PESTLE Analysis of Emirates Airlines

This essay discusses the external environment of Emirates Airlines using PESTLE analysis. The factors covered include political, economic, social, technological, legal, and environmental factors. The essay also suggests strategies for Emirates to sustain and expand its business.

Running Head: ESSAY 0
ESSAY

ESSAY: 1
Introduction
This essay brings out discussion on the external environment of the Emirates Airlines. The
external environment covers various factors such as political, social, economic, technology,
environment, and legal factors. PESTLE analysis is an important tool used by the company to
support decisions regarding expansion, and leveraging the capabilities to execute the
decisions related to the growth of company. The airline renowned as Emirates is based on
Dubai (United Arab Emirates). This airline is the subsidiary of the Group emirates which is
owned by government of Investment Corporation of Dubai (Cui, Wei, and Li, 2016).
PESTLE analysis of Emirates Airlines
The airlines earn a high revenue of at least $12 billion with maintaining the workforce of
40,000 people. In addition, there are huge opportunities for the employees as they can
enhance their skills and abilities to the workforce grow their careers. The analysis helps to
understand the situation of industry that can affect the growing enterprises (Walker, Kelly,
and Beckert, 2009).
Several political factors affecting the business environment is various International airlines
who operate their flights in six continents are exposed to various political developments at
global level. The increasing global risk concern and other terror attacks that are prevailing in
Europe and other areas of the globe can decrease the demand for the air travel. The company
controls several flights in the emerging countries such as Africa, Iraq, and other Southeast
Asian region with a stable political environment. The demand can be halted of these flights
by any political change or the security issues. Any political change or other security issues in
these countries can halt demand for the flights (Ardakani, Nejatian, Farhangnejad, and Nejati,
2015). Moreover, the Trump administration travels have banned various Muslim country
people are expected to diminish the Middle Eastern airline`s load on the flights to the US.
The political situations include wars and other economic situations that are occurring in the
country. Emirates can also earn huge profit due to the recent political and economic stability
(Walker, Kelly, and Beckert, 2009). Emirates is bound by many political factors such as
Emirates airline holds the property of Dubai government. It leads the airlines to follow laws
issued by the government. Emirates signed contracts with other nations so that the routes
must be opened to the world. Moreover, their services are also impacted by the terrorism and

ESSAY: 2
wars. Governments have imposed and restricted the regulation especially for the outside
transporters (Redpath, O'Connell, and Smith, 2017).
Several Economic factors affecting the business of the Emirates airline is an international
airline and it receives its revenue in multiple currencies. Sudden movement in exchange rate
and fluctuation in various macroeconomic conditions can give a changed revenue. Moreover,
the economy of UAE is fuelled by the country`s oil industry. In addition to this, recent other
investments in other sectors attempt to make other investments business that is more
attractive centre that indirectly impacts and benefits the airlines in the regions. The declining
oil prices are considered as a progressive development for Emirates however, reducing the
demand for the premium travel to Dubai (Squalli, 2014). The economic conditions of a
country affect the availability of capital, profit, and demand forecast. Emirates is among the
competitive airlines that can attract the various industries to invest to make the airline more
profitable. Emirates operate in stable and favourable economic conditions. Moreover, there
are many airlines that have faced crashes and other severe conditions, but the Emirates have
strived to manage a better economic situation. Apart from the unfavourable conditions faced
by several airlines, emirates are the one that has not faced any aviation downturn or any
economic conditions (Whyte, and Lohmann, 2015). This is because the company has great
marketing strategies that were used to promote Dubai that has become famous for the tourist
destination. Good economic conditions is an important factor that uses modern and well-
equipped airports. The UAE government invests a generous amount for the developments for
two main airports in Abu Dhabi and Dubai (Connell, 2006).
Several social factors include the tastes, preferences, and the demand of the people. Social
change affects the services of the airlines and welcomes particular threats. Factors include the
demographics changes that rely on sex, age, religion, region in which they live, and number
of employees working in the organisation. The increased population lead to increase in airline
profits because more people travel to other countries. Moreover, the population should also
have appropriate disposable income to travel to airlines. Rapid increase in world`s population
is an important factor that shapes the demand for air travel. As the airline operates for the
society, emirates strategize to recruit and retain the UAE nationals. Moreover, emirates
always remained an active player in regulating the program for its workforce. It also ensures
employment opportunities to the people in the society (Connell, 2011). The most lucrative
segment of travelling are the baby boomers who engage in career ladders and frequent
business travel. An increasing generation, the millennial who emerged with an insatiable

