EMIRATES AIRLINES

Emirates Airlines



Executive Summary

The aviation industry is growing at an amazing pace. It started a few decades ago in the West and has now made its way to the East where the industry is witnessing a high growth. During the past few years, a few airlines from Asia have moved up the ranks to become some of the best airlines in the world. Out of these airlines, Emirates Airlines occupies a predominant position. It has grown substantially over the past few years and is now planning to increase its market share. The hints of their expansions plan can be seen from the fact that they have more than 100 large aircraft on order which are to be delivered by 2017. Each month is gets a few aircraft and used them to increase the number of routes served. The secret of emirates success lies in its business model. Considered the best business model in the aviation industry, there is no doubt that this model has been instrumental in the success of the airline. The focus of this model is to use the hub and spoke model to reduce costs and increase usage of the aircraft and efficiency. It is also uses cheap labour available from Asia in order to minimize the cost of running the airline. Eventually, the business plan will have to be changed in order to accommodate the changes that are taking place in consumer behaviour. This same model will never be successful in the future if it is not developed.

Table of Contents

Executive Summaryii

Introduction1

Aim and Objectives2

Emirates Airline History2

Literature Review4

Business Strategy Model5

Core Components of the Business Model6

Hub and Spoke Model7

Cost of Labour7

Fleet7

Continuous Expansion8

Frequency9

Core Challenges Facing their Business Model9

Threat from Neighbourhood Airlines9

Fleet10

Value Proposition11

Evaluation of Value Proposition11

Emirates Airlines Value Proposition Strategy12

Exploring the Rise of the Airline12

Service Excellence13

Balanced Portfolio13

Improvement in Emirates Profitability14

Emirates Business Model (Network Effects)14

Strategic Business Alliances and Partnerships15

Competitive Strategy15

Exploring Emirates Growth Strategy16

Differentiation Strategy16

Revenue Generation17

The Risks from Emirates Expansion17

Utilization of Appropriate Theoretical Model18

Conclusion19

References21

Emirates Airlines

Introduction

Air travel is ones of the easiest means of commuting long distances in short periods of time. It facilitates trade, economic growth, tourism, and investment. It has made an essential place for itself in the globalization process. Growing at a rate of 7% per year in the last decade, it serves various purposes of travelling like leisure, and business. Although one of the most expensive means of travel, large planes like the Airbus A380, Boeing 747, and 777 have helped to reduce the cost of travelling long distances by carrying more than 400 passengers (www.planespotters.net, n.a).

Over the past few decades, this industry boomed in the West where airlines like Lufthansa, Air France, British Airways, KLM, and other airlines grew and captured a major portion of passengers worldwide. Until recently, the growth in the West has stabilized and the East witnessing the highest rate of growth. While the West focused on point-to-point travel, airlines in the East focused on the hub and spoke model, while helped reduce costs and increase demand. The low cost of labour also helped to reduce ...