Introduction
According to O’Connell (2011), Emirates Airline has had a wide market share when it comes to Middle East air travel and especially amongst the Arabian Gulf Carriers. However, the question is, where will Emirates Airline be in the next five years? Emirates Airline is a Dubai airline situated in the United Arab Emirates. On October 25th, 1985 Emirates Airline was established by the Dubai government with only two aircraft. By then, what mattered to them was quality and not quantity. To date, Emirates Airline has had a beautiful and fruitful trend regarding growth and development; this had been even more appealing especially when the airline recorded profits in the global depression of year 2007/2008. For a better understanding of the possible position of Emirates Airline in the next five years, it is necessary to identify some of the major issues that are worth noting. These problems may include competition from other airlines, change in leadership, and possible congestion at airports due to increased numbers of passengers. Still in this report, the strategies that have been used by Emirates air will be discussed as well as the need to update the current plans to more efficient ones. Borrowing from the work of Magretta, the report will have excellent strategic ideas that will help achieve the overall goals that the company desires for the next five years. By being ready to handle any emerging issues in future and using proper strategic plans will with no doubt help the Emirates Air fly high in the global ranking of the best airliners and earn them a possible expansion by increasing routes that connect the unconnected.
Key problems expected to face Emirate Airline
Congestions in the airports
Congestion in the airports seems to be the major issue when it comes to the future growth of the Emirates Air. Emirates is one amongst many airlines that share the Dubai International Airport. There has been constant congestion in the runways and other airport facilities such as waiting rooms. Congestion can be linked to two main causes, that is, the inability of the existing systems to counter emergencies because of poor means of communication. Another reason is poor weather conditions and other industrial actions. Weather and industrial actions might be hard to control, but there should be strategies put in place that ensures full functioning of the systems as soon as possible. As the Dubai government has done, building up of the new airport is the best solution to this problem though it is costly. To stand a chance in future Emirates should regulate its flying hours with an aim to avoid congestions especially during day time this can be boosted by maintaining good communication with the airport's management and enhancing teamwork.
Competition
In the past, Emirates did not face stiff competition since it was busy getting connected to new markets and instead it was the main challenger to the already existing airlines. However, other airlines have been finding their way up to the top by having proper management teams and having the spirit of togetherness. Also, competition finds its way to the airline business when already existing carriers expand their services to the market and also when new airlines find their way to the market. Also, the presence of investors and availability of external finance leads to competition as capital for aircraft acquisition can be easily accessible. Competition from these airlines is a likely problem that will hinder Emirates from expanding its market share. Some of the main competitors include Singapore Airlines, Thai Airways, and Cathay Pacific, who happen to be sharing the same geographical location with Emirates. However, Emirates airlines can come up with the solution to this crisis of competition. One of the solutions is giving reliable services to their customers which will enable the company to portray a real image thus encouraging the customer to use frequently the airline. To achieve this, the number of customer complaints should be minimized, careful handling of passenger’s luggage should be maintained, and also, it should be ensured that the flights arrive on time. Emirate airline should be able to control costs so as to attract customers with reduced fares and hence facilitating to the overall profitability. Also, the workforce of Emirates should be of quality so as to improve the perception of the customer and this will encourage the customer to use frequently the airline. Emirates also need to use desired locations that can be utilized efficiently by their clients.
Leadership change
So far Emirates airline has not been affected by the issue of leadership change. Since 1985 Emirates airline have enjoyed the successful leadership of their two leaders, Sir Maurice Flanagan, and Tim Clark, who have seen the success of the company. All in all, the company faces a major challenge as the current manager is about to retire. So far no candidate have been identified as a potential successor of Tim Clark and the challenging question remains, will the company be able to maintain its consistency on growth and development in absentia of its visionary leaders? The company has to come together and identify a potential visionary leader who should be introduced to the company before the current manager retires so as to give him/her enough time to learn the current director's skills. The company will learn smoothly even after the retirement of the current Manager. The incoming manager should make an effort and get to know his/her employees and be able to create a conducive atmosphere for all the workers.
