Don Honorio Ventura State University

Marketing Management
MBA-1A
Emirates Case Study

80/100 = 90%

Submitted by:
Kim Arrianne A. Cunanan

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 Submitted to:
Dr. Jess Panlilio

Introduction

Emirates is an airline based in Dubai, United Arab Emirates. The

airline is a subsidiary of The Emirates Group, which is owned by the government of
Dubai's Investment Corporation of Dubai. It is the largest airline in the Middle East,
operating over 3,600 flights per week from its hub at Dubai International Airport, to
more than 150 cities in 80 countries across six continents. Cargo activities are
undertaken by Emirates Sky Cargo.

Emirates is the world's fourth largest airline in scheduled revenue passenger-

kilometres flown, the fourth-largest in terms of international passengers carried, and
the second-largest in terms of freight tonne kilometres flown. From March 2016 to
February 2017 Emirates had the longest non-stop commercial flight from Dubai to
Auckland.

During the mid-1980s, Gulf Air began to cut back its services to Dubai. As a result,
Emirates was conceived in March 1985 with backing from Dubai's royal family, with
Pakistan International Airlines providing two of the airline's first aircraft on wet-lease.
With $10 million in start-up capital it was required to operate independently of
government subsidy. Pakistan International Airlines provided training facilities to
Emirates' cabin crew at its academy. The airline was headed by Ahmed bin Saeed Al
Maktoum, the airline's present chairman. In the years following its founding, the
airline expanded both its fleet and its destinations. In October 2008, Emirates moved
all operations at Dubai International Airport to Terminal 3.

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Emirates operates a mixed fleet of Airbus and Boeing wide-body aircraft and is one
of the few airlines to operate an all-wide-body aircraft fleet (while excluding Emirates
Executive. As of February 2019, Emirates is the largest Airbus A380 operator with
112 aircraft in service and a further 11 on order. Since its introduction, the Airbus
A380 has become an integral part of the Emirates fleet, especially on long-haul high-
traffic routes. Emirates is also the world's largest Boeing 777 operator with 144
aircraft in service.

Case Study

1. How has Emirates been able to build a strong brand in the competitive
airline industry worldwide?

Emirates is the largest airline in the Middle East. It is operating more

than 3,000 flights per week from Dubai International Airport to more
than 148 cities in 78 countries. It is the 7 th largest airline in the world in
terms of revenue.

The airline has a younger fleet compare to the industry which portrays
them as stable yet competitive airline in the world. Emirates also form
an excellent business relationship from established aircraft makers
Boeing and Airbus and currently the biggest Airbus A380 and Boeing
777 aircraft operator in the world.

Emirates offer more destinations for its customers, 142 cities in 80

countries around the world thus giving them an edge over their
competitors. They also serve four of the 10 longest, non-stop
commercial flights in the world. In addition to destinations that Emirates
does not cover, they signed code-share agreements with local airlines
so that their passengers have more options when travelling with them.

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2. What are some of the apparent weaknesses with the company’s
strategic direction? How can the airline address them?

The Apparent weaknesses of the company.

The company is over confident about their position in the airline

industry.
Target only the elite class of customer.
They totally ignore their competitors.
They do not look into the pros and cons of their competitors.

Solutions to the above issues.

They shall extend new routes.

Target the middle and low class population.
By involving in the competition, making a strategies as per the
market demand.
Budget airlines or low cost carrier.

3. With the decline of fuel prices globally, airline companies continue to

reap the benefits. What impact will this have on Emirates’ business
strategy in the future?

Risked slower growth in the coming years as heavy investments

in new planes and premium-class services begin to erode profit
margins.
When the oil price is falling, options are an advantage. It is
cheaper to hedge forwards and get protection if prices go up,
but if you pay a premium for options you also retain the
potential to benefit from lower oil prices more immediately.
Emirates can roll out affordable offerings for non-premium
customers.

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 Air Arabia Case Study

76/100 = 88%

Introduction

Air Arabia is an Emirati low-cost airline with its head office in the A1
Building Sharjah Freight Center, Sharjah International Airport. The airline operates
scheduled services to 151 destinations in the Middle East, North Africa, the Indian
subcontinent, Central Asia and Europe to 22 countries from Sharjah, 28 destinations
in 9 countries from Casablanca, Fez, Nador and Tangier, 11 destinations in 8

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countries from Ras Al Khaimah, and 6 destinations in 4 countries from Alexandria.
Air Arabia's main base is Sharjah International Airport. There is also a hub in Ras Al
Khaimah and focus cities in Alexandria and Casablanca. Air Arabia is a member of
the Arab Air Carriers Organization.

History

Air Arabia was established on 3 February 2003 by an Amiri decree

issued by Sultan bin Muhammad Al-Qasimi, the Ruler of Sharjah and member of the
Supreme Council of the United Arab Emirates, becoming the first low-fare airline in
the Middle East. The airline started operations on 28 October 2003 with the first flight
from Sharjah, UAE to Bahrain International Airport. The airline was profitable from
the first year of being in business. It launched an initial public offering for 55% of its
stock early in 2007.In March 2014, Airbus delivered its 6000th A320 family aircraft to
Air Arabia.

Case Study

1. Air Arabia has succeeded in profitably challenging big established

airline companies in the Middle East and North Africa. Why don’t all
other airlines apply the same business model as Air Arabia?

Other rivals targeted comfort and luxury driven consumers and shifted
their focus to hybrid model. But Air Arabia has always been keen on
serving people who can’t afford to pay high prices for travelling via air.
This makes Air Arabia to provide lowest cost prices than anyone else.
Also other companies might be hesitating in applying same business
model as Air Arabia because then they send bad message to its target
segment that they lack innovation and creativity.

2. What challenges does Air Arabia face? What will happen if other airlines
apply the same business model as Air Arabia?

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There is always threat from new entrants and other low-priced airlines
as they may decrease its sale rates. Also if Air Arabia expand to bigger
airports then it may suffer problem due to large pressure on cost. But
still concerning to its present growth late in innovation and managing
capabilities no other companies stood against it in the field of low cost
carriers (LCC).