Operations Management-Emirates 1

TABLE OF CONTENTS:

Introduction......................................................................................................................................3
Productivity `...................................................................................................................................4
Forecasting.......................................................................................................................................7
Product and Service Design.............................................................................................................8
Capacity Planning..........................................................................................................................10
Product Selection and Service Layout...........................................................................................12
Location.........................................................................................................................................12
Work design...................................................................................................................................13
Management of Quality.................................................................................................................16
Production Planning and Inventory Management:........................................................................18

Operations Management practices of

Conclusion and Recommendations................................................................................................19
References......................................................................................................................................21

Emirates Airline

Submission Date: February 23, 2023

Student Name:
Student ID:
Level:
Operations Management-Emirates Faculty Name: 2
 1- INTRODUCTION, COMPETITIVENESS AND STRATEGY:
In the aviation industry, Emirates Airlines is one well-known airline. United Arab Emirates, which was
established in 1985 and has its headquarters in Dubai, is well-known for both its vast route network and top-
notch services. It is a full-service airline that transports both people and cargo. It is necessary to facilitate the
movement of goods internationally and to build relationships between people (Emirates Airline Official Page,
2023).

Main Competitors:

Several global and local carriers compete with Emirates. Its main competitors are:

1. Etihad Airways
2. Qatar Airways
3. Lufthansa
4. Singapore Airlines
5. British Airways
Company Activity and Products/Services:

Emirates Airlines mainly provides air transportation services for goods and passengers to various industries.
Among its goods and services are:

• Passenger Flights:

Major cities and locations throughout the world are connected by Emirates' vast network of passenger flights.
They have three distinct cabin classes: first class, economy, and business.

• Cargo Services:

The airline's airfreight business, Emirates Sky Cargo, offers cargo transportation services for a variety of
industries, including electronics, autos, and medicines.

Competitive Strategy:

Emirates Airlines employs a unique strategy. In particular, its First and Executive Class suites are renowned for
providing a luxurious travel experience.

Product/Service Model:

Operations Management-Emirates 3
We might utilize the "Input-Transformation-Output" (ITO) paradigm to explain their good or service:

• Inputs:

The supplies and assets required by Emirates to deliver services. Examples of inputs include aircraft, trained
personnel, fuel, airport infrastructure, technology, and operational procedures.

• Transformation:

Emirates transforms these inputs via a range of procedures, including ticketing, customer service, in-flight
amenities, cargo shipping, and maintenance.

Outputs:

The final results are the transportation of people and products to their different locations and the journey itself.

2- PRODUCTIVITY:
The following are some common ways that airlines, including Emirates, may measure productivity:

Measures of Productivity Methods:

Revenue Passenger Kilometers (RPK):

Revenue e per passenger mile.:

 Total revenue for Emirates: 10,100 million AED

 Passenger ASK: 43.6. million ASKs

RPKM = Total Revenue / Passenger ASK

RPKM = AED 10,100 million / 43.6. million ASKs = AED 231.65 per ASK

Factors of Productivity:

 Fleet Utilization:

Emirates productivity can be increased by making the best use of aircraft by reducing turnaround times and
increasing flight hours.

 Fuel Economy:

Operations Management-Emirates 4
For Emirates, fuel expenses are substantial. Overall productivity can be improved by implementing fuel-
efficient technologies and operational procedures.

 Employee Productivity:

Increased productivity is a result of ensuring that the personnel is properly trained, that schedules are optimized,
and that operational procedures are simplified.

Recommendations for improvement:

 Invest in aircraft that use less fuel:

The fleet can be upgraded to more fuel-efficient aircraft, which will lower operating expenses and improve
output of Emirates.

 Streamline Flight Itineraries:

To improve load factors and decrease Emirates aircraft idle time, analyze and modify flight schedules.

 Put Advanced Maintenance Systems into Practice:

Predictive maintenance technologies can help maximize Emirates aircraft availability and reduce unscheduled
downtime.

