Strategy  Management  
 

 
Emirates  Airlines  
 

 
 
Othmane  El  Yahyaoui  
 
 
 
 
 
 
 
 
 
 
 
Table  of  Contents  
1.   Macroeconomic  Analysis  –  PESTEL  applied  to  Emirates  ..............................................  3  
a)   Political   .............................................................................................................................  3  
b)   Economic  ...........................................................................................................................  4  
c)   Social-­‐Cultural  ...................................................................................................................  5  
d)   Technological  .....................................................................................................................  6  
e)   Ecological/Environmental  ..................................................................................................  6  
f)   Legal  ..................................................................................................................................  6  
2.   Key  External  Factors  ...................................................................................................  7  
3.   References:  ................................................................................................................  8  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
 
 

 
 
 
 
 
 
 
 1. Macroeconomic  Analysis  –  PESTEL  applied  to  Emirates  
 
The  PESTEL  analysis  is  an  efficient  tool  when  studying  all  external  factors  that  surround  
the   macroenvironment   that   a   company   is   inserted   in.   The   PESTEL   tool   stands   for   six   big  
environments:  Political,  Economic,  Social-­‐Cultural,  Technological,  Ecological  and  Legal.    
 

PoliMcal  

Legal   Economic  

Emirates  

Ecological   Socia-­‐Cultural  

Technological  

 
Figure  1  -­‐  PESTEL  Framework  applied  to  Emirates  

 
In  this  section,  we  will  detect  and  analyze  the  impacts  of  all  these  environmental  factors  
for  Emirates  Airlines,  as  it  follows  below.    
 
 
a) Political  
 
Considering   the   challenges   that   international   aviation   companies   would   face   when  
getting  into  the  territory  of  different  States’  sovereignty,  making  sure  that  all  the  regulations  
are  respected  is  extremely  important.    
 
International   aviation   companies,   as   Emirates,   must   follow   the   norms   defined   by   the  
International   Civil   Aviation   Organization  (ICAO),   an   institution   created   under   the  
responsibilities   of   the   United   Nations   which   main   mission   is   to   regulate   the   international  
civil   aviation   system.   Among   all   the   responsibilities   of   ICAO,   their   main   duties   is   to  
guarantee   safety,   efficiency,   security,   environmental   responsibility   and   economic  
sustainability  to  the  sector  as  well  as  create  standards  and  recommended  practices  for  all  
the  organizations  that  are  part  of  the  ICAO  to  follow.    
 
 As  well  as  running  the  activities  under  the  supervision  of  an  international  organization,  
the  Emirates  is  also  under  the  authority  of  the  government  of  Dubai,  as  being  a  subsidiary  of  
The  Emirates  Group,  which  is  fully  owned  by  the  State  entity.    
 
Another   factor   to   be   considered   when   analyzing   the   political   environment   is   the   current  
situation   given   by   the   Trump’s   administration   over   the   travel   ban   imposed   to   some   Arab  
countries   where   Emirates   operates.   This   has   direct   impact   on   the   activities   of   the   company,  
especially  in  the  numbers  of  it.      
 
 
b) Economic  
 
Taking   into   consideration   that   Emirates   HQ   is   based   in   Dubai,   in   the   United   Arab  
Emirates,   where   the   currency   is   the   Dirham,   one   of   the   main   economic   factors   to   be  
considered   is   the   monetary   fluctuations   of   all   the   currencies   the   company   works   with.   As  
Emirates   has   a   global   presence,   being   active   in   many   different   countries   with   different  
currencies,  being  susceptible  to  market  fluctuations  have  direct  impact  on  the  profitability  
of  the  company.    
 
Another   factor   to   be   taken   into   consideration   in   the   competitive   advantage   of   having  
the   HQ   positioned   in   a   country   where   the   supply   of   oil   (fuel)   is   of   easy   access   and   with   a  
lower   price   is   extremely   advantageous   to   the   company   –   currently,   the   oil   and   gas  
production   in   the   Unites   Arab   Emirates   represents   around   30%   of   the   country’s   overall  
economy,   although   recent   investments   in   other   economic   sector   have   been   turning   UAE   an  
interesting  business  destination.      
 
