Emirates SkyCargo Case Study Pdf 2022

Analysis of the Airlines
Business Performance
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Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
1) Role of air cargo mode in air cargo supply chains..................................................................3
2) Emirates SkyCargo business model and how airline is responding to global air cargo
shippers logistics and supply chain requirements........................................................................4
3) Examine and describe Emirates regional and long-haul passenger and freighter aircraft
networks.......................................................................................................................................5
4) Discuss the role played by dedicated freighter aircraft in the business model........................6
5) Product/service developed and implemented for capturing and delivering value from
participation in global air cargo market.......................................................................................7
6) Annual air cargo traffic volumes and financial importance of air cargo.................................8
7) Factors that influenced Emirates SkyCargo annual air cargo volume and air cargo revenues
.....................................................................................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................11
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INTRODUCTION
Airline industry is regarded as significant contributor in economic development of nation.
This has raised activities of world trade along with easy and fast movement of passengers and
goods and providing million of employment opportunity to people in appropriate manner (Barros
and Wanke, 2015). It is essential for business to analyse market need and demand and work
accordingly for attainment of positive outcomes. The given report is based on Emirates
SkyCargo which is cargo airline that is based in Dubai, United Arab Emirates. It was founded in
1985 which has fleet size of 11 that operates in 45 destinations. The main aim of report is to
cover role of air cargo in supply chains, business model to global air cargo shippers’ logistics as
well as supply chain requirements. It also highlights about role played by freighter aircraft in
business model and products, services offered by it. The annual air cargo traffic volumes and
financial importance are discussed in report.
MAIN BODY
1) Role of air cargo mode in air cargo supply chains
Air cargo is defined as way through which products and services are supplied through air
way which has high security level and decline in damage or theft of shipment (Cao, Lv and
Zhang, 2015). Shipment by air helps to get products at airport in safety manner and control over
it is performed in tight way. In context of Emirates SkyCargo, role of air cargo mode in supply
chains is different. Here, diversification of product and digitisation are regarded as mode of air
cargo in supply chain in order to build e-commerce hub at Middle East.
Diversification- The manager of Emirates SkyCargo has increased product diversification
from past three to four years. This focus on providing right products along with operational
aspects so that timely delivery is achieved in most effective manner. There was 97% of
performance has been done which represents about operational capacity for delivering cargo as
promised to consumers (Emirates SkyCargo looks to diversification and digitisation, 2019).
Emirates SkyCargo has launched shipment quotations which possess practical approach to use
Aircraft on Ground (AOG) spare parts along with making urgent shipments in packed way.
Digitalisation- The main aim of Emirates SkyCargo is to become digitalised for supply
chain so that consumers can get their product and services timely in effective manner. In
digitalisation, they will use air cargo for supplying right products to user in electronic format
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where they can easily track about where products has been reached and at time delivery of
product is performed. This makes supply chain of air cargo easy and simple as it is less time
consuming. People from any part of world can track their good and know about exact date of
delivery.
Therefore, these two plays an effective role at air cargo in supply chains for respective
organisation to make work easy and simple so that goal and objective can be attained in given
time period. Supply chain has mediator which starts from merchants and end with final
consumers. For example, if person want to send any product through air cargo then they have to
approach to merchant and then they go to air cargo after they fly product through air and at
airport carrier receive and send to final consumers.
2) Emirates SkyCargo business model and how airline is responding to global air cargo shippers
logistics and supply chain requirements
It is very important for organisation to make business model for their organisation to
accomplish set goal and objectives in an effective manner (Mallikarjun, 2015). Most of the
business prepare model in advance so that they can carry out operations and functions in most
diligent manner to attain high profits margin. This is defined as plan of company in order to
make profits. It helps in identifying products and services which firm will sell to their target
market and expenses which it has anticipated from budget. The business model followed by
Emirates SkyCargo and responding to global air cargo by airline shipper logistics as well as
supply chain requirements are described below:
Value Proposition- This is defined as what makes organisation different from its
competitors (Min and Joo, 2016). In context of Emirates SkyCargo, value proposition includes
timely delivery, brand value, premium class service and products.
Customer Segment- This is defined as different kinds of customers which includes mass
market, niche market, segment and so on. Emirates SkyCargo has segment and rich class
customer segment due to high prices of products and services.
Distribution Channels- It is defined as channel through which company distribute their
products and services (Niu and et. al., 2016). Emirates SkyCargo uses mobile application, online,
own website to provide goods to their consumers.
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Customer Relationships- Emirates SkyCargo has to maintain customer relationship with
their staff, passenger, employees, merchant, carriers and other so that timely delivery of products
and services are made.
Revenue Streams- It is defined as method through which organisation makes income from
each customer segment (Pearson, Pitfield and Ryley, 2015). Respective can make income
through selling tickets, providing service, air cargo and so on.
Resources- They is regarded as assets to company which are needed to support as well as
sustain business. It can be human, physical, financial and intellectual. Emirates SkyCargo
required resources in terms of flight, staff, payment method and others.
