Emirates Airline:

Connecting the
Unconnected

Akhil Soin (2023BLP004)

Divya Singh (2023BLP018)
Mrinal Koul (2023BLP033)
Priyanka Mandhare (2023BLP046)
Raviteja Kotyada (2023BLP050)
Introduction
 Aviation in the Middle
East
Q- In an industry where profitable firms
are scarce. How has Emirates managed The 1980s aviation market in the
to hold its own and deliver solid financial Middle East was dominated by
performance for years? What is behind Gulf Air
Emirates success? As a non-core city for Gulf Air,
Dubai experienced reductions in
air service in 1985 that compelled
Dubai's leaders to launch its own
airline.

Armed with only two planes and

$10 million in seed capital provided
by the Government of Dubai, the
airline initially developed a regional
focus to connect underserved
markets.

On 25th October 1985, Emirates operated
its first flight from Dubai to Karachi and
Mumbai, using a Boeing 737 and an
Airbus 300 B4 wet-leased from Pakistan
International Airlines
Emirates looked at the KLM and Singapore
hubs of the 1990s as a model they wanted
to emulate. Cathay Pacific, Singapore, and
even American carriers' domestic hubs all
operate using this mega-hub principle.
Emirates could little afford to rely on a point-to-point route model since Dubai in the 1980s and
1990s was too small a market to service alone, and certainly not the major tourist destination it
would become in the 2000s.

Conscious of its unique location and the small local market at the time, Emirates pushed to expand
its international routes quickly.

With a strong growth record in the regional market, Emirates set its sights on increasingly distant
destinations to Feed into its hub. Its focus on long-haul service began in 2003 when new aircraft
technology allowed Emirates to initiate direct nonstop service to New York and Sydney on newly
purchased Airbus A340s.
By 2008 Emirates had become the largest airline by revenue-passenger miles and by 2015 served 138
destinations across the globe. From its humble roots, in just 28 short years the airline had grown to
service 39.4 million passengers, book $19.9 billion in sales, and employ 48,000 people. It had also
consistently managed to maintain operating profitability for 25 consecutive years, no small feat in an
industry that had consistently failed to return the cost of capital.
Strategically
Hu
Placed
b
Emirates operated out of a single global
mega-hub at Dubai Airport (DXB), a strategy
it had maintained since its origins.

The airline industry missed on international

travel’s shift from transatlantic bases to a
multipolar model, including the rise of South-
South demand. Emirates saw an opportunity
in the BRICS countries' rapidly growing
models and in emerging markets in general,
and focused the strategy on investing in
these markets
Strategically
Placed Hub

Dubai benefited from several

inherent strategic advantages as a
hub city. Dubai’s position on the
Arabian Peninsula placed it at the
nexus of global transit routes, a
strategic location between Europe,
Oceania, Asia, and Africa.

Dubai’s relative distance from

congested European airspace
meant that aviation traffic was
minimal and that flights could
connect at almost any time of the
day, allowing for twenty-four-hour
operations.
 Strategically
Placed Hub
Dubai’s benefited from relatively
good weather

Most importantly, over one-third of

the planet's seven billion citizens lived
within a four-hour flight of the city,
and over two-thirds lived within an
eight-hour flight
Strategic Advantages:

Dubai’s position on
the Arabian Peninsula

Minimal Aviation
Traffic

Weather conditions
Passenger base

Building the network

Travel and Tourism

Route Planning

Captured
underserved markets

First Mover
advantage

Inline with market

advancements

Hub and spoke

model
(Centralization)

Alignment, Structure and

multilevel segmentation
Operations and
Route Strategy:

Revamping the fleet

Investments in safety
and cost control.

Flex tracks

Emirates cargo
services

Investments in
market and demand
research

Aero political
considerations
 Point of difference:

Exception service allowed to build

passenger loyalty and avoided direct
competition with low-cost competitors.

Services:

Duty-Free shopping
Hassle-free visas
In-flight
experience
Personalized
experience-Paradise
CRM tool

Marketing:

Sports Sponsorships

Specific ad
campaigns through
magazines.
Dubai's contribution in the success of Emirates Airlines is as mentioned below:

Location:
The Dubai benefited from several inherent strategic advantages as a hub city. Dubai's position on the Arabian
Peninsula placed it at the nexus of global transit routes, a strategic location between Europe, Oceania, Asia, and
Africa. This allowed Emirates to take maximum advantage of its connectivity.

Resources:
UAE being the major exporter of oil in the world meant that the major resource for the Emirates, the fuel,
was available at a very low price than many of its competitors. Emirates was capable of reducing their fixed
cost, and the subsidies and Tax exemptions by the government fused many of the profits
made by the company into its own development. Due to the lower operation cost, Emirates was able to pass the
benefits on to the customers which many of its competitors couldn't afford to.
 Air Traffic:
Dubai's relative distance from congested European airspace meant that aviation traffic was minimal and that
flights could connect at almost any time of the day, allowing for twenty-four-hour operations. For Emirates, the
flexibility in operations meant covering trips to the entire world and having customers reach their destinations at
the most preferable time.

Weather:
Dubai benefited from relatively good weather; aside from occasional fog and the general heat, airport
operations remained relatively free of the rain and snow storms that often-caused delays in European
and American airspaces. The good weather conditions in Dubai meant that there were lesser factors for
delays, as most of its operations are based on connecting to other flights using the hub as a gateway to
the next travel.
Emirates Strategy for Sustainability:

Emirates airline is a relatively new airline with a flat organizational structure and maintains a lean
workforcew which reduces the overhead costs considerably.

Moreover as we in the Airline industry, where the threat from substitutes, other competitors and the
negotiating power of supplier such as Boeing & Airbus and consumers are high, it is essential to have a
competitive advantage which is sustaiable.
For Emirates this competitive advantage is based on the
following:-

Emirates operates out of Dubai and hence gets the geographic advantage as Dubai is ideally located to connect the
rest of the world with Asia and South East Asia. So the volume of the passengers is high and it can develop a circuit
between any two cities in the world.

Low cost of Dubai airport also helps Emirates. The cost of basing at Dubai is low and this helps Emirates to reduce
costs as compared to other airlines which operates out of other more expensive hubs.

Due to no income tax at Dubai, Emirates also saves expenses by saving on taxation.

The borrowing cost of Emirates is also lower as it is partly owned by Dubai government and hence enjoys sovereign
guarantee.

Since the above advantages are expected to continue, so Emirates is expected to continue its growth and its strategy
seems sustainable.
Thank You