History Of Emirates Airlines 1j4z2l

Introduction This report has been developed primarily for Emirates Airlines. The idea being put forward is for Emirates to widen their market grip into low farebudget airlines as well. Emirates have been a market leader in the aviation industry for over 2 decades. But in order to cut short the completion and also increase their market share; Emirates need to dive into the budget airlines sector. If Emirates implement the plan perfectly, emirates can gain up to 30% of the entire budget aircraft market share in under 3 years. The plan is for emirates to initially start short distance international flights to and fro 20 countries with Dubai being the international hub for these planes. This plan will be executed with the planes being supplied by Airbus. These aircrafts will be specially designed for Emirates’ new low budget carrier; EmiratesMadyaf. Emirates Airlines commenced operations in the year 1985. Emirates now operate and fly to over 140 destinations around the globe. Their approximate valuation (if gone public) is estimated at up to $40 billion. Emirates is a subsidiary of The Emirates Group which is an aviation company holding which is a government-owned corporation. The main objective of this paper is to analyze and evaluate the pros and cons of introducing a new carrier into the Emirates Airline family.

Brief History of Emirates Emirates airlines with all its luxury, being one of the most happening cities, have its own impressive history in Dubai, UAE. In 1984, when His highness Sheikh Mohammed Bin Rashid Al Maktoum and Mr. Flanagan decided to

launch an airlines with a capital of dollar 10 billion, they had a clear vision of their goals. By leasing their first jets from Pakistan, Emirates had their first launch. Later, in 2005 they ordered 42 Boeing-777, which was one of the largest orders ever placed; then on Emirates has grown rapidly and was taken to new heights. Even though the Dubai government owns Emirates, it has been treated as a separate business entity, which has helped in its tremendous growth through their unique style and through competition. Over the years the airline business has expanded to over 140 destinations, which gives the customers the benefit of direct flights. Besides that, the airlines business has expanded to award-winning cargo division, leisure division and an airline IT developer. The tremendous from the pleased customers has only raised the rank of Emirates among all its competitive flights. Accentuating its growth, Emirates airlines is one of the largest operators of Airbus A380 and Boeing 777. Moreover, it has grown in its financial status immensely, which can be seen from the survey as of 2013/2014 which shows it carried 44.5 million engers and 2.2 million tons of cargo marking it’s at the summit among other airlines.

SWOT analysis

Strengths: 

 

Emirates airlines have the privilege

Weaknesses: 

of existing in a country, which is

customers, and even their

one of the best tourist hubs in the

economy class is over-priced

world. Emirates lie in the UAE where the

compared to other international

cost of fuel is cheap. Emirates has elevated in rank with



depends on the international

employees and 78 countries to fly to. By entering the cargo business,



travelers The increase in competition has limited the market growth, and has

Emirates have only reinforced its 

flights. The decrease in tourism can affect it unswervingly as it mainly

having over 160 nationalities of



Emirates fail to cater the budget

raised the bench-mark.

position in the market. Emirates also sponsor various major events leading to an increased brand name all over the world.

Opportunities: 

Introducing a brand new low cost

Threats: 

airline for only budget travelers

coming years can be reflected as a

could open a whole new opportunity for Emirates, and will

Increase in fuel prices in the



threat to airlines. With flights like Qatar airways, and

give it a chance to compete with

Etihad airlines posing competition

not only high-end flights, but

for luxurious flights, Emirates has to come up with strategies to fight



budget flights as well. Emirates can reach to destinations



they haven’t undertaken so far. Merging with local flights from

in the market Low cost airlines like Air Arabia,

these competitors, and stand out 

countries so as to provide

Jazeera and Flydubai can also be

connecting flights to locations that

considered a threat, as the budget

don’t have international airports.

travelers would choose those flights over Emirates, and hence it fails to cater all customers.