ESSAY: 3
appetite to travel. The youth have different lifestyle where they highly rely on technology and
prefer a convenience at an affordable rate. Moreover, the income of middle class is becoming
disposable that has raised the harbour. Apart from this, discovered a valuable business
potential for the airlines to find the opportunities in the market. Emirates is well known and
aware of demographic changes that are influenced because of affluences, regions, and ages.
The staff should be well acquainted while operating a flight because people belonging to
different cultural values may expect the services according to them. This broad knowledge of
staff regarding the cultures could attract more passengers only because of good services
provided by the customers (Nataraja, and Aali, 2011).
Several legal factors affecting the business of emirates is the operating of government in the
pacific area under the paternal policy. Legal factor includes the laws prevailing in that nation.
In addition, the airline revenue is also affected by the fluctuations and deviations in the legal
factors. The policy and regulation enable the organization to become more careful in local
and even in global dealings. The operations managed in legal environment that will confirms
a secure and safe journey for the clients and travellers. In case of aviation industry,
environmental and legal factors vary from country to country (Demil, and Lecocq, 2010). The
phenomenal growth in gulf carriers such as Etihad, Qatar, Emirates airways that are often
incentivised especially for European and American competing airlines to limit the gulf
carriers to access the home markets by protectionist policies to discuss upon the open sky
agreements. Moreover, the eastern traffic for European and other routes such as America has
grown in couple of years. These traffic have attributed to number of agreements to free and
liberalise the air travel markets. Government policies protect the airlines from external
situations especially the political and environment factors. To avoid the issues, emirates
actions avail and arrange to allow the customers to enjoy a sage flight (Love, Soares, and
Püempel, 2010).
Several technological factors affecting the operations of emirates is the advancement of
operations through the technology has been used and recognised in providing services to the
customers of the emirates. The services provided by the company is designed in such a
manner that it can meet the competitive advantage. After the invention of internet and IT
influence, the services of the company have improved it by integrating and operating the
technological services. The technological services of the company have enabled great
aviation services. Technology avails various information regarding the availability of the
space or seats. Many aircraft such as Boeing and airbus introduced various services such as

ESSAY: 4
entertainment facilities and food services. The company has several IT system in a single
department with integrated technological services (Lohmann, Albers, Koch, and Pavlovich,
2009). The utilisation of digital technology can improve the performance, efficiency, ad
accuracy of forecasted customers’ expectation in the highly competitive industry of airlines.
There is always a high demand for customers to use the IT system so that it can provide the
information conveniently to the customers by using mobile technologies. Particularly, as far
as the Millennial travellers are concerned, they carry the opportunity for the airline to
precisely improve and services by giving feedback and the company modifies the customised
services to available and existing services. Advancement in aviation and airline technology
have an impact on fuel efficiency, which was not expected earlier. Moreover, aircrafts and
manufacturer remain under the pressure of fluctuating oil prices due to pressure of available
technology. Advancement in technology is both a blessing and a curse. Number of business
people travel for the business meetings have reduced because of unavailability of internet in
the flight. Apart from the decreased use of internet in the flight, the technology on the other
hand technology has made the security system of the airport with the ease of operating e-
booking system (Li, Wang, and Cui, 2015).
Several environmental factors affecting the business environment is as the airlines operate
above the land in the sky. This led the industry to estimate the environmental changes. The
immediate weather and climate changes affect the credibility of the airline industry. Airline
companies follow some strategies that can provide a good image. The new service availed by
the emirates known to be recyclable cutlery that has enabled the people and customers to
attract to the services. Moreover, the company uses eco-friendly gadgets to examine the
actions that can eliminate or reduce the problems in society. The environment is a major
concern that is given importance. These airlines are concerned with the level of pollution and
parallel to this adopted the recycling methods. The overall airline industry contributes to
nearly 12 percent of total emission related to carbon in the transportation of the airline
industry. Inclement weather situations such as cyclone, hurricanes, and a high temperature in
the environment can affect the airline operations in the Middle East region of the country.
The airline commits to the efficient passenger support system to provide a comfort zone to
the people. Moreover, the airline company should follow the strategies to provide excellent
services to the customers (Grimme, 2011).

