The objective of this paper is to qualitatively analyze the Emirates airline’s business model regarding marketing as well as recommend possible alterations that could be made to enhance their marketing strategy which could optimize performance and ultimately increase the likelihood of producing an increased revenue.
The Emirates airline was first established in 1985 to become the national carrier and to fulfill the needs following the retraction of services offered by Gulf Airlines at that time. The founding CEO was Maurice Flanagan, whose experience included leading British Airways, Gulf Air and BOAC. He was quickly joined by chairman Sheikh Ahmed bin Saeed Al Maktoum. The current CEO is Tim Clark. The airline initial operated two leased aircraft, a Boeing 737 and an Airbus 300 B4. There has been a rapid rise in the global demand for airline travel and Emirates has grown rapidly over the years and its current fleet consists of 110 A380’s and 150 Boeing 777. Emirates currently boasts a total of 155 destinations in 80 countries. This growth has taken just less than 35 years.
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This assignment will attempt to describe and analyze the marketing strategies using a SWOT analysis. Further, it will outline marketing strategies, conclusion, and recommendations. In order to critically analyze the airline’s business model, I have used secondary resources in order to qualitatively identify the airline’s marketing strategy which was used in order to promote their product and generate revenue. I have used the SWOT analysis as a tool for determining and gaining a more in-depth understanding of their business environment in which they operate.
Strengths
Geographically, Dubai is placed in a region of the world which provides the airline with a world centered hub. Dubai is also becoming a leading jumping-off point for tourism in the Arabian region. Customer care is perceived as being exceptional. Travelers perceive Emirates as a top-quality airline. London, the home of Arsenal football club is named the ‘Emirates Stadium’. Several other football clubs are recipients, AC Milan, Hamburger SV, New York Cosmos, Olympiacos, Paris Saint-Germain (PSG), Real Madrid C.F., S.L. Benfica and the Asian Football Confederation (AFC). As well as many other sports, including rugby, cricket, motorsports, tennis, and AFL. Advertising is one of the components of the airline which is integral to the awareness of this company. There is a variety of advertising mediums which include: inflight magazine, sponsorship, television, cinema, social media, and printed material.
Emirate’s marketing spreads a ‘lifestyle’ persona which draws in travelers and increases customer loyalty. Emirates has a total of 155 destinations in 80 countries. This comprehensive global coverage is a solid strength for the airline. The fact that Emirates is based in Dubai provides an advantage in the recently increasing tourism demand to and from the location. The location provides good reachability to neighboring destinations. Furthermore, the airline is in a viable position for other carriers to approach them for an alliance which is an opportunity for generating increased revenue through greater incoming traffic by working together with other airlines through partnerships.
Emirates workforce is huge, about 50,000 people, consist of approximately 120 different nationalities. On average you will find 12 different nationalities on a flight.
The recent drop in tourism to Dubai has recovered and is now a positive attribute for the airline. Statistics recently published by Dubai's Department of Tourism and Commerce Marketing revealed that the number of international overnight visitors to Dubai increased by 3 percent in the first half of 2019. Compared to last year (8.10 million), 2019 witnessed the arrival of around 8.36 million tourists.
Emirate used the slogan ‘So be good to yourself. Fly Emirates’ in its advertising. Thus, promoting an image of luxury and comfort. Emirates has a fleet of high quality, wide-bodied aircraft, which provide the traveler with a quality experience.
Weaknesses
US travel ban' didn't survive a court challenge, it led to an instantaneous 35% drop in bookings for Emirates' routes to the United States. Emirates fleet consists of large aircraft (A380’s and Boeing 777), during the recent downturn in passenger number this meant flying with empty seats, resulting in loss of revenue falling victim to the high perishability which is a common attribute of the airline industry being an intangible service. With smaller aircraft flights could be reduced and passengers redirected to fill seats.
Recent allegation that the airline received subsidies from the Emirati government gave rise to claims of unfair competition, particularly in the US. Emirates has focused on the more affluent traveler.
The budget travel population is a significant market.
Opportunities
Tim Clark (CEO Emirates Airlines), recently reported that several governments, airports, and organizations in Europe have approached the airline requesting Emirates to provide services to and from their region because of growing frustration with their local airlines. There is also an opportunity of catering for the lower to the middle-class traveler, possibly by expanding its fleet to smaller aircraft. Emirates has recognized the potential to expand its operations to the African continent. Travel via Dubai as opposed to a European hub reduces travel times significantly from the African continent. Furthermore, the airline could form an alliance with other airlines such as QANTAS in order to cooperate with as well as share their incoming traffic generating more revenue.
Threats
The Trump administration attempted to restrict travel to the U.S. by citizens of various Muslim-majority countries. While the initial 'travel ban' didn't survive a court challenge, it led to an instantaneous 35% drop in bookings for Emirates' routes to the United States. US authorities have prohibited passengers flying to the U.S. from several cities (including Emirates' hub in Dubai) from bringing laptops or tablets as carry-on items. Although this is a security measure, it has an impact on business travelers, who wish to work during their flight. This has resulted in a significant number of business passengers traveling via a European hub instead of Dubai.