3- FORECASTING:
Simple time series forecasting techniques, including the moving average for demand data over the last five
years, are employed by Emirates Airlines.

Moving Average Calculation:

Let's use a simple 5-year moving average to forecast the demand for 2023.

= (Demand 2018 +Demand 2019+Demand 2020+ Demand 2021+ Demand 2022)/5

Year Passenger Demand(million)

2018 58.6
2019 60
2020 15.8
2021 48.2
2022 43.6

Moving Average is 45.24 million.

Operations Management-Emirates 5
 Forecasted Demand
70

60

50

40

30

20

10

0
Passenger Demand(million)

2018 2019 2020 2021 2022

Analysis:

 Evaluation of Capacity:

In compared to the forecasted demand, Emirates Airlines should evaluate its current capacity. According to the
5-year moving average, 45.24 million passengers could potentially be in demand in 2023.

 Efficiency in Operations and Customer Contentment:

For operational effectiveness, capacity must be adjusted to closely match or exceed forecasted demand. It
guarantees that Emirates airline can effectively use its resources, offer passengers the best service possible, and
increase overall passenger satisfaction.

 Expenses and Market Share:

Increased costs or missed income possibilities could result from not adjusting capacity to meet demand.

Recommendations:

 Invest in Planning Capabilities:

To match forecasted demand and maintain competitiveness, Emirates should think about making long-term
investments in capacity planning, including acquiring new aircraft or adding new routes.

4- PRODUCT AND SERVICE DESIGN:

Product/Service Design for Emirates Airlines:

Operations Management-Emirates 6
  Sources:

Emirates Airlines probably draws inspiration for product and service design from a variety of sources, including
customer input, market research, industry trends, and technology developments.

 Initiators of Design or Redesign:

The process of design or redesign for Emirates Airlines may be sparked by a variety of factors. For example,
factors that spur design modifications could include fuel efficiency, sustainability, and the incorporation of
cutting-edge technologies.

Implications for Sustainability, Ethics, and Law:

 Legal Matters to Consider:

Similar to other international carriers, Emirates Airlines is subject to numerous international and national rules
that oversee aviation safety, security, and consumer protection.

 Ethics:

Providing fair and transparent pricing, guaranteeing inclusivity and accessibility, and placing a high priority on
customer safety and comfort are likely ethical considerations in the design of Emirates Airlines' products and
services.

 Sustainability Factors:

As a global airline, Emirates would be more and more concerned with the sustainability of its operations. In
order to achieve lower emissions and more fuel economy, this also includes a life cycle analysis of its aircraft

3R factors (Reduce, Reuse, Recycle):

Emirates Airlines may prioritize the 3R factors (Reduce, Reuse, Recycle) as part of its sustainability efforts.
This might entail initiatives to lower emissions and fuel usage through the use of cutting-edge aircraft
technology, recycling programs for waste produced during flights, and the reuse of materials in the cabin
interior or other parts of the aircraft when practical.

Operations Management-Emirates 7
 5- CAPACITY PLANNING:
Capacity Analysis of Emirates Airlines:

1-Capacity Identification:

 Design Power:

Under perfect circumstances, this output is the highest that can be achieved. Factors such as the number of
aircraft available, seating arrangements, and flight schedules intended to accommodate high demand would be
considered in the design capacity of Emirates Airlines.

 Effective Capacity:

Taking into account factors like maintenance, personnel schedules, and probable disruptions, this is the highest
output that can be achieved under practical circumstances. It's possible that the actual capacity is lower than the
design.

 Actual Output:

This shows how much production or service is being provided at the moment. It would be the actual number of
flights operated, passengers serviced, or cargo moved in the context of Emirates.

2-Estimates:

Let us suppose:

 100 flights per day is the design capacity.

 90 flights a day is the effective capacity (taking into account crew schedules, maintenance, etc.).