PESTLE analysis Economic: Emirates airline grew and was developed in Dubai, which has a relatively strong economy and a high GDP per capita. Dubai also demands high tourism and this flight is the number one choice for most. All these points lead to considerable revenue for the company. After the Great Recession of 2008, there had been a downturn in the aviation industry as the cost of labour, fuel, raw material costs all increased, but emirates combated this by reducing rates to their popular destinations such as India and Pakistan. Now more and more people look to saving their money on travelling, therefore this will benefit our budget airlines. Technological: Every company tries to gain the first mover advantage for becoming highly popular and successful. Emirates has won numerous awards for their brilliant technology. Emirates relies on Boeing 777 and Airbus A380, both of which lead to remarkable fuel saving and CO2 per enger. Emirates have adopted the best flight planning system, “Flextracks”, that will allow them to use flexible air traffic routes leading time to save time and fuel. Looking at a sample of 592 flights, Emirates managed to save 628 tons or fuel and reduced overall trip time by 57 hours. Every minute reduces CO2 emission by 160 kilograms. With this much being saved per minute, the fuel requirement also lowers, making it more profitable for the budget airline. Political & Legal: Airline industries have been greatly affected by the tragedy of the 9/11 attack. Due to this, the security all over the world has increased. Airports have to pertain to strict regulations that are set up by the various government authorities around the world as they operate in an environment where enger’s safety is of top priority.

Socio-cultural: Emirates headquarters lie in Dubai where a significant proportion of the residents have a high level of education and are classified as lower or upper middle class. But as UAE is a developing country, it also has a lot of laborers. Emirates is one of the best airlines in the country, and because of this it provides their customers with a higher social status. We are going to capitalize on the goodwill of Emirates making Emirates Express a first choice for all those seeking a cheaper airfare. Demographic: UAE lies in the Middle East making travelling by airlines the most sought after mode of transportation. Dubai population is extremely diverse and a majority of its population lies in Generation X and Y. Most of the Baby Boomers will retire leading to lesser spending on airfares. As said before, Dubai is a multicultural city in which 85% of the residents are expatriates. For catering them, they will be provided with the same entertainment system, “ICE entertainment”, which consists of TV shows, movies and radios in over 30 languages. 

Ecological: Customers are increasingly becoming more aware of the impact of pollution on the planet. According to research, the aviation industry s for approximately 5% of global climate pollution. Emirates has worked towards increasing their fuel efficiency and their results are 14.5% better than the International Air Transport Association (IATA). Airbus A380 uses 20% lesser fuel than any large aircraft. Lower fuel being burnt leads to lower CO2 emissions. These aircrafts will consist of engine GP7200 which will save approximately 500,000 litres of fuel per aircraft in one year. These A380’s and latest Boeing777’s leads to Along with this Emirates also contributes to conservation programs in UAE and Australia for wildlife and animals.

Consumer Analysis

Majority of the consumers flying by Emirates choose it for reasons such as business, tourism or further studies which is backed up by the fact that Dubai is not only the center for tourism but also the hub for healthcare and education. For example, International events, festivals and the Dubai World Trade Centre exhibitions are few of the reasons that add to the advantage for Emirates. What's more, Emirates provides entertainment and quality services of high caliber and facilities due to which we have a loyal customer base. As a part of our aircraft line we are introducing the new budget airline “EmiratesMadyaf”. We will be adopting the niche marketing strategy to concentrate on the lower and middle income groups. Profile variable: Geographic Location: This new airline is being provided essentially to allow travelers to travel not only to short distances but also to travel to places of their choice but within the time span of 5-6 hours. Demographic variable: Income group: The lower and middle income classes are the target for our budget airline. This would allow them to fly but at a fare which is reasonable. Behavioral Variable: Usage rate: With an average of more than 1,500 flights flying to 6 continents, the usage rate of airplanes can be measured as heavy usage for various different reasons such as business, leisure or further studies. Loyalty: The target group would consist of those consumers who travel by other budget airlines but have the desire to travel by Emirates due to the quality service provided and cannot since the cost of travelling is expensive. Also attention will be paid to retain our existing consumers.

Buying on occasions: People usually travel during school breaks or festivals. Hence we target mostly tourists and families who want both comfort and low prices which is what “EmiratesMadyaf” is being launched to provide. Psychographic Variable: Lifestyle: Concentration is on those buyers who not only value their time but also have their own opinions, beliefs and interests that guide them to travel around the world to gain new experiences and to make memories. To conclude, our target market mostly focuses on those buyers who want to travel in a pleasant manner and particularly the individuals who belong to the lower and middle income groups. Be it families with children, students travelling or tourists on a vacation, these groups are taken into in our target market.

