Professional Documents
Culture Documents
Nxumalo
Project 2
Strategic
Management
Student #
131988
Table of Contents
Question 1
1. Introduction
The history of Emirates Airlines traces back to the 1980s when Gulf Air, the
dominant regional airline, started cutting trips to Dubai. The government of Dubai
responded by unveiling the Emirates in 1985. The company received an amount
of $10 million from the royal family as a start-up capital. This was to enable it to
operate independently without any further government subsidies.
Over the years the company has grown in leaps and bounds by adopting various
strategic operations that have assisted it, to realize growth and profitability. It is
now rated as the top leading airline in the Middle East Region and one of the top
airlines in the world and beyond.
Despite these successes, the Emirates Airline is still committed to pursuing further
growth through innovation and hopes to become the largest and leading airline in
the world.
In examining the strategies that will help the brand grow over the next three years,
it is important to shed light on the pivotal points that the airline can work on to
improve its services and to keep abreast of market challenges and competition.
The airline is based in the Middle East, a region that is marred by political
conflicts and terrorism. This has propelled the company to invest in very costly
security measures and airport surveillance.
Emirates Airline operates flights to many regions of the world. The political
environment in many of these countries is stable, however any political change
or security concern can halt demand for Emirates.
All the above developments affected travel demand patterns and more broadly,
consumer and business confidence. Although Emirates made an effort to
respond to the new developments especially in the U.S., the drop in demand
for flights to the U.S. continued and had to finally make a decision to reduce
some of the flights to the U.S. and redeploy capacity to other parts of the
network.
Aviation and travel are today one of the engines and enablers of the UAE
economy, connecting us to the global trade commerce and tourism
opportunities. (Emirates Annual Report, 2016/17)
Emirates is an international airline so the revenues are collected in multiple
currencies. The DAE is fixed at 3.67 against the US Dollar so currencies
fluctuations are not significant. However, the strong US dollar kept eroding the
airlines top line in major markets, some parts of Africa faced ongoing currency
devaluations.
The decline in oil deposits and unstable oil prices has led Emirates to develop
strategies that will effectively deal with unstable jet fuel prices. The airline has
entered into deals with several major oil companies to supply jet fuel at prices
that will remain unchanged no matter what the future markets present. These
strategic fuel partnerships have ensured that Emirates maintains its
profitability, thus staying ahead of its competition.