Real Output: 80 flights every day

3- Utilization and Effectiveness Calculation:

Utilization = (Actual Output /Design Capacity) × 100

Utilization = (80/100) × 100 = 80%

Effectiveness= (Actual Output/Effective Capacity) × 100.

Effectiveness= (80 /90) x 100 =88.89%.

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4- Calculation of the Breakeven Point:

Let us suppose:

Expenses Fixed: $10 million

$200,000 is the variable cost per flight.

The average revenue per passenger is $500.

We can now use the following calculation to get the breakeven point:

Breakeven point = Fixed Costs / (Revenue per Unit − Variable Costs Per Unit)

Replace with the presumptive values:

Breakeven Point is equal to 10,000,000/ (500 – 200)

The breakeven point is 33, 333.33.

Analysis of Breakeven Point:

 33,333 flights are the estimated breakeven point.

 Emirates Airlines may have excess capacity if its actual output is constantly below this point.
 One way to deal with excess capacity is to try to draw in additional passengers through marketing, look
into new routes, or establish joint ventures to split costs and routes.

5-Analysis: Evaluation of Utilization and Effectiveness:

Emirates is using 80% of its design capacity, according to the utilization rate of 80%. By using its effective
capacity rather efficiently, as seen by the effectiveness rate of about 88.89%, it is functioning effectively.

6-Recommendations:

In the event of excess capacity, Emirates may consider the following tactics:

 To draw in more passengers, marketing efforts should be increased.

 Route expansion refers to either finding new routes or boosting traffic on already-existing ones.

Operations Management-Emirates 9
  Partnerships: Working together to codeshare or share routes with other airlines.

6- PROCESS SELECTION AND FACILITY LAYOUT:

Emirates Airlines' Method for Providing Services:

Steps in the Service Delivery Process:

 Make a reservation or book:

Customers start the process by making flight reservations through a variety of venues, including the Emirates
website, mobile app, travel agents, and other online platforms.

 Verify-in:

Travelers can check in for their flights in person at the airport or online. They pick up boarding passes and, if
needed, drop off bags.

 Verify Security:

To make sure that safety rules are being followed, passengers must go through security checks.

 Check-in:

Individuals board the aircraft based on the seats they are assigned.

 Airline Services:

The airline offers a range of in-flight services, including food, entertainment, and cabin crew support.

 Arrival at the dock:

When the train arrives at its destination, the passengers get off.

 Baggage Refund:

From the designated area, passengers pick up their checked luggage.

 After-Flight Communication:

Operations Management-Emirates 10
To improve the customer experience, post-flight services, loyalty program updates, and customer feedback are
offered.

Flowchart:

Type of process and justification:

 Process Type:

Operations Management-Emirates 11
A combination of intermittent and continuous processes makes up the Emirates service delivery process.
Continuous for elements like in-flight services, where activities flow continuously, and intermittent for elements
like boarding and disembarking, which happen on a sporadic basis.

 Justification:

Variety: Emirates provides a wide range of services, from multiple in-flight entertainment selections to different
seating classes.

Volume: Emirates handles a large volume of passengers, particularly at its main hubs. It may, however, also
change based on the route and the season.

 Layout Type:

Emirates Airlines, like many other airlines, uses a combination of fixed-position and process layouts.

For activities like aircraft maintenance and service preparation where the aircraft stays still, use the Fixed-
Position Layout.

Process Type Analysis Comparing Facility Layout:

Support Work Flow:

 Check-in Counters:

The work layout facilitates the efficient flow of passengers through check-in, security, and boarding processes.

 Fixed-Position Layout:

This layout enables concentrated work on the aircraft without moving it in situations like aircraft maintenance.

Possibilities for Enhancement:

 Technology Integration:

Improve the boarding and check-in processes with further technology integration, such as self-service kiosks or
mobile check-in.

7- LOCATION:
Emirates do consider a number of factors while making strategic judgments. Among them are potential factors:

Operations Management-Emirates 12
  Hub Location:

An essential component for airlines is the central hub. Dubai International Airport (DXB), which serves as a
global linking point between East and West, serves as Emirates' primary hub.

