in labour costs as | | | | seem like a company that is simply trying to survive |
| the latter country uses up thirty eight percent of its | | | | the increasing competition within the field. It would |
| operating expenses while the UAE only uses up eight | | | | make them look like a company that has its own |
| percent of its operating costs to pay its workers. | | | | survival at heart and not the needs of the |
| Consequently, the Airline has made a lot of profits | | | | customers. The Company is built upon the premise |
| due to those differences. (Morrison and Winston, | | | | that the customer comes first. This is the driving |
| 1997) | | | | force behind the company strategy. Additionally, the |
| Labour issues are adversely affecting employers in | | | | reason behind the company's financial success is the |
| the region and also in the rest of the world. Workers | | | | fact that the company is not linked to other business |
| are becoming increasingly ware of their potential and | | | | interests. Consequently, stakeholder pressure has |
| most of them are demanding more. Many Airline | | | | affected the company positively because it has |
| Companies are increasingly recruiting different types | | | | yielded encouraging results. |
| of labourers. This is especially with regard to the fact | | | | The government of the United Arab Emirates is a |
| that there are numerous types of Aircrafts in any | | | | key stakeholder in the operations of the Company |
| one type of Airline. For instance, an Airline Company | | | | because they are part owners of the Company. |
| may have regional jets, four engine planes, wide | | | | They have created a lot of pressure in the manner in |
| body and narrow body aircrafts. Such kinds of | | | | which the airline conducts its operations. It has |
| aircrafts are operated by different types of pilots | | | | created a liberal market in the Far East in order to |
| and engineers. These workers all belong to different | | | | enable the Airline operate in liberal markets. This is |
| worker's unions and all of them may require special | | | | especially in contrast to some of the strategies that |
| attention by the human resource department. | | | | other stakeholders in the Middle Eastern region have |
| Payment schedules may also be difficult to maintain if | | | | adopted. Airline companies in such areas have no idea |
| some of these workers operate in stable economies. | | | | what it means to compete in the aviation sector. |
| Emirates Airlines has also been affected by this | | | | (George, 1982) |
| problem but not to a large extent. Emirates Airlines | | | | Coping and encouraging competitiveness is a key |
| has not bought too many varieties of Aircrafts. | | | | element in the Company's strategy (this is called the |
| Consequently, there is room for the Company to | | | | Open Skies strategy) and this can be highlighted in |
| grow and without having to spend too much in the | | | | the way the company conducts its businesses. For |
| labour section. | | | | example, Emirates shares its Dubai airports with one |
| Technological | | | | hundred other Airlines. This would have been ordinary |
| The world had a technology boom in the nineties. | | | | if the foreign companies were operating in regions |
| However, there was a technology but in the decade | | | | outside the Asian Pacific region. However, it has been |
| 2000. Companies that were using technology to gain | | | | found that they actually target one hundred and fifty |
| competitive advantage over their players in the | | | | destinations in the region. Additionally, surveys |
| industry may now have to look for other sources of | | | | conducted in Emirates' main hub found that fifty |
| competitive advantage. | | | | percent of their passengers belonged to other |
| Additionally, Airline companies have to deal with the | | | | Airlines. This is in huge contrast to what goes on in |
| advent of better informed clients. Most people are | | | | other regions of the world. For instance, in the United |
| now more knowledgeable about the reputable | | | | Kingdom, it may be possible to find that one Airport |
| companies. They can get all the strengths and | | | | is filled up with passengers who belong to one airport. |
| weaknesses about a given firm using the internet. For | | | | This means that Emirates is acting as a leader in this |
| instance, clients tend to shy away from airlines with | | | | arena if it has managed to achieve what some |
| numerous stopovers in comparison to those ones | | | | seemingly ‘sophisticated markets' have not |
| that have direct routes. These are al issues that can | | | | achieved in the market today. |
