Marketing Strategy of Emirates Airlines
Marketing Strategy of Emirates Airlines
Marketing Strategy of Emirates Airlines
Nowadays, we cannot imagine the world without the airline industry, because of its
fast services and huge benefits, which offers for many other industries and societies.
Also, its role is critical in term of the creation of the new global economy. According
to the U.S. department of transport, this industry is divided into four categories:
“Emirates” is an airline company based in Dubai and founded by the United Arab
Emirates government in 1985. Its main activity is the provision of commercial air
transportation services. “Emirates” is the largest airline in the Middle East and
operating nearly 3,400 flights per week. It is the world’s fastest growing international
airlines and its growth has never fallen below 20% a year. The percentage of
passengers increase is 18.4% in 2012 comparing by 2011.
As the airline industry is especially increasing and highly competitors so, there are
many market shares in the industry. Moreover, the airline industry is affected by the
environmental (e.g. political, economics and etc.) that decreasing the number of
passengers. At this point, there are many reasons, which have an effect on the airline
industry to compete among industry; so many airline companies have developed their
strategies to become more efficient in order to lead the market arena.
Today there are large number of Airline companies growing in the market, which are
looking for stealing a market share. In this point, there are more and more choices for
the customer to be able to chose the airline at which they want to travel with and yet
still looking for the one which can serve their need also.
P URPOSE
The purpose of the assignment is to analyze the marketing strategy of Emirates
Airlines.
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L IMITATIONS
The writers had the following limitations in preparing this assignment:
M ETHODOLOGY
This report provides some exposure to practical review of the airline industry. It also
looks into the case study business: Emirates Airline to explore its business progress.
A macro environment analysis has been spotted to review various external influences
on business and shed lights on future trends that may affect the industry. Analysis of
Porter’s five forces will help understand industry competition and outline influences
on development of markets and business. Using this model helps the company build a
strategy to keep ahead of these influences. Further, the spotlight is on analyzing the
internal environment. In reviewing the business performance and company’s
strategies in place, key resources, a SWOT is essential. This is done in an effort to
help strategic management assess how to capitalize on business strengths, minimize
the effects of weaknesses, make the most of any opportunities and reduce the impact
of any threats.
Various sources have been used to gather industrial data. Most of the data is from
secondary sources such as database searches, industry reports, industry conference
agenda, news articles, journals, the World Wide Webs for business research, websites
like IBIS, Roy-Morgan, business website and competitors’ websites. Theory from
textbooks is used to back up arguments in writing this report.
R EPORT P REVIEW
The report is developed chronologically through the following order:
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h. SWOT Analysis
i. Conclusion
P OLITICAL F ORCES
Air travel between countries is by negotiated agreements. Aviation regulations
between governments impact greatly on the success of an airline’s operations.
Weismen agrees most governments have strict regulations on foreign carriers to
operate certain routes in their home countries to protect the national or designated
airline. In the case of Emirates Airlines, however, Dubai is an unprotected market. Its
open skies policy helped Emirates to become a carrier that can compete with the
world’s largest airlines. Emirates has grown in scale and stature not through
protectionism but through competition - competition with the ever-growing number of
international carriers that take advantage of Dubai’s open-skies policy. Emirates has
enjoyed the benefits of global market shares from entering international destinations
such as America, New Zealand and Australia due to recent agreements on full traffic
rights from the two governments. Aviation deregulation has boosted airlines to
develop for open route entry, exit of air carriers, competitive fares, service frequency.
Further liberalization in the industry is unstoppably increasing. Hence, the playfield
competition becomes more intense.
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S OCIAL AND C ULTURAL F ACTORS
Social and cultural factors have influences on development strategies. Both domestic
and international markets where Emirates operates have culture diversity. Dubai,
Australia, Canada, U.S.A and U.K are multi-cultural countries. Benefits come from a
variety of consumers’ trends in accordance to their values, attitudes, education,
religion and lifestyles. As a fact, stable incomers make holidays annually. Another
example shows, in U.S.A, three quarters of high-income people take an air trip each
year. It is true in European countries where most people have a strong demand to
travel on annual holidays. Emirates has advantages operating in destinations where
the trend of air travel is socially enhanced.