 Global Network Work:

Its route network work's destination location is crucial. Emirates chooses its locations carefully in order to meet
passenger demand, business opportunities, and global connection.

 Infrastructure:

A major factor to be taken into account is the caliber of the airport's facilities and infrastructure. Emirates favors
airports that have cutting-edge facilities and efficient operations.

Analysis of Factors:

Emirates' success has been greatly influenced by the aforementioned factors. Nonetheless, these factors must be
continuously assessed and adjusted due to the dynamic nature of the global environment and the ever-changing
aviation industry.

Suggested Extra Sites:

Changi Airport (SIN) in Singapore

 Key global business hub Singapore places a high priority on sustainability and technology.
 The world-class facilities and efficient operations at Changi Airport are well-known.

International Airport of Dallas/Fort Worth (DFW):

 A significant business and technological hub in the US are the Dallas/Fort Worth metroplex.
 DFW is a significant hub with first-rate connectivity and infrastructure.

Operations Management-Emirates 13
 8- WORK DESIGN AND MEASUREMENT:

Work Design at Emirates Airlines:

Like any sizable company, Emirates Airlines has a diverse range of jobs and activities spread over a number of
departments. A condensed list of jobs and related activities is provided below:

Captain:
 checking things before takeoff
Traveler Attendant:
 ensuring the comfort and safety of passengers
Ground Staff:
 Cargo loading and offloading

Customer Support Employee:

 helping passengers with reservations and questions

Emirates Airlines' specialization:

Benefits of specialization:

knowledge Development: Employees can gain specific knowledge in their roles through specialization, which
improves productivity and output.

 Increased Productivity:

Jobs are customized to each employee's skills, which results in increased productivity and higher-quality output.

As employees gain proficiency in their specific activities, specialized roles may lead to cost savings.

Disadvantages:

 Job monotony:

Operations Management-Emirates 14
Employee motivation and satisfaction may suffer in specialized roles due to job monotony.

 Dependency:

If specialized personnel depart or are unavailable, the organization may become overly dependent on them.

Methods for Increasing Worker Motivation:

 Job rotation:

Provide employees with opportunities to experience a variety of roles inside the company to help them become
more skilled and less bored.

 Recognition and Rewards:

To show employees how much you value their contributions and accomplishments, put in place a strong
recognition and reward system.

Emirates' Compensation System:

Emirates, like many other companies, uses a combination of performance- and time-based compensation
systems.

Benefits of Compensation Based on Time:

 Simplicity:

It is easy to administer and calculate time-based systems.

 Stability:

Workers' steady pay is a factor in their potential financial security.

Benefits of Compensation Based on Performance:

 Employees might be encouraged to perform well in their roles by tying compensation to performance.
 Merit Recognition: Outstanding contributions are acknowledged and rewarded.

The Drawbacks of Each System:

 Potential Inequity:

Operations Management-Emirates 15
Performance-based systems may produce inequities if they are not applied equitably, whereas time-based
systems may not take into account variations in individual performance.

 Administrative Complexity:

There might be administrative complexity involved in performance management and measurement.

Analysis and Suggestions:

Emirates' usage of specialization in its work force is in line with the demand for highly qualified and trained
people in the industry. The airline can use tactics like skill development programs and job rotation to mitigate
any potential drawbacks.

9- QUALITY MANAGEMENT:
Emirates Airline’s Quality Determinants:

 Performance:

For instance, flights that depart and arrive on time guarantee that passengers arrive at their destinations on time.

 Features:

To improve the overall travel experience, in-flight entertainment systems offer a wide selection of films, TV
series, and music.

 Reliability:

Some examples of this include operational dependability and consistency in flight schedules, which guarantee
that passengers can rely on Emirates for safe and punctual travel.

 Aesthetics:

For instance, the aircraft's interior design and cleanliness make for a pleasant and cozy travel experience for
passengers.