| be checked out at the ‘touch of a button'. | | | | Evaluation of future strategies |
| Emirates Airlines has been affected by this issue | | | | It is possible that Emirates Airline will expand its |
| because it needs to ascertain that it offers better | | | | operations into other non – Asian countries/. This |
| services to its clients and that it can meet future | | | | means that there will be greater need for the |
| demand. (Tayeh, 2006) | | | | company to take up some of the global trends. For |
| Legal | | | | instance, they may increase their flights to the United |
| It should be noted that in the past, most | | | | States. Consequently, the company will have to |
| governments within the Asian Pacific used to operate | | | | adopt some of the approaches that air carriers in |
| under a paternal government policy. Governments | | | | those regions use. While creativity has been an |
| felt that thy had to protect airlines against external | | | | essential part of Emirates operations, it may be |
| factors, but after the recent policy changes, Airline | | | | necessary to re-channel some of these creative |
| industries have now been opened up to competition | | | | efforts in the field of technology. (Doganis, 2002) |
| and this is the reason why air carriers like Emirates | | | | Some of the Airline carriers in the US are constantly |
| have grown. They can now follow the rules of | | | | coming up with new ways to increase customer |
| economics to sustain competitive advantage instead | | | | satisfaction through technology. For instance, online |
| of worrying about government hindrances. This | | | | booking may have to take greater precedence that |
| means that there are less legal hitches when running | | | | it does currently. It may also be necessary to |
| operation in the region. | | | | improve customer care in the luggage section |
| Environmental | | | | through employment of better technologies in |
| It is a known fact that Airline Companies need to | | | | keeping customer's luggage. The Company may also |
| adopt strategies that provide them with a good | | | | have to employ these same technologies in the |
| corporate image. For instance, some Airlines may | | | | security problems. Most US air passengers were quite |
| decide to take part in environmental sustainability | | | | shaken up after the September eleventh attacks. |
| projects such as tree planting. Additionally, some | | | | Consequently, security is a crucial part in the US |
| companies may also exercise extra caution in terms | | | | aviation industry. Passengers are demanding greater |
| of the quantity of waste that they send to the | | | | levels of security through surveillance cameras and |
| landfill. This is something that seems to be taking a | | | | the like. These are all issues that Emirates will have to |
| lot of attention from Airline companies. Lastly, the | | | | incorporate once it becomes more global. |
| issue of recycling is also taking up a lot of | | | | In the future, Emirates may not be able to access |
| precedence in the Airline industry. Some Companies | | | | certain markets because of its ‘open skies' |
| are offering recyclable cutlery to their clients in order | | | | strategy. This strategy requires that the Company |
| to further this campaign. All in all, it should be noted | | | | remained independent of others and hence the |
| that most environmental campaigns in the Airline | | | | reason why the company has stayed away form, |
| industry are part of the corporate responsibility | | | | alliances. Presently, the Company has met some stiff |
| strategy within a specific Airline Company. (Directory, | | | | resistance from certain countries such as Australia. |
| 2007) | | | | Consequently, Emirates has been prevented from |
| Critical evaluation of the strategies used by the Airline | | | | accessing such markets. In the future, it is likely that |
| between 2002 & 2007 | | | | Emirates may be forced to relax this policy of |
| Strength | | | | staying away from alliances. It may decide to |
| The company has adopted a very unique business | | | | maintain such a strategy in most markets but in the |
| model. It thrives upon flexibility and espousal to | | | | event that it meets too much resistance from certain |
| existing external environments. The company's | | | | countries, it may be necessary to bend some of its |
| management is quite creative and is always looking | | | | rules. (Smith, 2002) |
| for ways of coping with their current situation. This is | | | | It is also likely that Emirates Airline will consider |
| the reason why the Airline has been able to tackle | | | | expansion strategies as one of the most viable |
