Emirates was founded over thirty years ago and grew to become the third largest global airline in the world. In 1985, the Dubai national government established the Airline with just two airplanes. They leased Boeing 737 and Airbus 300 B4 from Pakistan International Airlines and started flying out of Dubai with just a few routs.
In 1980’s the Middle East was predominantly dominated by Gulf Air. There was a regional carrier at that time which was being supported by different States like Bahrain, Oman, Qatar and the emirates of Abu Dhabi. The European carriers dominated the region whereas, the market was really small and Gulf Air had a decent market share and following in the Middle East. The leader of Dubai felt that they needed a new airline when Dubai faced some troubles and allegations by Air Service in 1985. The experience of having a local airline was very minimal because it required a source for increasing the aid in services due to low experience.
During the mid 80's, Gulf Air started to cut back on its flights to Dubai because they were concerned that they were providing feeder flights for other companies. Thus Emirates was conceived in March 1985 with a huge backing of the Dubai's royal family. And within the first nine months Emirates started making a profit. During their first year they carried over 260,000 passengers with over 10,000 tons of freight and luggage. Within their first decade Emirates started making record strong growths averaging at over 30%.
Once the early 90's had hit Emirates was one of the fastest growing airlines in the world, with revenue reaching over $100 million a year, and almost $500 million by 1993. This was also because of the Gulf War, a lot of airlines would refuse to go into certain areas of the world thus Emirates swoop in and take the business. They were also the only airline to fly the last ten days of the war.
Emirates is now known for its exceptional services globally. Emirates is also famously known for having employees from different nationalities that know various languages, to help aid and serve the customers as best as possible. There were about 20+ routes added in the years 2012 and 2013. The number of growth was expected to grow by 18% in the year 2013. It was only made possible by the deliveries of some new aircrafts which included the Airbus A380 flying to over 20 destinations. With the increasing of demand in the aviation industry and the customers, Emirates started to cope with these challenges by having the best fleet of aircrafts in the business. Recently Emirates integrated 41 A380s into its already large fleet, with another 99 to be scheduled and included in this huge fleet of Emirates aircrafts in the upcoming years.
Emirates Airlines is one of the fastest growing airlines and is also considered to be the fifth most profitable airline ever in the world. It has been growing at a wicked fast pace and it grew by more than 20% in the last 17 years.
Section Two: Problem Statement
I think that the biggest problem Emirates has is product strategy, The airline product shouldn't be mistaken for the aircraft of other physical items. It is all the services from start to finish that the passengers find useful. The main focus should always be Safety (which should always be the number one priority), being reliable and on time flights, convenience in the airport, seat availability, time for departure/arrival, in flight services, ground and luggage carrier's, ect. These are all part of the "product" that the airline provides. Although Emirates provides exceptional services to all of its customers, these services are usually only obtainable for those with money.
Although the list of amenities goes on forever with a company like Emirates, they don't offer much for the middle class and cost savvy travelers. They uphold this regal notion that they are the best with the vest technology, food, services, and staff. Which may be true on many different levels. But what if they broke into the market with a product with less show and strictly down to business. Without all the extras, just a nice comfortable flight with a good staff. They could open new doors and new flight routs and open endless possibilities not just for themselves but for the customers as well.
Emirates has already built this brand and this name for being an exquisite airline, but they are known to most as "I can't afford that". Yes it's good to be the best of the best and have all the bells and whistles on every flight you fly on, but having a market that only caters to the wealthy will only get you so far. This world is run by the working man, and being able to have a cheaper product on the market to cater to these people will allow Emirates to keep expanding its brand and services, but have a variety of options for people in all price ranges. This will allow the company to grow, have a bigger customer base, and eventually grow to other countries.
Section Three: SWOT Analysis
Strengths:
-Large and strong backing of the Dubai Government
-There is a large hub in Dubai
-Big advantage being close to the oil rich Dubai
-Large 50,000+ employees, creates a strong workforce
-travels to 6 continents with over 190 destinations
- Long history of safe air travels and reliability
-Strong advertising base
-Top global brand
Weaknesses:
-Doesn't cater to middle class and the budget traveler
-Doesn't cater a lot to a lot of U.S. destination
- They rely on higher income groups and corporate/business travelers
-Premium rates fall to accommodate middle class income levels that get taken by lower budget airlines
- They quality in performance from sponsoring soccer and cricket has gone down
-They rely on high tech state of the art services which can be redundant for shorter flight destinations
Opportunities:
-They will resume flights to Tripoli and Libya
-They can invest more into some R&D to find a more fuel efficient way to operate everything
-Bid on sponsorship deals for more major sporting events and teams around the world
-Budget travelers
-Personalized service
-Innovation
Threats:
- High fuel costs
-High operating and staffing costs
-losing more destinations due to not having peace in that country
-stock market so volatile and not consistent
-Their inability to keep up with innovations, or recognize the demand
-Low cost and budget airlines
using the case study provide financial analysis, generate 3 financial ratios and formulas, clearly a visually present your findings. include explanations of your results.
List 3 alternate solutions and 3 benefits or consequences
Conclusion, indicate profit or loss for this investment recommendations