Activities- It is the most important activities which is required in executing value
proposition of company. In context of air cargo, activities include supplying, manufacturing and
so on.
Partners- Emirates SkyCargo has partners such as banks, customers, government and
many more to conduct their business activities and operations in effective manner.
Cost Structure- Emirates SkyCargo has to incur both variable and flexible cost for
business operations.
Air cargo is facing logistics challenges in terms of e-AWB, Security Filing, New mail
requirements and E-commerce Glut (Air cargo faces these four logistics challenges in 2019,
2019). Airline has to respond to air cargo shipper logistics and supply chain management by
following proper procedure to provide people with good and service in given time period through
airplane mode in effective manner for attainment of positive outcomes.
3) Examine and describe Emirates regional and long-haul passenger and freighter aircraft
networks
Emirates have connected to 155 destinations which cover 80 countries in 6 continents. This
is regarded as largest aircraft in world which has connected people from different parts of world.
It has targeted all types of passengers to travel with them. Emirates has regional passengers from
regional Alaska, Jet, Korean Air, Jet and others from Delhi, Kolkata, Karachi, Hyderabad,
Chennai, Ahmadabad and other whereas it has long haul passengers from different places like
Kabul, Dhaka, Singapore, Clark, Bali, Jakartam Phuket and many more (Purkayastha and
Sharma, 2016). It is very important to provide all passengers with required facilities to build their
trust and loyalty in most effective manner for attainment of goal and objectives.
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The longest flight of Emirates is 14,194 km which flies from Dubai to Auckland. It is
longest airbus A380 flight which is non-stop in world. Services are connected at airline’s home
hub to New Zealand city (Richards and et. al., 2019). This route was enrooted in March, 2016
that uses Boeing 777-200LR aircraft. This carry 853 passengers in single class and 644 two
tiered class.
There is vast difference among long haul and short haul flights. Here, long haul will
possess crew sleeping berth as compared to short haul. Long haul carries more number of
passengers at long distance which is lacked by short haul. It is beneficial to carry long haul
flights as it carry different facilities and services such as meal, extra wages and so on that is
beneficial for pilot.
4) Discuss the role played by dedicated freighter aircraft in the business model
Emirates SkyCargo has carried 2.7 million tonnes of cargo as per report published by Emirates
SkyCargo. As there is rise in 1% in tonnage from previous year (Emirates' cargo division
performs well amid dampening demand, 2020). With rise in competition, air
freighter has managed and performed well at marketplace. They have earned revenues of AED
13.1billion which is approx $3.6billion that has increase from 5% over previous year. There is
division of cargo which is approx 14% of airline’s total revenue. Respective organisation has
total freighter which leads to 12 boeing, 777Fs. For holding belly hold capacity, Emirates
SkyCargo has developed new passenger destinations freighter service to Bogota and Erbil.
According to report of Emirates SkyCargo 2018-19, there were tonnes of flowers flood, pharma,
AOG, globally by truck, between DXB and DWC through trucks such as 51714, 257050, 75241,
807, 185951 and 327807 respectively. There were 2039 horses, 1061 luxury cars, 397 charters
for purpose of entertainment & sports event equipments, 7800 domestic animals with help of
Emirates pets (Prince and Simon, 2015). In April, Emirates SkyCargo has developed AOG which
is new airfreight goods which is designed by transport aircraft across global nations. These are
regarded as new and air transportation goods in order to ensure about comfort, safety of pets by
providing services like door to door, booking return tickets, document clearances, and veterinary
checks and so on. Therefore, it is very important to consider dedicated freighter aircraft in
business model.
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5) Product/service developed and implemented for capturing and delivering value from
participation in global air cargo market
In order to capture and deliver value from people in global air cargo market focuses on
delivering high quality products and services to their consumers in appropriate manner (Cui, Wei
and Li, 2016). This is very important for all business to render high premium value goods as well
as services to users so that brand value and goodwill rises at marketplace in best manner.
Emirates SkyCargo is world largest cargo airline industry that provides goods to their people in
most suitable manner. Some of the product and services which are offered and implemented by
Emirates SkyCargo for capturing and delivering value from participation at global air cargo
market are described below:
General Cargo- It provides fast, efficient and convenient transportation of all types of
goods and services (Daft and Albers, 2015).
Courier Services- Emirates SkyCargo focuses on providing urgent shipment of express
integrators for their consumers across nation.
Post Office Mail- It provides all types of letters, urgent mails and documents to users
who are needed with it.
Pharmaceuticals- Emirates SkyCargo delivers life saving medicines, drugs, sensitive
pharmaceutical products with control as well as protection in each and every stage of their
journey (Global trade facilitators, 2019). Moreover, they provide vaccine, drugs for contributing
towards global health along with protecting people. They have built three tiered solution in order
to design towards sensitive pharmaceutical cargo without facing any compromise.