The  graph  below  shows  the  evolution  of  the  participation  of  fuel  in  the  expenses  of  flight  
companies  worlwide  along  the  years.  As  it  can  be  seen,  the  fuel  takes  great  part  on  the  cost  
of  the  aviation  sector  and  having  easier  access  to  oil  brings  great  advantage  to  Emirates.  
   

 
Figure  2  -­‐        Fuel  Costs  of  Airlines  Worlwide  
Source:  https://www.statista.com/statistics/591285/aviation-­‐industry-­‐fuel-­‐cost/  
 Furthermore,   due   to   the   global   presence   of   Emirates,   it   is   important   to   take   into  
consideration   how   the   economic   situation   and   stability   of   the   countries   might   affect   the  
activities   of   the   airline   company.   In   times   of   crisis,   touristic   travels   are   the   first   to   be  
discarded   by   civilians,   as   this   expense   is   deprioritized.   On   the   other   hand,   in   times   of  
economic  prosperity,  the  number  of  leisure  travels    scale,  affecting  positively  the  activities  
of  the  civil  aviation  sector.    
 
 
c) Social-­‐Cultural  
 
The   growth   in   the   global   population   itself   is   a   great   source   of   demand   for   civil   airline  
companies  as  it  can  be  seen  in  the  chart  below:  
 

 
Figure  3  -­‐  World  population  growth  
Source:  https://ourworldindata.org/world-­‐population-­‐growth  

Exploring  the  most  profitable  generation,  which  are  the  baby  boomers,  as  they  have  the  
highest   buying   power   overall   is   a   great   opportunity   as   well,   either   it   is   exploring   in   the  
leisure  or  in  the  business  travels  sector.    
 
Looking   into   opportunities   with   millennials   can   also   be   a   great   deal   for   companies.  
According  to  a  study  made  by  the  Boston  Consulting  Group,  millennials  as  business  travelers  
spend  as  much  as  non-­‐millennials  although  they  travel  less  for  business  reasons.  Also,  it  is  
expected  that  millennials  represent  at  least  50%  of  the  total  revenue  in  business  trips  by  the  
year  of  2020.  On  the  terms  of  leisure  flights,  millennials  are  more  propense  to  travel  with  
more  people  rather  than  alone.  Also,  the  great  thirst  for  travelling  that  millennials  have  to  
know  and  explore  new  places  is  a  factor  to  be  considered.    
 
 
d) Technological  
 
The  great  demand  of  the  digitalization  of  all  tools  that  facilitate  the  customer  experience  
with   a   company   is   a   factor   to   be   greatly   considered   by   companies.   Creating   customer  
friendly   interfaces   and   platforms   (such   as   mobile   applications)   can   bring   competitivity   to  
companies  such  a  Emirates.    
 
Also,  one  of  the  strongest  power  of  companies  nowadays  is  the  ability  to  use  all  the  data  
they  have  about  their  clients  and  the  market  and  convert  it  to  strategic  information  that  will  
be  used  to  bring  benefits  and  efficiency  to  the  company  as  well  as  for  its  customers.  This  can  
be  done  through  research  and  developments  of  new  equipment  and  facilities,  such  as  new  
aircrafts,  for  example.    
 
On   the   other   hand,   technological   improvements   in   the   market   can   bring   some  
disadvantages   to   civil   aviation   companies.   One   example   of   this   is   that   through   the  
development   of   new   ways   of   communication,   such   as   Skype,   the   need   for   face-­‐to-­‐face  
meetings  reduced,  having  a  negative  impact  on  the  activities  of  airlines.  
 
 
e) Ecological/Environmental  
 
The   constant   and   growing   demand   for   new   sources   of   green   energy   and   more  
ecologically   sustainable   alternatives   to   activities   have   great   impacts   on   the   activities   of  
airlines,   especially   considering   that   aircrafts   use   great   amount   of   pollutant   fuel,   which  
damage  the  environment.    
 
But,  this  also  opens  a  door  of  great  opportunities  to  flight  companies,  especially  because  
it   can   bring   competitive   advantage   to   the   institution   when   showing   interest   on   becoming  
less   harmful   to   the   world   by   investing   on   research   and   development   of   new   aircrafts   that  
are  more  green,  for  example.    
 
 
f) Legal  
 
The   legal   aspects   to   be   taken   into   consideration   are   the   regulations   of   the   countries  
where   the   airline   companies   have   activities   in   as   well   as   the   regulations   of   the   sovereign  
country  from  where  the  company  belongs  to.    
 