Following a growing number of incidents where passengers had various negative experiences with the Airline, the Facebook page titled ‘Emirates Unsatisfied Customers’ has emerged. The bad experiences are mainly related to delay, which then trigger in some circumstance’s immigration control problems with passenger’s visas. This has impacted negatively on the airline’s publicity.
Etihad and Qatar Airways have grown significantly over the past five years and pose a threat to passenger numbers for emirates. Both airlines have developed a reputation for quality and reliability, they are also in competition with emirates in the qualities in terms of the premium culture of emirates. Fluctuation in fuel cost has a significant impact on the airline due to its size.
Marketing Strategy
Emirates being a premium airline/ full cost carrier providing high-quality services with increased comfort and luxury is a key to their marketing strategy especially for business travelers. This can evidently see from their business and first-class designs which are said to be ‘inspired by Mercedes Benz’. The airline’s ‘business to business’ approach provides the airline a way to reach their target demographic being business companies and business travelers, as well as the higher-class society who have secured their financial security by a larger margin. These are people who can afford to pay for comfortable airline services. According to the OAG Analyzer, the number one route by seat capacity between 2018 and 2019 offered by Emirates is Dubai to London Heathrow and London Heathrow to Dubai being 2,219,585. London Heathrow represents one of the European financial centers and is the financial capital of the United Kingdom. The value of an airline service’s subjective to each demographic. For business travelers, if an airline can provide quality and comfortable services which minimize the individual's fatigue level at the destination, the product/ service would be deemed to be of high value. (e.g., conference meeting) this would increase performance in their job as well as provide convenience for the customer.
Conclusion
The SWOT analysis of Emirates airline highlights the airline has several great strengths as well as a number of weaknesses. There are also opportunities that the airline to might research and turn into strengths. Consideration should also be given to the threats so that their impact might be either eliminated or minimized. Of the strengths, the perception of quality throughout the entire experience is of great value to the organization. This brings a greater customer base which is willing to pay for the product on offer. Along with the geographical global convenience, which comes with being central to the traveling populations of the world. Considering the weaknesses, the fact that the fleet consists of all large, wide-bodied aircraft, could be turned into an opportunity. Developing a group of smaller aircraft could increase the market share of lower to middle-income passengers. Looking at the opportunities, the development of the African continent routes would certainly lead to an increase in passenger numbers. Of the threats the attempted to restrict travel to the USA by citizens of various Muslim-majority countries, is difficult to resolve. The airline has no control over the reaction to such political machinations. Also, the ban on laptops as carrying on luggage to US cities from departure such as Dubai is out of the airline's control.
Recommendations
- Add smaller aircraft to the fleet and develop the marketing for lower to middle-income earners.
- Develop African continent routes.
- Develop strategies which can deal with a serious customer issue, such as long delays. This will counter the negative publicity engendered by such media outlets as ‘Facebook’.
- Develop modern social media advertising and possible sponsorship via social media.
References
- Global. (2019). The Emirates A380 fleet | Our fleet | The Emirates Experience | Emirates. [online].
- Emirates Australia. (2010). History | About us | Emirates Australia. [online]
- Stephenson, M.L. (2013). Tourism, Development and ‘Destination Dubai’: Cultural Dilemmas and Future Challenges. Current Issues in Tourism, 17(8), pp.723–738.- Peer reviewed.
- Emirates. (2015). Sponsorships | About us | Emirates. [online].
- Emirates.com. (2019). Emirates Route Map. [online].
- Mateusz Maszczynski (2017). What Are the Top 5 Cabin Crew Nationalities at Emirates? [online].
- Nabbout, M. (2019). Dubai’s Decline in Tourists Was “Short-Lived”, Numbers Back Up Again. [online] StepFeed.
- Levine-Weinberg, A. (2017). Flight Cuts at Emirates Are a Bad Sign for Airbus. What About Boeing? [online] The Motley Fool.
- HotelierMiddleEastcom Writer,2017. Middle East Travel to US Drops Following Trump Ban. Peer reviewed.
- AP NEWS. (2019). Associated Press News. [online].
- Scott, A. (2015). Emirates Airline Sees More Opportunities to Fly in Europe. [online] U.S.
- Routesonline. (2014). Emirates Sees Strong Network Growth Opportunities in Africa. [online].
- Levine-Weinberg, A. (2017). Flight Cuts at Emirates Are a Bad Sign for Airbus. What About Boeing? [online].
- Golding, I. (2018). Customer Unhappiness and How to Create It. A masterclass by Emirates | CustomerThink. [online].
- John F.O’Connell, 2016. A Study into the Hub Performance Emirates, Etihad Airways and Qatar Airways and Their Competitive Position Against the Major European Hubbing Airlines. Peer reviewed.
- Business Traveller, 2017. Emirates Unveils New Cabins for B777 Fleet, p.17(1). Peer reviewed.
- Esther Martínez-Garcia, Berta Ferrer-Rosell, Germà Coenders, 2012. Profile of Business and Leisure Travelers on Low-Cost Carriers in Europe, Vol.20, p.12(3). Peer reviewed.
- Lohmann, Guilherme, 1994. From Hub to a Tourist Destination. An Explorative Study of Singapore and Dubai's Aviation-Based Transformation. Volume: 1. Peer reviewed
- OAG Data analyzer, 2019, OAG Data analyzer, Top x report.
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