The Business Model Of Emirates: Airline Business Model

first airbus fleet in 2010 and still expanding. Not only it accommodate a huge number

A lucrative industry is always a target for investors looking at investment. One of the foremost factors in consideration while looking at the attractiveness of an industry is the threat of new entrants. In the airlines industry, this was a major threat a few years ago. The airlines operating in the industry were limited and the industry had few players like Indian Airlines and Jet Airways. However, as the industry had scope for accommodating more players, many players joined the fray. The airlines industry however comes with its fair share of barriers. The investment in the airlines is very huge and acts as a major barrier to entry. Bundled with it were different permits for running an airline company from the civil aviation company and FDI

American airline industry is steadily growing at an extremely strong rate. This growth comes with a number economic and social advantage. This contributes a great deal to the international inventory. The US airline industry is a major economic aspect in both the outcome on other related industries like tourism and manufacturing of aircraft and its own terms of operation. The airline industry is receiving massive media attention unlike other industries through participating and making of government policies. As Hoffman and Bateson (2011) show the major competitors include Southwest Airlines, Delta Airline, and United Airline.

The success of Emirates can be attributed through a combination of marketing mix which emphasize on excellent customer service, product and equipment. In addition, Emirates is known for its commitment to the highest standards of quality in every aspect of their business, providing premium service be it in first, business or economy class. We will look into a few P’s of the marketing mix that Emirates currently employ to become one of the most profitable

The supplier power in airlines is dominated by the world’s two largest aircraft manufacturers are Airbus and Boeing. The competition between the two manufacturers is neck to neck but that would prove to be a boon for Emirates as the prices would not rocket through the ceiling. A study shows that Emirates holds 93 Boeing aircrafts and 83 Airbus units (Planespotters, 2009). In 2007, Emirates purchased 81 Airbus flights, to extend it services- however, they chose Airbus over Boeing as the latter failed to deliver its latest aircrafts on time and moreover, Airbus had quoted a good price (Barryl, 2007). The changing oil prices also have an adverse effect on the aviation industry. In a nutshell, the bargaining power of suppliers is high.

And, finally, the threat of new entrants is low. To begin with, it is hard to enter air travelling industry because it requires big investments as very expensive equipment has to be bought. In addition, this industry is quite mature already as there are such airline business giants as Qantas and Virgin Blue already in the market.

If the power of the supplier is strong, it can give the pressure to the buyers by raising the prices, lowering quality of the product and reducing product supply. In the meantime, the industry become more competitive and profit potential of the buyer decline. However, if the power of the supply is weak and the buyer’s mercy in terms of quality and price, thus the competitiveness of the industry decline and the profit potential of the buyer increases.

The active suppliers of UK and overseas contributions have made the market more competitive. The bid system has been adopted in this industry which works independently. The main concern to these suppliers is volume along with the amount of steel, wood and concrete. The large suppliers are not found to be affected through volume and other leverage schemes.

It seems like it would be hard to enter the airline industry due to the large amount of fixed costs however lending has made it not only possible but fairly simple. New entrants will have to endure years of little or no profit until a strong customer base is established though. Meanwhile existing companies will be able to lower prices and take losses against their capital reserves just to drive a new competitor out of business. Further, consumers prefer well-known brands mainly due to safety concerns. Lastly, stringent licensing requirements and heavy regulations by organizations such as the Federal Aviation Administration and the Department of Transportation require significant knowledge base and time investment on the part of the new entrant.

For example, Boeing and Airbus supply most commercial aircraft. The concentration within the suppliers segment of the industry makes it very difficult for competitors to exercise leverage over another supplier and obtain lower prices. The power of the supplier is one key in prohibiting the ability of competitors to earn higher profits.

Increasing deregulation and liberation of the airline industry have in the past decade triggered fierce competition among airlines in key markets such as Europe and Asia. Traditional airlines mainly in Europe no longer dominant the global market like they once did. Relatively newer airlines such as Emirates Airlines from UAE now constitute key competitors. In light of the intense competitiveness that characterises the current airline industry, managers have been compelled to redesign their business models in order to increase market share and maximise profits. Some airlines have for instance adopted a low cost strategy that seeks to exploit economies of scales while at the same time offering no frills products and services.

Emirates is an airline based in Dubai, United Arab Emirates. The airline is a subsidiary of the Emirates Group, which is wholly owned by the government of Dubai’s, Investment Corporation of Dubai. (gulfnews.com, 2008). Emirates is the largest airline in the Middle East, operating nearly 3,400 flights per week, from its hub at the Dubai International Airport, to more than 142 cities in 78 countries across 6 continents. (emirates.com)

Emirates is one of the fastest-growing and most profitable airlines in the world. Yet the secret of its success is largely unknown outside the Arab world. Donald N. Sull, Sumantra Ghoshal and Felipe Monteiro unveil some of the mystery that shrouds a national carrier that enjoys no state handouts – and treats its employees as a giant family.

Supplier power: The suppliers for Company G’s iStir are limited and could drive up the prices. Because of the commitment to high quality and 100% American made materials, the iStir’s part suppliers could use their power to increase the price of each part. Driving up the price on the

It is one of the most reputable Airline companies in the Asian continent and also in the other countries of the world. Emirates Airline is owned by the Dubai’s Government. Dubai is one of the fast growing cities in the Middle Eastern region. (Butler & Keller, 2000) The company was established in 1985 with two leased aircraft from a rudimentary airport. Emirates vision is to build and maintain the market leadership that looks beyond conventional track. Emirates provide an extensive network of services within the Middle East as well as to Africa, East Asia, South Asia, Australia, North America, Europe and South America. It operates an exclusively wide-bodied aircraft fleet, composed of three aircraft families: the Airbus A 330/A 340, Airbus A 380 and the Boeing 777. The local competitors for Emirates are the Etihad, Air Arabian, Gulf Airways and global competitors are British Airways, Singapore Airlines and the like.