Maslow’s Hierarchy of Needs/Wants Tourist's needs or desires are arranged hierarchically. Needs that are at the bottom level are relaxation, trailed by wellbeing/security, self‐esteem and improvement, and satisfaction needs. The core idea hidden in this theoretical system is that an individual's travel desires changes with his/her travel experience. People's travel needs change over their lifetime and with acquired travel experience. As tourists turn out to be more experienced, they progressively look for fulfillment of higher level needs. The following Needs/Wants are satisfied:

1) Social Needs – It is a part of human nature to want acceptance and to belong in the society. An individual purchases tickets to visit places not only to explore them but to also spend quality time with their loved

ones and strengthen family bonds and friendships. Hence, the social aspect is achieved. 2) Esteem needs and Self-Actualization – The satisfaction one receives from esteem needs is a result of being accepted and valued by the society. By travelling, people not only visit important monuments and museums but they also explore the temples and shrines which lead to them experiencing the different cultures and traditions. Different places have different ways of affecting a person’s way of thinking that can lead them to live life in a positive way through self enhancement. Once the esteem needs phase is achieved, self-actualization becomes easier to reach.

Competitor Analysis Emirates, one of the leading airline companies in the world, amongst the other high flying carriers such as Qatar Airways, Etihad Airways, and Lufthansa etc. compete for slot dominance which has become a glaring reality. The integration of EmiratesMadyaf has also been open to prevailing competition from several low-cost carriers including: Fly Dubai Launched in 2008, operates in from a modernized and sophisticated Terminal 2 functioning in the Dubai International Airport and currently has a massive fleet of 45 Boeing 737-800 NG flying to over 96 destinations including Middle East, Russia, Africa, and Eastern Europe. The airlines are designed to offer only certain respective services such as optional purchase of checked-in baggage, weightage of max. 32 kilos and pre-booked food services (Robeel Haq, 2010).

Air Arabia Air Arabia was nominated as Middle East’s Best Low Cost Airline at the Skytrax World Airline Awards 2013 (Skytrax, 2013). Serving around 59+ destinations from two

imperative hubs, U.A.E. and Morocco carries a considerable fleet 0f 20 new Airbus A320 aircrafts. Their net profit margin had a 6% increase; however a slight dip of 2% turnover recorded as of 2009/10 bearing about 3m engers. Al Jazeera Serving Dubai since 2005, Al Jazeera is one of the youngest fleets with an ontime performance of 95%. Undoubtedly, the existence of Al Jazeera has jeopardized the existence of EmiratesMadyaf. The CEO of Al Jazeera aims to become the leading regional network airline and focuses on positioning of brand using fundamental tactics. Moreover, whilst Emirates, Etihad Airways and Qatar Airways have fixated on long-haul flights, Al Jazeera plays safe and focuses on short-haul among vulnerable competitors.

INDIRECT COMPETITION

Other low-cost airlines that are not in direct antagonism but may still pose a threat to EmiratesMadyaf are as follows: Ryanair – Headquarters in Dublin, Ireland; Ryanair poses a significant threat to EmiratesMadyaf position due to its old dominance and consistent performance over the years. With total revenue of £1.24bn and an average enger count of 63.8m along with flying to several destinations, competition is definitely fierce with Ryanair around. EasyJet - Biggest low cost airline in Britain established in 1995, EasyJet gives competition to all the no-frill airlines with its whooping designed aircrafts and high maintenance quality standards. Currently, their revenue stands at £1.19bn with a enger fleet of 83m per year. Moreover, EasyJet competes drastically for the epitome in budget airlines against EmiratesMadyaf as its sheer dedicated cabin crew and high flying reputation speak for itself.

STP PROCESS SEGMENTATION TARGETING PRODUCT POSITIONING Segmentation is likely to be Targeting is likely to be Emirates airlines are likely to demographically distributed undifferentiated; however more be considerate with with emphasis on distinct focus on the untappedEmiratesMadyaf in of concentrating on those with market segments; targeting positioning strategies adopting both high and medium those in need. highlighting the , benefit lifestyles. and price differentiation aspects distinctly.