Emirate Airline current and future Strategies
In their work, O'Connell and John (2006) points out some of the major strategies that helped Emirates Airline improve greatly and become a world challenger. Many of these plans include both current and future.Common strategies include building the network, aiming at the less connected markets, investing in different types of airplanes, defining new routes, engaging in long distance flights, and above all concentrating on the quality and not quantity. These strategies have helped Emirates emerge unaffected during the harsh economic and financial crisis of the world. For the company to make good progress for the coming five years, some strategies need to be revised, and others replaced with new ones. This is with an aim to counter any emerging issues in future. The work of Magretta (2013) shows that attaining business sustainability calls for formulation and implementation of appropriate strategies towards achieving a company’s objectives.
Towards formulation of useful strategies, one must focus on the business’ value chain. The term value chain entails all the activities undertaken in producing, selling, delivering and supporting the company products and services in a unique way. About Emirates Air, quality has always been what matters the most. With an aim of improving their value chain, Emirates have concentrated more on the luxury amenities, introduced premium classes where there are added amenities with extra legroom, extra-large seats as well as adjustable headrests and leg rests and finally Emirates have added new planes to their fleets. All this have been done with an aim of improving the quality of products and services given to the customers (Magretta, 2013).
On the issue of trade-offs, Magretta says that big-name companies have had a part of trade off and have ended up being successful, however, Emirates Airs has decided to remain alone and carry out their activities without considering any outside force. Tim Clark argued that in today's world one cannot afford to let opportunities slip through. He strongly opposed alliances arguing that they restrict what one may want to venture in or engage in. However, the essence of any strategy used is for profit making, if trade-offs do not bring in profit then it would be better for one to drop them and engage in better strategies that will have positive results. Under human organization, Emirates disregards unions and prefer to conduct business on its own. This, however, will lead to low pay and limited gains (Magretta, 2013).
On the issue of Fit, any choices made should fit the overall objective of the business. The three types of fit used includes consistent, complementary and substitution. The Emirates has maintained its consistency in international flights with them having destinations in almost every corner of the world. With the increased market, Emirates has always been compatible and ready to adjust to new markets. Established plans on how to accommodate as many people as possible are always in place thus improving the standard of Emirates Air. The main aim is to make choices on the best markets to reach. Tim Clark’s choice of having direct flights to Clark Airport in Manila was one best option towards global networking strategy (Magretta, 2013).
Continuity just means that there should be continued the existence of the operations of the business for years to come. The plans formed should ensure continuity in the activities of the Emirates Air. Long term plans give hope of continuity in business operations, and that should be a point to consider during formulation of strategies. According to Magretta, Continuity enhances customer relationships, gives the suppliers and the parties a chance to continue being part and parcel of the business, it allows individuals to build skills towards strategy formulation and finally, it gives enough time for the members to understand the strategies and comply with them. Through expanding its configuration and investing in more and different types of planes is one approach that has ensured continuity. The Emirates Air should remain flexible towards accommodating any development in the plane industry (Magretta, 2013).
Recommendation
We believe that for Emirates Air to stay at the top for the coming five years, it has to concentrate more on its strategies. Emirates should consider expanding more on the international market and going deeper to tapping the underserved markets. As a matter of fact, Emirates should drop some of its strategies like being a lone ranger and try to form are Union to enable it to share a wider market. By getting prepared towards controlling any emerging issues will help Emirates Air stand better chances of facing reduced impacts of such problems. Through teamwork and proper management, Emirates will meet its primary competitors and outdo them as it has always done in the past. Emirates stand a chance to being the world’s number airline in the next five years regarding capacity, class, and quality. All this depends on how well it will address the strategies and problems that have been discussed in this report.
Works Cited
O’Connell, John F. "The rise of the Arabian Gulf carriers: An insight into the business model of Emirates Airline." Journal of Air Transport Management 17.6 (2011): 339-346.
O'Connell, John F. "The changing dynamics of the Arab Gulf-based airlines and an investigation into the strategies that are making Emirates into a global challenger." World Review of Intermodal Transportation Research 1.1 (2006): 94-114.
Magretta, Joan. Understanding Michael Porter: The essential guide to competition and strategy. Harvard Business Press, 2013.