| some of the global economic problems that have | | | | options for the Company in the future. This means |
| attacked the aviation industry. | | | | that the Company will need to come up with |
| The Company has won a number of awards | | | | Company representatives in those regions. |
| between the years 2003 and 2007 from the World | | | | Emirates Airlines will have to accommodate greater |
| Airline Entertainment Association. The Company was | | | | varieties of employees and this means that the |
| given the World Airline Entertainment Association | | | | Company will need to leave out a substantial portions |
| Award for the third year running. Emirates Company | | | | of its annual budget to meet this greater increase. |
| has been quite effective at including technology in its | | | | However, this is not a totally bad idea for the |
| customer care. The Company had an in-flight | | | | Company because it stands to get a lot of returns |
| entertainment system during the world up in 2005. it | | | | on its investments. |
| was able to give al its passengers access to the | | | | Al in all, the most suitable strategy for Emirates in the |
| matches. Those who may not have been interested | | | | future will be a fit strategy. It has been operating on |
| in watching the entire match were give updates | | | | the stretch strategy but this is mostly appropriate in |
| through their top-of the-range-screen systems. In | | | | the region. Such a strategy may not work in the rest |
| addition to this, the company has gained a wide | | | | of the world. |
| esteem for the inclusion of email services for all its | | | | Conclusion |
| passengers. It also allows live text news for | | | | Emirates Airlines was a started in the year 1985 and |
| customers in their aircrafts. The Company was also | | | | has undergone numerous changes over those two |
| the first to introduce a Digital Widescreen System in | | | | decades. It is now the best Airline in the Asian Pacific |
| 2005. This was something that ha not been included | | | | region with awards for innovation in its in-flight |
| in other Airline Companies of the world. (Morrison and | | | | entertainment systems. The company has also gained |
| Winston, 1997) | | | | a lot of mileage for its Open skies strategy. It |
| Weakness | | | | believes that free market solutions are the best |
| Emirates Airlines is quite reputable in the Asian Pacific | | | | drivers for any Airline Company and this is why the |
| Continent. The company has marketed itself very | | | | company has stayed away from mergers and |
| well in the region and as it can be seen form the able | | | | acquisitions. However, the company needs to |
| below, it is one of the most successful companies in | | | | embrace more global markets and this will force it |
| the region. | | | | top comply with some of the rules in operation within |
| Airline Market Share | | | | those markets. This means that the company will |
| Emirates 39% | | | | have to relax some of it open skies policy. It will also |
| Air India 2% | | | | have to embrace online systems as a sound |
| Gulf Air 8% | | | | marketing tool in the global arena. |
| Qatar Airways 13% | | | | Reference: |
| Sri Lankan Airlines 4% | | | | Butler, G.F., Keller, M.R. (2000): Handbook of Airline |
| Singapore Airlines 26% | | | | Operations. Aviation Week; |
| Thai Airways 8% | | | | McGraw-Hill Companies |
| However, when the company's market share is | | | | Doganis, R. (2002): Flying off Course: The Economics |
| analysed in other regions of the world, such positive | | | | of International Airlines, 3rd edition. Routledge, New |
| and encouraging results may not be seen. Some | | | | York. |
| regions such Australia have not embraced the | | | | Directory: (2007): World Airlines", Flight International, |
| services and benefits that come with using an | | | | 2007-04-03, p. 77. |
| Emirates Airline Aircraft. Emirates Company therefore | | | | Doganis, R. (2001): The Airline Business in the 21st |
| needs to improve its performance in the global | | | | Century. Routledge, New York, |
| market. Most successful companies are those ones | | | | Smith, M. J. (2002): The airline encyclopaedia, |
| that adopt a global dimension and decide to spread | | | | 1909-2000. Scarecrow Press |
| their success to other regions of the world. Over - | | | | Morrison S. and Winston C. (1997): The fare skies: air |
| reliance on one region can bring about economic | | | | transportation and Middle America, Brookings Fall |
| down fall in case the region is faced with a natural or | | | | Tayeh, T. |
| man made disaster and the Airline may not have | | | | |