Marketing Principles and Practice LSBM 2018
Individual Case Study (70%)
Twenty-three years is a long time in human years, let alone airline years. Yet that is how long it has been since Emirates Airline ended a financial year in the red. It is an amazing feat, one rarely duplicated in this business. ATW’s(Air Transport World) 2011 Airline of the Year has done far more than turn a profit year-in and year-out for nearly a quarter of a century, regardless of the business cycle. Since launching in 1985 with a leased Boeing 737 and Airbus A300, it has become a leader in commercial air transport, driving innovation in operations, aircraft performance and customer service.
It launched the A380 at a time when few outside the industry had even heard of the carrier. Today it is the largest operator of both the A380 and the 777. It has been instrumental in pushing both Airbus and Boeing to improve their products to meet its demanding performance requirements – to the benefit of airlines everywhere.
It has brought originality and creativity to cabin design while winning accolades from travelers – if not from rival airlines – for its sporty pricing. It was the first to introduce personal seatback inflight entertainment units and the first to enable passengers to make authorized onboard mobile phone calls.
It is a leader in developing flexible routings that reduce fuel burn and CO2 emissions, beginning with the Flex Tracks program launched in partnership with Air Services Australia seven years ago that saved more than 26,600 tonnes of carbon dioxide emissions and 163 tonnes of NOx emissions in the first five years.It is also a launch customer for Honeywell’s SmartLanding and SmartRunway solutions intended to help prevent runway incursions and overruns.
Emirates’ rise is all the more remarkable in that much of it occurred in an era in which far larger carriers were able to take advantage of aviation liberalisation and consolidation to become global competitors. In 2000 (the year it committed to the A380) Emirates did not appear in any of ATW ‘s Top 25 lists of the world’s leading airlines. A decade later it appears in six categories.
In terms of revenue, it is the 11th largest airline in the world and is poised to enter the Top 10. It became a Top 10 airline by RPKs(Revenue Passenger Kilometres) in 2008 is now 6th. In 2009 it broke into the Top 25 in terms of passengers, carrying more than 27 million; up 21% despite the impact of the global financial crisis. It offers more than 1,100 weekly flights to more than 110 cities in 65 countries with an all-widebody fleet of more than 150 aircraft: 86 777s, 14 A380s, 10 A340-500s, 8 A340-300s, 29 A330s and 5 747-400Fs. Added to this is an order backlog of 201 aircraft worth $68 billion including 76 A380s, 70 A350s and 48 777-300ERs.
Finally, it is the world’s most profitable airline with net earnings for its fiscal year ended March 31, 2010, of $963.5 million and an operating profit of $970.9 million on revenues of $11.8 billion. The subsequent six-month profit result to Sept. 30, 2010, was even more robust at $926 million. Emirates carried 15.5 million passengers over the half-year period, up 17.3% compared to the prior years.
Many factors have contributed to Emirates ascent.It has taken full advantage of its superb geographic location, lack of legacy airline costs and the enthusiastic – but unsubsidised – support of the Dubai government. Foremost among the success factors, however, is its trio of visionary leaders who have been with the airline since startup: group chairman Ahmed Bin Saeed Al Maktoum, executive vice-chairman Maurice Flanagan and president Tim Clark, who assumed his current position in 2003.
They have assembled a highly competent management and a staff of 37,000 who operate an airline that people fly not because they have to but because they want to. Customers have a choice, after all, given that more than 125 carriers serve Dubai which pursues an open skies policy. The route network appeals not only to travelers in Dubai but to those in Europe, Asia, Africa and North America who value the efficiency and connectivity of the Dubai hub.
A cornerstone of Emirates success has been a relentless drive for cabin innovation, not just in premium class but in economy, that twice has won for it ATW ‘s Passenger Service Award. It pioneered private suites with sliding doors for first class travelers that call to mind an Orient Express-styled railway suite. When passengers are cocooned in their suites they can select from 1,200 channels of entertainment on the ICE system based on the Panasonic eX2 IFE. On the A380, first class passengers may enjoy a unique experience – an onboard shower.
For both first and business class the A380 features a stunning lounge with bar at the rear of the upper deck. The lounge, which is more like a cozy club, has a flight attendant behind the bar serving drinks and a huge TV screen showing the moving map and views from external cameras. Creative use of mood lighting and light-colored fabrics contribute to a sense of spaciousness. The color palette is a soothing mix of pastel shades and the overall effect is futuristic with soft, pleasing colors.
Business class has 76 lie-flat seat beds in a 2-4-2 arrangement, although this is effectively 1-2-1 from an access point of view, with all seats having direct egress to an aisle. Seats feature built-in amenities such as a personal minibar, privacy panel, large personal table, separate footrest extension and laptop stowage. They also include a touchscreen wireless integrated passenger seat controller for selecting entertainment features, a 17-in. LCD screen and dual USB ports.
To stay in touch, passengers are able to send SMSs and e-mails and make calls via the IFE or they can use their mobiles. Economy seats are laid out in a 3-4-3 configuration with a 33-in. pitch and 6-in. recline. Each seat has an individual 10.6-in. screen and there is laptop power and a USB port is supplied to every second seat.
Tending to passengers’ every whim are flight attendants from staggering 101 countries. On most Emirates flights the crew can speak more than 15 languages, which soothes the journey for many nationalities.
Mark Twain said: “Sail away from the safe harbor. Catch the trade winds in your sails. Explore. Dream. Discover.” It is a fitting summation of the innovation and development of ATW ‘s Airline of the Year for 2011, Emirates.
Air Transport World (2011). ATW’s 2011 Airline of the Year. [online] Air Transport World. Available at: http://atwonline.com/news/atws-2011-airline-year [Accessed 17 Aug. 2017].