Product

Product

Emirates, being one of the highest grossing airlines with recurrent improvements and innovations introduce EmiratesMadyaf, a vast integration of Emirates discovering and integrating a new service into the market, a budget airlines low-cost carrier.  One of the main primary core services that it will provide is high-tech inflight entertainment systems that will upgrade its overall entertainment quotient.  Abstaining from charging per kilogram and initiating an allowance rate up to 15kg of free luggage baggage.  With collaboration of Emirates A380 flights, engers can now enjoy high end services including neon lights and ambient lighting used for tailored cabin atmospheres for night flights, bar facilities and other luxurious accommodations that satisfy both budget carriers cost perspective and enger appeal.  Moreover, the no-frills airlines can consolidate with Terminal 3 which is completely designated for Emirates.

EmiratesMadyaf also aims to introduce more -friendly amenities like handicapped restrooms, fuselages that are circular in design which helps to alleviate from pressure loads by tension and also helps relieve engers from stress concentration or fuselages rectangular in shape as it proves more efficient in space consumption.

Nonetheless, EmiratesMadyaf aims to enhance its enger comfort level by implementation of environmental control systems coupled with efficient air controlled systems. Air within cabinets is completely interchanged every 2-3 minutes wherein high competence filters eradicate about 99.99% organic matter and particulate. Alliance with the ICAO who aims to cut back on CO2 emissions by 2020 implies Friendly cabin will introduce Wingtip devices proposing sustainable fuel improvements and resourceful operations (Airbus ProSky, 2015).

Visit to Step Conference 2016 Held on the 4th and 5th of April 2016 at the Dubai International Marine Club, Step gathered 4000+ like-minded investors, entrepreneurs and industry experts tackling topics involving Tech, Digital and Entertainment. Step 2016 also brought back Startup Basecamp across MENA, Europe, North America and other regions providing a platform for new ventures to showcase their ideas to investors and mentors. Addition to the overall Step agenda included one-on-one sessions, pitch contests for designated start-ups and several workshops. Eminent industry leaders stipulated their insights on respected topics: the Tech track observed investors discussing latest trends in e-commerce, wearables etc. All these activities not only would give a head start for the propagation of EmiratesMadyaf, but also develop recognition and a niche for itself among the other high flying and established businesses. This event has the potential to take EmiratesMadyaf to new horizons and maintain a sustainable position for itself contributing to the Emirates airlines portfolio.

Pricing Price is an important element in the overall marketing plan and an apt pricing strategy needs to be set for EmiratesMadyaf. Many factors affecting the appropriate pricing strategy including: engers carried per year and responsiveness of target market – The size of the enger fleet will determine the pricing tactic and the aggregate price to be charged into the market. Moreover, their willingness and attitude to pay for elastic prices is a factor. The cost structure – Traditionally, low-cost airlines aims to offer low fares via online booking systems, concealment of free in-flight catering and the attainment of homogenous flights (Cassia et al., 2006). With the containment of costs being an essential factor in the successes of low-cost carriers,

researchers have devised how cost-efficiency is essential in the derivation for the pricing policy. (Gudmundsson, 2004). Fly Dubai The pricing strategy is miscellaneous

Air Arabia “Pay less, Fly more” is Air Arabia’s

for both economy and business

tagline wherein price plays a crucial

travelers wherein the latter focuses on

factor in booking flights. It focuses on

convenience and direct flights. Fly

the untapped target segments and

Dubai adopts price-cutting wars during

therefore offers more of a segmented

Ramadan time sustaining future growth

pricing approach than dynamic pricing

and also focuses on dynamic pricing.

to the Middle Eastern target audiences.

Return flights from Dubai to Beirut –

Similarly, a roundabout flight from

24th December – Jan 2nd costs AED1,690

Dubai to Beirut costs AED2,424, not very economical here.

As Fly Dubai may be a clear-cut potential competitor of EmiratesMadyaf, their pricing strategy is likely to be quite analogous; also most probably offering a dynamic pricing tactic. Through the integration of the novel budget airlines, the main focus will be on providing on low fares and competent prices. Where low-cost and full-cost carriers coexist on completely separate ranks, they do not compete together.