Also,  international  sanctions  and  agreements,  such  as  the  travel  ban  from  the  USA  can  
have  great  impact  on  the  activities  of  airlines.    
 
 
 
  
2. Key  External  Factors  
 
External  factors  often  have  big  influence  on  companies  when  it  comes  to  molding  their  
business   strategies.   Companies   need   to   adapt   to   and   find   opportunities   along   external  
circumstances   in   order   to   stand   out   and   maintain   their   competitive   advantages   over   the  
market  they  are  active  in.    
 
For  Emirates,  being  a  premium  class  company,  had  to  adapt  over  the  competitivity  that  
arouse   in   the   market,   especially   in   Middle   East,   run   by   low   cost   carriers.   As   a   way   to   find   an  
opportunity  in  here,  airlines  are  partnering  up  with  low  cost  carriers,  and  this  is  no  different  
for  the  Emirates,  which  has  been  sharing  partnership  with  the  company  Flydubai,  which  is  
active  in,  at  least,  95  destinations.    
 
The   main   advantage   of   this   exclusive   partnership   is   that   these   two   state   owned  
companies  will  be  able  to  restructure  and  find  more  efficient  and  strategic  solutions  when  it  
comes  to  operations,  procedures  and  performance.  Furthermore,  by  combining  the  network  
of  each  company,  by  2022,  it  is  expected  that  more  than  240  destinations  will  benefit  from  
this  partnership.    
 
The   increasing   proportions   of   tourism   in   Dubai   also   influence   the   opportunities   that   a  
company  have  in  the  market.  Considering  that  Dubai  has  become  the  4th  most  visited  city  
after   London,   Paris   and   Bangkok,   the   Emirates   has   only   to   profit   from   this   scenario.  
Furthermore,   taking   into   consideration   that   the   occupancy   level   of   Dubai   reaches   almost  
87%,  it  would  be  interesting  to  the  company  to  look  for  closed  deals  between  the  airline  and  
local  hotels  and  resorts  in  order  to  incentivize  even  more  the  tourism  in  the  region  –  from  
which  not  only  Emirates  would  profit  from,  but  also  the  city  of  Dubai  as  a  study  shows  that  
overnight  visitors  in  Dubai  in  2015  have  spent  around  $11.68  billion  dollars.      
 
The   growing   digital   disruption   in   all   markets   also   affects   the   activities   of   Emirates’  
activities.  With  the  goal  of  offering  a  more  digital  experience  to  its  clients,  Emirates  have  put  
great   effort   and   has   been   using   technology   to   structure   all   the   customer   experience   before,  
during  and  after  the  flight.    Also,  the  digitalization  of  the  processes  have  been  considered  so  
crucial   and   strategic   to   the   company   that   a   new   role   has   been   created   in   Emirates,   called  
Chief  Transformation  Officers,  where  the  main  responsibility  is  to  implement  and  improve  
the  technology  and  digitalization  of  the  carrier.    
 
The   main   advantages   of   implementing   the   digitalization   of   the   process   is   not   only   the  
customer-­‐centric   results   by   providing   a   more   efficient   service   to   the   clients,   but   also   the  
cost  efficiency  that  this  brings  to  the  company.  Moreover,  Emirates  also  seeks  to  have  more  
control   over   the   distribution   of   its   services,   getting   closer   to   the   sales   processes   through  
direct  sales.  This  brings  many  positive  effects  to  Emirates,  such  as  being  able  to  optimize  the  
booking  system  on  the  company’s  side  as  well  as  having  direct  access  and  control  over  the  
customer  data.      
 
 
 
  
3. References:  
 
https://www.bcg.com/documents/file129974.pdf  
 
https://ourworldindata.org/world-­‐population-­‐growth  
 
https://www.statista.com/statistics/591285/aviation-­‐industry-­‐fuel-­‐cost/  
 
https://www.opec.org/opec_web/en/about_us/170.htm  
 
https://www.icao.int/about-­‐icao/Pages/default.aspx  
 
https://www.emirates.com/english/about-­‐us/  
 
https://www.ft.com/content/9972c8ce-­‐0701-­‐3e2a-­‐992c-­‐b0cd43d6b449  
 
https://www.go-­‐gulf.ae/blog/dubai-­‐tourism-­‐statistics-­‐trends/