Emirates Airline: Porter’s Five Forces Analysis

Brief Overview:
Founded in 1985, Emirates is one of if not the leading business in the global airline
industry. Its operation covers almost 80 regions worldwide Emirates has grown to become the
leading airliner in the Middle East.

Porter’s Five Forces

Threats of New Entrants
There is a very high barrier of entry in the Airline Industry primarily induced by the huge start
up cost involved. Penetrating the competitive market of airline industry would be near impossible for
a newly starting airline company. The necessary resources needed to establish a proper market
position and cover a significant market share is far too high for a starting business. Contrary to
emerging business, well established companies such as Emirates have the capacity to handle the
industry’s pressure. Thus, Emirates Airlines face low threat of new entrants.

Bargaining Power of Buyers

In the airline industry, buyers rarely have the power to exert any significant influence over the
prices/fares of airline tickets. Costumer’s influence over prices is limited; opting for other airlines
which offers lower flights charges may be the extent of such influence. Emirates have established
itself as an airline business which prioritizes to offer quality service to its costumer base. As an effect,
Emirates’ costumers are willing to the avail their service despite the increase in prices. In conclusion,
the buyers of Emirates have little to no Bargaining power.

Bargaining Power of Suppliers:

With in the Airline industry there are only 2 manufacturers of civil airplanes used for
transportation; these are the Boeing and Airbus. The low number of manufacturers present in the
aviation industry means a limited flexibility in price structure as well as maintaining high bargaining
power for the suppliers. As a result, civil airplane manufacturers such as Boeing and Airbus have a
high bargaining power over the Emirates.

Threats of Substitute Product:

Emirate Ailine face moderate threats of substitute product with in the airline industry. Apart from
Emirates, there are other carrier companies that are providing air travel services such as Singapore
Airlines, SkyWest, Etihad Airways, International Consolidated Airlines, Air China and Cathay
Pacific Airways. These airline companies can be considered costumer’s substitute. Another
substitute for people traveling to nearby regions could other modes of transportation such as
automobiles. In the end, Emirates remains focus on its main appeal and selling point which is its
high-quality services to entice its loyal customer base.

Competitive Rivalry:
There is an intense competition among the airline companies at the global level with the
presence of a number of flights from different airlines on the same routes at competitive prices,
best of the services, and different kind of promotional offers to boost sales. There are
approximately thirty-seven airlines flying from Dubai on the same routes. Besides, there is an
increasing competition among the airline companies through the continuous innovative offerings
like reclining seats, on-board spas, and other such facilities.

None/Very Low Average High Very High

low
Threats of yes
New
Entrants
Bargaining yes
Power of
Buyers
Bargaining yes
Power of
Suppliers:
Threats of yes
Substitute
Product:
Competitive yes
Rivalry:
 Emirates Airline: Porter’s Five Forces Analysis
very low low medium high very high

Threats of New Entrants

100

50
Competitive Rivalry: Bargaining Power of Buyers

Threats of Substitute Product: Bargaining Power of Suppliers