Strategic Management for Emirates Airlines

Running head: STRATEGIC MANAGEMENT
Strategic management
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Introduction
Airline sector is one of the most competitive and potential sectors in the current business
scenario due to the reason that this sector is rapidly growing along with the inflow of the new
competitors. Moreover, in the recent time, it is identified that the airliners brand majorly from the
Asian and Middle Eastern regions are gaining the global market hold over the traditional western
countries based legacy carriers (Williams 2017). This is mainly due to the reason that with the
emergence of the low cost carrier service across the world along with the growing popularity, the
conventional premium and legacy carriers are facing the challenge in staying viable in the
market. In along with these issues, the newly emerged challenge for the airliners is the increasing
price of jet fuel. It is the key requirements for any airliners and ever increasing trend is affecting
in their profitability (Borenstein and Rose 2014). Thus, in between the increasing competition
and increasing operating cost, it is a challenge for the airliners including both the legacy as well
as the budget carriers to maintain their profit margin and business viability.
Emirates are one of the leading airliners in the current civil aviation sector and are
considered as the fourth largest carrier in the world. They are based in Dubai, UAE and operating
between more than 80 countries and 150 cities. Hence, Emirates are having worldwide presence
with having more than 250 aircrafts in their fleet. It is also identified that Emirates are owned by
the government of Dubai as the single undertaking (O’Connell and Bueno 248). Thus, they are
gaining the advantage of government support along with having the access to larger funds.
However, as discussed in the above section, the key issues are posing challenges for Emirates as
well and it is important for them to review their internal competencies in dealing with these
challenges.

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This paper will discuss the entire case scenario of Emirates and the relevant global factors
in their business. Both the opportunities as well as threats will be identified. In the next part, the
identified factors will be critically analyzed and solutions will be provided based on two strategic
management tools.
Global aviation industry
As discussed earlier, global aviation sector is highly competitive in nature with the
presence of multiple competitors and limited market size. It is reported that in 2019, the global
aviation sector will witness the gross loss of $4.7 billion and this will also take a toll to the
average profitability of this sector. This is due to the reason that previous year, this profit margin
was 35.5 billion, which will come down to less than 30 billion due to the expected loss. There
are number of reasons being identified for the low profitability of the global aviation sector (Wu
and Cheng 2013). One of the major reasons is the decreasing trend of the passenger traffic that is
reducing the revenue. On the other hand, the increasing cost of operation due to the increase in
the fuel cost is further creating pressure on the airliners in managing their profitability. Thus, it is
important for the airliners to come up with innovative solutions in bypassing the cost of
operation and increasing the profitability.
Key trends in the current aviation industry
One of the major trends in the current aviation industry is the alternate sources of revenue
due to the reason that flight services are not only the only source of revenue for the flight
operators rather than selling different consumer good items in the flight, merchandises and added
payment for baggage are the added sources of revenue. Hence, in the recent time, Emirates will
not be profitable enough only by offering their core services but they should also look out for

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new and innovative sources. Customer engagement is also a key factor in the ensuring the
positive return from the market. Gone are the days when the customers are bound to avail the
services offered to them. Currently, it is the service providers who engage with the customers in
determining their needs and requirements and design the service accordingly (Lee, Seo and
Sharma 2013). Thus, Emirates will not be able to increase or develop their business even by
offering the premium and quality services. They should also engage with the target customers in
offering distinctive and differentiated services.
Business strategies of Emirates
On the basis of the major challenges being identified for the aviation sector, it is
important to review the existing business strategies of Emirates and the extent to which they are
effective enough. It is identified that they are operating as the premium service provider in the
market and are more concentrated towards creating premium service experience for the
passengers rather than just offering no frill services. Thus, the business strategy of Emirates is
more concentrated towards enhancing the profitability over volumes. On the other hand, the
existing business approach of Emirates is more towards the long haul services over the shorter
haul services (Guercini et al. 2014). This is due to the fact that Emirates are majorly plying as the
international carrier than the domestic carrier and thus long haul services between the countries
are majorly offered by them. The current fleet design is also proving the point that they are more
concentrated towards the long haul services because of the fact that wider body aircrafts from
Boeing and Airbus are mainly used by Emirates. However, in this case, they are missing out on
the potentiality in the shorter haul routes that to be done by the narrow bodied aircrafts. Hence, it
can be concluded that there are few negative and positive factors associated with the current
business strategies of Emirates.