T ECHNOLOGICAL F ORCES
Latest technology is a success driver in airline industry. The need for technological
advances to become the first mover in the industry will create the advantage of
gaining more of the lucrative business market. Emirates is fully aware of this principle
in sustained investments in latest technology pursuing its differentiation in the 5-star
standard airline. Emirates’ current order-book stands at 244 aircrafts of the newest
Boeing and Airbus, with a total value of approximately US$60 billion. It is already
the youngest and will be one of the most modern fleets in worldwide commercial
aviation. It aims to be a pioneer in technological advances, Emirates signed in-flight
mobile phone coverage agreement with Aero Mobile, developing the use of mobile
phones onboard. For many years, Emirates has been awarded numerous awards such
as the world’s airline of technological advances, Best Global Airline Website, Best in-
flight Entertainment, Best IT developer in in-flight entertainment etc.
S USTAINABILITY
Rosenthal states that high fuel prices and increasing shortage of natural resources are
facing manufacturers to make smaller, more eco-friendly vehicles. Further, the
environment has been degraded by global warming and climate change and the airline
industry has been a factor to a faster-growing source of greenhouse gas emissions. For
years, airlines have countered pressure from environmentalists with denials and public
relations about their green credentials. In recent years, airlines are working hard to
develop bio-fuel for their jets. It is high time that airlines need to enter an
environmental partnership with aircraft builders for eco-friendly aircrafts, quieter
takeoffs and landings, substantially reducing environmental impacts.
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I NDUSTRY E NVIRONMENT A NALYSIS
P ORTER’S F IVE F ORCES
This will give a snapshot of the industry competition level.
Bargaining Power of Suppliers: Boeing and Airbus are the two dominant
aircraft producers for the world’s airlines. Orders by all airlines for the latest aircrafts
are placed to either of them. As a large buyer, Emirates still has to face the threat of
paying higher prices or even delivery delays. Moreover, Emirates depends so much on
these suppliers as required products are differentiated while the suppliers have high
expertise.
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S TRATEGIC G ROUPS
There are obviously strategic groups existing in the industry in similar markets.
Examples are named: Cathay Pacific, Qantas, Air France-KLM and Lufthansa. These
major players offer similar products in terms of luxury passenger package, young
flyers, in-flight entertainment etc. This signifies that Emirates is aggressively
competing with others.
Emirates airline is one of the air carrier, which have hardly felt the economic and
airline down turn. There are three major categories of passengers: tourism and
business, expatriates and transit passengers.
1. Retain and boost market share of Emirate airlines product and services.
Success criteria of deploying a system to allow passenger to use their mobile phones
for communication, it is increasing market penetration. It can be measured in terms of
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voice and data usage and expansion of market penetration. There is not corrective
action plan if it fails to respond.
Loyalty Program
“Emirates” uses a similar loyalty program that most airline companies have
nowadays: miles. Two types of membership can be identified: Emirates Skywards and
Business Rewards. This loyalty program presented hereafter was implementing in
order to satisfy the customer by first of all allowing him to save money, but also in
order to gather personal information concerning those clients. Moreover, because a
high number of miles are needed in order to benefit from them, those loyalty
programs created a lock-in system where the customer should remain with the same
airline in order to benefit from them sooner.
Emirates Skywards
• Have access to a miles dashboard, allowing to quickly seeing the miles you have,
and the advantages you can get out of them.
• Attain a membership level relevant to the number of miles you were able to
cumulate. Levels available are Blue, Silver, Gold and Platinum that last 14 months.
An example of benefits you can get with the gold membership are lounge access and
priority check. Assessments upgrades membership levels occur after 12 or 13 months,
giving an extra month to earn miles and reach a higher level.
AMEX/VISA Cards
Both cards allow you to earn miles whiles spending. Money spent using those cards
does not have to relate to “Emirates”; it can be spent on anything. It is as simple as
this: 1 mile for every € spent anywhere, then 2 miles for ever € spent EMIRATES
Airlines.
Technologies Used
“Emirates” has been doing a really good job on the technology side. As you will see
below, they have been using every media available. From social media to apps and
online ads, the user feels closer to the brand.
Emirates used a specific CRM database, which runs during the flight in order to
maintain the profitable lasting relationship with their customers by delivering
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satisfaction. In 2004, Emirates provided 1,000 pursers with HP tablets as part of
‘Knowledge driven In-flight Service’ (KIS). It allows the airline’s cabin crew to see
which previous trips a passenger has taken with the carrier and based on this, know
their food, wine and seating preferences, or any issues a customer had during their
travels. Moreover, the gathered data supports Emirates in the segmentation and
targeting, because it gives very specific information about customers.