Emirates Quality Inspection:

Emirates has a thorough quality control process that consists of several steps, including:

 Pre-flight Inspections:

Operations Management-Emirates 16
Each flight precedes a comprehensive inspection of the aircraft to guarantee its mechanical and technical
dependability.

 During the Flight:

continuous observation of in-flight services, including performance of the flight crew, passenger interactions,
and the operation of entertainment systems.

 After-flight Examination:

The aircraft goes through post-flight inspections following each flight to identify any issues that may have
occurred.

Analysis of Quality Costs:

 Prevention Costs:

One way to cut costs and improve overall service quality is through training programs for ground personnel and
flight crew.

Reduce Strategy:

To reduce the expense of conventional training methods, use cutting-edge training technologies.

 Appraisal Costs:

An example would be inspections and checks done before, during, and after flights to identify and fix potential
issues.

Reduce Strategy: To reduce the necessity for manual inspections, invest in predictive maintenance solutions.

 Internal failure Costs:

Costs Associated with Delays or Cancellations Caused by Mechanical Issues are an example of internal failure.

Reduced Strategy: To reduce the chance of mechanical breakdowns, update and maintain the fleet on a regular
basis.

Fishbone Diagram and Quality Tools:

Operations Management-Emirates 17
 Fishbone Diagram:

People
Process Material
Method Machine

Response time of
A large number of
the employees Too many calls
complaints and inquired
was late at the call received
center

Resolution of
complaint Online Portal filled
with issues
Customers inquire Feedback system Delay in
about the flight
responding to
late or after its
departure Priority handling customer
complaints
received in call
centers
Improper information provided
by the customer regarding the State of urgency
issue

Communication Aggressive and

language barriers challenging work

Call center
Customers are employees are too
impatient busy

Machine Environment

Suggestions for Enhancing Quality:

Operations Management-Emirates 18
  Make an Investment in Predictive Technologies:

Reduce the incidence of unanticipated mechanical failures and lower internal and external failure costs by
implementing predictive maintenance technologies.

 Improve Your Training Courses:

To ensure that employees are prepared to manage a variety of situations and deliver high-quality service,
continuously improve staff training programs.

 Put in place mechanisms for customer feedback:

To proactively address potential quality issues and enhance overall service quality, develop strong mechanisms
for gathering and analyzing customer input.

 Make Use of Data Analytics:

Emirates can make data-driven decisions to enhance quality by utilizing data analytics to identify patterns,
trends, and areas for development.

10- PRODUCTION PLANNING AND INVENTORY MANAGEMENT:

Emirates Production Planning and Inventory Management

Types of Plans:

 Long-term Strategic Plan:

Usually spanning multiple years, this plan centers on large investments, fleet development, and overall
corporate direction.

 Tactical Plan (Intermediate-Term):

A few months to a year, including network location planning, route optimization, and resource allocation.

 Short-term Operational Plan:

Covers weeks to months, outlining day-to-day operations, crew schedules, and maintenance plans.

Aggregate Planning Inputs:

 Historical Demand Information:

Demand trends for different services and routes in the past.

 Market analysis:

Operations Management-Emirates 19
Forecast variations in the level of competition and market demand.

The availability of crew, aircraft, and ground resources are the constraints on resources.

 Regulatory Compliance:

Following the rules governing aviation that have an effect on flight schedules.

Assuring Production Schedule Fulfills Anticipated Demand:

 Consistent Demand Monitoring and forecasting of passenger demand for different routes is done
continuously.
 Adapting flight schedules and capacity in response to fluctuating demand is known as dynamic
scheduling.
 Market research: Compiling preferences and input from customers to match expectations with services.

Emirates types of inventories:

 MRO (maintenance, repair, and operations) inventory.

components and spare parts needed for repairs and maintenance of aircraft.

 Inventory of In-Flight Services:

For passenger services, there is food, drink, and facilities available on board.