Place Emirates airlines currently fly to 164 destinations spread over 78 countries in six continents. Emirates have a dense presence in the South East Asian countries as a majority of UAE’s population are citizens of those countries. As our budget airline is still fairly new, we plan on offering flights to 54 destinations in 20 countries listed below. We also offer 1.

2. Afghanistan 3. Bahrain 4. Bangladesh 5. China 6. Egypt 7. India 8. Oman 9. Pakistan 10. Philippines 11. Qatar 12. Kuwait 13. Saudi Arabia 14. Sri Lanka 15. Nepal 16. Yemen 17. Jordan 18. Lebanon 19. Iran 20. Iraq 21.

22.

Travel agencies and internet agencies will be the two major

intermediaries. The customers can choose either of the above or use the emirates website for their bookings. Both of these agencies provide a full-fledged plan for their clients and offer tickets are a cheaper rate. These agencies will be rewarded a commission as an incentive to sell more tickets. 23.

24.

25.

26.

PROMOTION

27. Emirates airlines are a strong believer of promoting their product, their budget for promotion almost reached a billion dirhams. Promotion is the best way to communicate the product to the end s. For our budget airline, the promotion mixes that will be used are as follows: 28. 

Direct Marketing: We will be making use of personalized text messages and e-mails that are generated by software and forwarding them to our potential s. The benefit of this over advertising is that only those who have subscribed for offers will receive these emails, making all the



receivers our target market. 29. Advertising: Although the cost of advertising is great, it is very effective as it reaches a large market. The media that will be used for advertising are digital media, print, broadcast and outdoor media. Digital media,

especially the internet and mobile portion has become an exclusive way of communicating and receiving from the customers. Social media ment leads to improved sales and great exposure. Print media refers to newspaper and magazines, for those who don’t have enough time to surf the web; this would be the most appropriate. TV and radio ments are likely to make the product more appealing to the people; they are also moderately cheaper per target reached and communicate to a mass audience. Outdoor media that will be used are the



bus stops and billboards in the UAE. 30. Public Relations: or PR is used for changing the way an organization is viewed by various groups. Emirates being a financially stable organization can help in developing positive PR by undertaking sponsorships. Sponsorships help in raising awareness of the new airline. Many events take place in the UAE that are viewed worldwide such as tennis, F1 and horse racing, sponsoring one of these events will provide great media coverage. 31.

32. The other methods in promotion mix are Personal Selling and Sales Promotion. Personal selling would not be feasible (in time and money) for the organization as it would involve face-to-face conversation. Sales promotion provides incentives in order to make quick sales, Emirates is a reputed airline and doesn’t require making quick sales as they already have a large following. If anything, these will be used during a recession to attract people. 33. 34.

35.

Timing and Budget section

36. 37.

The current slogan “Hello Tomorrow” is used to unite people of

different cultures from around the world and through that we plan to

bring forward “EmiratesMadyaf” so as to be able to fly people home to their families. 38. 39.

The entire idea is primarily focused on the lower and middle

working class who value time and money; it would be suitable to launch this new low-cost airline during peak times when there are festivals, ideally at the beginning of the year (January 2018). Promotions ought to begin at least a year in advance to catch the attention of potential consumers. 40. 41.

The budgeting plan will concentrate on marketing

communications costs such as advertising, public relations, including the planning, expenditures and ongoing tracking of the marketing efforts. This will help us to spend our budget with maximum efficiency and generate maximum sales. Moreover, the integration of Wingtip devices and other environmental control systems may incur some heavy capital costs but subside in the future. Overall, a feasibility study and financial statements need to be undertaken to ensure the implementation of EmiratesMadyaf is viable and sustainable in the unforeseeable future years to come. 42. 43. 44.

45.

Conclusion

46.

Emirates are known for its successful and innovative products

and services that have been given recognition by its loyal customer base. The inclusion of EmiratesMadyaf to Emirates airlines will give it the opportunity to cater to new clients by altering the experience according to their needs. Not only will this new low-cost airline function in an environmentally friendly manner but it also helps to increase tourism. 47.

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49. 50. 51. 52. 53. 54.