This system allows Emirates to provide more focused and personalized services.
Pursers use KIS to brief the cabin crew before every flight and check passenger’s
special needs, as well as see who is enrolled in Emirates’ frequent flyer program
Skywards. This enables the crew to invest more in those loyal customers and to
provide a more personalized service. Cabin crew can also use the KIS system to
perform in-flight upgrades to Business or First Class, as well as post customer
feedback that’s emailed to headquarters upon landing. That is one of the most
important sources of information that pioneers the competitive intelligence process
and allows EMIRATES to improve its services and keep their customers loyal and
satisfied.
The objective of Emirates airline is building up Dubai into a popular aviation centre
that will finally serve as an important universal long haul hub. It provides an
alternative to the traditional European airline hubs as Heathrow Airport (London),
Charles De Gaulle (Paris) and Schiphol (Amsterdam). The airline heavily promotes
Dubai as a destination, offering reduced hotel rates as well as insight to event like the
Dubai shopping Festival that hope to attract more travelers to the city. In order to
improve the number of tourism, Emirates airline add new route and destination
especially in UAE tourism.
Due to the airline managed road shows and press convention to announce its entry to
new city, these event allow travel agents, tour operators and local airline personnel in
contact and gain information about Emirates’ new routes, holiday packages and other
promotion that can give a advantage for the airline.
After performing a new route to the country’s economic hub – Shanghai – the airline
offers passengers a chance to visit the epicenter of China’s political and cultural
activities. Because of China’s richest city in terms of historical value and has a
heritage that dates back over 3000 years and houses marvels as the Forbidden City,
the Great Wall of China and the Ming Tombs.
The success of Dubai as an intercontinental hub, it has been facilitated by airline such
as Emirates. The centre point of Dubai has become extremely important; because of it
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hardly two points on the globe where it is not logical or possible to use Dubai and
connecting point and it usually a good direct route.
As Dubai is a hub for international business travelers, this is time to improve new
product to provide for top-level business executives. The CEO’ imagine of multi-
national company makes lengthy overseas journey to attend a board meeting that
could have a main impact on the company financials. The fact, company would like
CEO to be on top for the rested, refreshed and relaxed so, the cost of CEO’s air travel
is doesn’t seem so expensive when comparing to service for them.
Emirates airline has more services for business travelers that is reason why Emirates
airline introduce high quality first class private lounges to attract business travelers.
The premium class private suit would be fully outfitted with personal storage, coat
cabinet and desk and individual mini bar. Long seat reclines to become fully
horizontal couch and TV wide screen. Exceptional level of personal services
including a gourmet and wines provided by specially trained multi-lingual cabin
crews are the other value addition for this product.
After the European low cost carriers are a successful, Middle East operator also
started expression to explore new marketing concepts of “Frills-free” fly. The low
cost airline is increasing at more times in the average industry.
The low cost airline offers lower prices than traditional airline by fascinate promotion.
The low cost has flexibility fare that is one reason why some people is switching cost
to them.
Air Arabia dominates exclusively to this low cost carrier service in UAE. Therefore,
Emirates Airlines must decide how to respond this threat posed to the large expatriate
market in UAE. Among the options considered there is scope to introduce low-cost
subsidiary of Emirates Airlines.
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Emirates Airlines be supposed to slightly spread from current marketing objectives to
obtain the low cost airline market share and to retain its customer base of UAE
expatriate market. This can be done launching new subsidiary to cater budget airline
market. The key routes should be high demand and large number of expatriate’s home
country like Egypt, India and Pakistan.
In terms of Emirates Airline system, new budget airline helps to introduce new Al-
Makthoum International Airport in Jebel Ail that is located on Dubai border. This will
provide residents of Dubai and Northern emirates enhanced travel option to
neighboring destinations. Emirates Airlines is placing lease order of for 200 aircrafts.
The carrier is expected to use Airbus A320 or a Boeing 737 on lease basis for the first
few years prior to acquiring ownership status.
I NTEGRATION OF M ARKETING M IX
P RICE
Emirates Airline is using the premium pricing strategy, which is to offer a higher
price than what other airlines in the market offer. Emirates Airline is using this
strategy because it serves luxurious excellent and high quality services to their
customers that merit more money than other airlines who offer regular standard
services. Besides, it uses this strategy because it targets people from medium to high-
income level who are willing to pay more in order to receive better services.