ESSAY: 5
Conclusion
For analysing internal and external environment, it is necessary that Emirates management
find out its capabilities and sustainable advantages. This analysis will also help Emirates to
revert to the changing contexts including political, economic and particular current downturn
in the economy.
By providing new and unique destinations to the travellers, Emirates can expand
continuously. They also have a competitive advantage in the form of one stop flights and thus
they need to more focus on it. Emirates also need to invest more in R&D as it will help them
in offering luxurious services and thus enhance the experience on board. The unique
entertaining arrangement of Emirates Airline is hard to imitate. As the company is facing
huge operational costs, they need to diversify in to another segment. They can also start low
cost division for gaining more market share.
To survive from the financial crises, various sources of Emirates related to their value chain
need to be outsourced such as maintenance, engineering, catering and ground handling. From
sustainable benefits and large economic scale, Emirates can also reinforce or increase the
functions of Emirates cargo flights to current markets, as it will raise profitability.
Therefore, in order to sustain, the administration must focus on the issues so as to frame
unique strategies as per the business environment.

ESSAY: 6
References
Cui, Q., Wei, Y.M., and Li, Y., (2016) Exploring the impacts of the EU ETS emission limits
on airline performance via the Dynamic Environmental DEA approach. Applied energy,
183(1), pp. 984-994.
Demil, B., and Lecocq, X., (2010) Business model evolution: in search of dynamic
consistency. Long range planning, 43(2), pp. 227-246.
Grimme, W., (2011) the growth of Arabian airlines from a German perspective–A study of
the impacts of new air services to Asia. Journal of Air Transport Management, 17(6), pp.
333-338.
Li, Y., Wang, Y. Z., and Cui, Q., (2015) Evaluating airline efficiency: an application of
virtual frontier network SBM. Transportation Research Part E: Logistics and Transportation
Review, 81(2), pp. 1-17.
Lohmann, G., Albers, S., Koch, B., and Pavlovich, K., (2009) From hub to tourist
destination–An explorative study of Singapore and Dubai's aviation-based transformation.
Journal of Air Transport Management, 15(5), pp. 205-211.
Love, G., Soares, A., and Püempel, H., (2010) Climate change, climate variability and
transportation. Procedia Environmental Sciences, 1(1), pp. 130-145.
Nataraja, S., and Al-Aali, A., (2011) The exceptional performance strategies of Emirate
Airlines. Competitiveness Review: An International Business Journal, 21(5) pp. 471-486.
O’Connell, J. F. (2011) The rise of the Arabian Gulf carriers: An insight into the business
model of Emirates Airline. Journal of Air Transport Management, 17(6), pp. 339-346.
O'Connell, J. F., (2006) The changing dynamics of the Arab Gulf based airlines and an
investigation into the strategies that are making Emirates into a global challenger. World
Review of Intermodal Transportation Research, 1(1), pp. 94-114.
Redpath, N., O'Connell, J. F., and Smith, W. D., (2017) the strategic impact of airline group
diversification: The cases of Emirates and Lufthansa. Journal of Air Transport
Management, 64(1), pp. 121-138.
Ardakani, S., Nejatian, M., Farhangnejad, M. A., and Nejati, M., (2015) A fuzzy approach to
service quality diagnosis. Marketing Intelligence & Planning, 33(1), pp. 103-119.

ESSAY: 7
Squalli, J., (2014) Airline passenger traffic openness and the performance of Emirates
Airline. The Quarterly Review of Economics and Finance, 54(1), pp. 138-145.
Walker, J., Kelly, P. T., and Beckert, L., (2009) Airline policy for passengers requiring
supplemental in‐flight oxygen. Respirology, 14(4), pp. 589-594.
Whyte, R., and Lohmann, G., (2015) Low-cost long-haul carriers: A hypothetical analysis of
a ‘Kangaroo route. Case Studies on Transport Policy, 3(2), pp. 159-165.