Perishables- Emirates SkyCargo carry integrated with cool chain solution which
guarantees product integrity as well as freshness of perishable goods. In global market, there is
travelling of food and perishable goods from one nation to another before serving at tables,
doorsteps.
Live Animals and Pets- Emirates SkyCargo transport all kinds of live pets and animals
with special care as per their requirements. They have made transport especially for animals,
birds, with full comfort and safety.
Valuables and Vulnerables- Respective organisation provide service to transit precious
stones, metals, equipments on daily basis. Such things require high level of protection from
pilferage as well as damage during journey.
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Vehicle Transportation- Emirates SkyCargo has facility of transporting vehicle from
airport to airport across our network. This provides car transportation services that raise from
commercial fleets to personal automobiles.
Specialised Solutions- It provides DG, AOG and HUM shipments in most effective and
efficient manner for their consumers.
Customised Solutions- Emirates SkyCargo has more than 30 years experience in charter
across network where team can easily source right capacity, route for meeting dimensional
shipment and requirement of transit (Dinçer, Hacıoğlu and Yüksel, 2017). This provides all types
of services to people from aerospace to commodities in tailored and cost effective solution.
6) Annual air cargo traffic volumes and financial importance of air cargo
In 2017-18 financial years, Dubai-based airline Emirates has carried 2.6m tonnes which
were increase of 1.8% over past year (Emirates cargo revenues soar 17% in 2017-18 financial
year, 2019). Along with this, sister company has registered 8.4%of global volume to around
3.1m tonnes. In context of Emirates SkyCargo has achieved revenue of AED12.4bn which is
17% over past time. This performance leads to contribute to 14% to overall airline. Emirates
SkyCargo is global largest cargo airline which is measured through freight tonne kilometres
flown that hold capacity of approx 255 passenger including 13 boeing and 777 freighters. The
report of 2017/18 was good enough for cargo airline industry to get fruitful results. Respective
organisation has entered into strategic operational partnership with Cargolux in order to
collaborate freighter aircraft capacity, interline, block space along with connectivity among
Luxembourg as well as Dubai. In month of October, partnership agreement was reinforced in
announcement with share agreement for cargo and among carriers. This is operating in 140
destinations with more than 362 charter flights. UAE airport passenger as well as cargo
operations revenues have been grown by 4% which is 3.2bn that handles in excess of 731,000
tonnes of cargo.
7) Factors that influenced Emirates SkyCargo annual air cargo volume and air cargo revenues
For doing business, freight charges are regarded as one of cost to run activities and operation
of organisation (Fasone, Kofler and Scuderi, 2016). Transportation costs are usually uncertain as
merchant is unaware about freight cost for shipment until invoice is send by carriers. There are
different factors which have influenced Emirates SkyCargo annual air cargo volumes as well as
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revenues that create positive as well as negative impact to business. Some of them are described
below:
Fuel Cost- Cost of land transport and maritime is related with fuel price. When there is fall
in price of fuel then cargo truck, container ships become cheaper for operation and transport
prices goes down (8 Key Factors that Influence Freight Costs, 2019). In this context, saving is
passed to consumers with help of fuel cost which is built on carrier pricing model. On other
hand, if there is rise in fuel prices then carrier’s charges additional expenses on to merchants.
This fuel cost has influenced Emirates SkyCargo volume as well as revenue.
Demand for Freight- Emirates SkyCargo deals in air cargo where prices depends on
product volume that is shipped through operators which is depended on underlying cost as well
as actual cost. When there is limited capacity in air cargo then selling is at premium value.
Similarly, on other hand, when respective organisation is slow then carrier offer more
competitive rate in short term.
Customer Loyalty- It is also the factor which influences air cargo volume and revenue. The
merchants which focus on offering constant business or carrier are received at preferential rate
especially when demand at industry is low (Fernandes, 2017). Every business required customer
loyalty in order to achieve success and growth at marketplace in an effective and efficient
manner. Respective organisation has to focus on providing all required facilities to consumers so
that they can attain positive outcomes in terms of revenue and volumes.
Government Regulation- The regulation of government directly impact Emirates SkyCargo
as it can set maximum limit for cargo through air that hamper business and its activities as well
as operations (Ho, 2016). For instance, government has set maximum driving hours for all
commercial vehicles. There are different regulations which are made by government if air cargo
is done by users.
CONCLUSION
From the presented report, it has concluded that air cargo industry is fastest growing at
marketplace which helps in development of nation as well as creation of employment
opportunity in an effective and efficient manner. This is important to analyse role of air cargo in
supply chain for positive outcomes. The organisation has to prepare business model which
contain key partners, resources and so on to respond towards global air cargo. Different products
and services are provided by air cargo like pharmaceutical, perishables, animals, birds,
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customised services and so on. There is rise in air cargo service from past years. Fuel cost,
customer loyalty, government regulation and so on are factors which has influence air cargo
volume as well as revenue over past decade. Air cargo has covered all categories of passengers
from different parts of world in terms of regional as well as long haul. They have their network
in different place to raise their brand value and goodwill at marketplace.
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