 Inventory of Ground Operations:

Equipment and supplies for ground services such luggage handling, boarding, and check-in.

 Tickets In Stock:

Tickets reserved in advance for upcoming flights.

Development of Aggregate Plans:

Transformation Model:

Inputs for Aggregate Plans:

60 million passengers are anticipated to be carried in the upcoming year.

There are now 250 aircraft in the fleet.

5,000 pilots and cabin staff are available for flight duty.

 Calculating Economic Order Quantity (EOQ):

Operations Management-Emirates 20
EOQ = √ ((2 * Demand * Ordering Cost) / Holding Cost per Unit)

 D = 60 million passengers (demand).

 S, or ordering cost per order, is hypothetically equal to $10,000.
 H (Holding Cost per Unit) is hypothetically equal to $50.

=square root (2 × 60, 000, 000 × 10, 000/ 50)

EOQ. ≈ 12, 247

 Ordering Cycle Length Calculation:

Ordering Cycle = Total Demand / EOQ

Ordering Cycle: 60,000,000/12,247

Cycle of Ordering: 4, 890 flights

Analysis of calculations:

 EOQ:

12,247 flights are the estimated EOQ. This is the order amount where the total cost of ordering and keeping
inventory is kept to a minimum.

 Ordering Cycle:

There are roughly 4,890 flights in an ordering cycle. In order to minimize costs, Emirates should place orders
for about 4,890 flights.

Recommendations:

 Regular Review of EOQ: Because the airline industry is dynamic, Emirates should periodically review
EOQ estimates based on shifts in demand trends, costs, and other pertinent factors.
 To ensure timely and cost-effective inventory replacement, work closely with suppliers.
 To automate operations and enhance accuracy, use cutting-edge inventory management systems and
technologies.

Operations Management-Emirates 21
 11- CONCLUSIONS AND RECOMMENDATIONS:
Conclusions for Emirates:

 Financial Performance:

Emirates Airlines has strong financial performance, characterized by steady revenue growth and strategic cost
management performance.

 Management of Quality:

The airline is committed to quality in all areas, including amenities, performance, dependability, and
appearance. Preventive actions and quality inspections help create a happy customer experience.

 Design of Work and Motivation of Employees:

To ensure efficiency and skill across a range of operations, Emirates utilizes specialized roles. While
specialization has benefits, possible drawbacks like job monotony must be balanced by tactics like skill
development and job rotation.

 Capacity and Production Planning:

The airline efficiently controls capacity and product planning through operational, tactical, and strategic plans.
Aligning product plans with anticipated demand is facilitated by ongoing monitoring, dynamic scheduling, and
market analysis.

 Inventory Management:

Emirates keeps track of a variety of inventory, including tickets, ground operations, MRO, and in-flight
services. While calculated EOQ and ordering cycle lengths aid in inventory management optimization,
continuous technology integration and supplier cooperation are advised for increased effectiveness.

Recommendations:

 Investment in Sustainability:

Operations Management-Emirates 22
Emirates should continue to invest in environmentally friendly technologies for its fleet and ground operations,
as the importance of environmental sustainability grows.

 Enhanced Employee Engagement Programs:

Put programs in place to enhance employee engagement and motivation, resulting in a lively and fulfilling
workplace. This could include opportunities for continuous learning, recognition programs, and frequent
feedback sessions.

 Advanced Technology Integration:

Examine cutting-edge technologies such sophisticated inventory management systems and aircraft predictive
maintenance. This can reduce costs and enhance operational efficiency.

 Customer-Centric Innovations:

Keep developing customer-centric services, utilizing new technologies to enhance the whole travel experience.
This could include cutting-edge entertainment selections, smooth digital interactions, and tailored services.

 Strategic Alliances and Partnerships:

Investigate airline alliances and partnerships with other airlines in order to increase the number of routes served
and provide passengers with more travel options. Opportunities for cost-sharing and increased productivity can
result from collaborations.

Operations Management-Emirates 23
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