However, in recent years it is planning to introduce some low-cost carrier.
P LACE
Today, Emirates Airline has about eleven travel shop branches in the UAE and about
122 branches outside the UAE all around the world that provides superior services.
Besides, plus the physical distribution shops, Emirates Airline has also an online
website presented in about nine languages in order to reach all its target segments
from different nationalities. Through the website, customers can book their flights,
check the latest offers and book an accommodation in a hotel during his travel.
P ROMOTION
The new airline has to use the same methods of promoting as Emirates airline but in a
way that fits its budget. For advertising, it has to advertise in newspapers that mostly
attract this segment like Gulf news and in cheap magazines such as Ahlan. Billboards
are good tool for advertising, they are attractive and people everywhere could see
them. Advertisements have to be written in simple language and easy to understand.
For sale promotion, it is recommended to offer privilege card for its customers the
same idea of Skywards the more miles the customer travel the more benefits they got
such as free ticket at Emirates airline. This offer will increase its brand loyalty.
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P roduct
Emirates is always the first to offer the high-quality, latest technologies and services
to their customers. It is the first airline to show the BBC world news updates in flight,
the first to give travelers the ability to send and receive emails and SMS messages
from any class and the first airline to implement TVs in all classes. It is known of its
high standard safety and security flights since it is implementing many security
programs and safety systems. In addition, the company has gained a wide esteem that
including email services for all its passengers. It also allows live text news for
customers in their aircrafts. Besides that, Emirates was also first of the middle-east
Airline company introduce a Digital Widescreen System in 2005. This was the service
that has not been provided by other Airline Companies of the world.
• Booking
• Complain
• Baggage claims
• Reservation with partners
• General questions…
S OCIAL M EDIA
As mentioned earlier, EMIRATES is present on every social media existing. Whether
they are highly active or not, they are registered in the following social media:
• Facebook
• Google +
• LinkedIn
• Twitter
• Instagram
• YouTube
• Pin Interest
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After researching for “Emirates” CRM presence on the net, I quickly noticed the
increasing number of Ads I was seeing on my Internet browser. Moreover, I could
also notice their adwords banner on top on my Google research. Meaning that not
only they use internet as a commercial platform in order to again have the user feel
closer to the brand, but also it allow Emirates to monitor who has been clicking on
their ad, from where, when, and how many times. This information is essential to
“Emirates” allowing them to focus on the right client, with the right needs.
P HONE A PPS
IPhone and android apps can be found as well. Those apps can be used for buying
tickets, online check-in, or monitoring its membership. Through those apps, Emirates
is within reach of your pocket.
F INANCIAL P ERFORMANCE
“Emirates” airline is always growing by no less than 20% a year, the profit margin
increased from 2010 to 2011 from 12.7% to 19.4%.
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SWOT A NALYSIS
A SWOT analysis provides a clear basis for examining Emirates business
performance and prospects. It helps management review its strategic direction in
response to changing contexts. The thorough analysis of external and internal
environments discloses significant implications. The company is able to review its
strengths, weaknesses in the contextual environments. Strategic management are
those who are able to identify future trends for the business and respond to changes,
particularly in the current economic downturn.
Strength Weaknesses
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C ONCLUSION
In aviation business flight safety is paramount. Being the largest airlines in the world
Emirates is the most successful fleet in maintaining the flight safety. Since induction
it did not encounter any major air accidents and even there was no loss of life or
injury. Loss of one aircraft can even take the one year profit of an airline. More so, the
negative impact on the marketing aspect has shut down many airlines with the crash
of one aircraft only. Emirates Airlines’ most efficient management is operating the
fleet in such a successful manner that it has become an exemplary airline in the
aviation industry.
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APPENDIX 1
F LEET OF E MIRATES
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R EFERENCES
Jammoul, Ahmad (2013) The Strategic Diagnosis: Emirates Airlines. academia.edu
[online]. [Accessed 20 July 2014]. Available at: < https://www.academia.edu/549479
2/Emirates_Strategy >.
Rodrigo (2012) Marketing Strategy Analysis for Emirates airline. The Write Pass
Journal [online] 16 November [Accessed 20 July 2014]. Available at: <
http://writepass.com/journal/2012/11/emirates-airline/>.
Wikipedia (2014) Emirates (airline) [online]. [Accessed 30 July 2014]. Available at: <
http://en.wikipedia.org/wiki/Emirates_(airline)>.
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