In-Depth Managerial Analysis of Emirates Airline Organization - Case Study Example

Emirates Airline In-depth Managerial Analysis 1. Mission Emirates Airline is a Dubai-based Emirates Group subsidiary, the ownership of which lies with Investment Corporation of Dubai- a Government of Dubai body. Since the airline operates around 3,400 flights every week, it makes it Middle East’s largest airline as it operates flights to 74 countries covering 150 cities and 6 continents. In terms of passenger kilometres it was one of top 10 carriers throughout the world and by addition more fleet it came to 4th position by the end of 2012. Notable of its non-stop flights to well-known destinations are Houston, San Francisco and Dallas from Dubai. Its mission statement reads as this: ""We exist to deliver the world’s best in-flight experience", while it lives up to the expectations of its customers in giving them sustainable, leading and safe civil aviation experience (TheekSource.com, nd). Planning methodologies Emirates Airlines has created brand equity of its own, primarily because of its premium pricing strategy and the enviable in-flight experience. But in the recent years since the dynamics of airline industry has been changing on account of new aviation players hitting the market and wanting to take a pie from existing businesses, the airline has recently come under slight pressure to create new planning methodologies to counter the competition pressures. That is despite the fact that as a major airline of the world, it has rarely felt economic down turns which are common with other airlines. But most of this airline's planning methodologies have been driven by three segments of passengers which form the chunk of its business. These are tourism and business, transit passengers and expatriates. The airline gains a lot from its home territory's tourism and business potential. Dubai is considered as a hub for both and since it is ever-increasing, so is Emirates Airline's passenger base. It is estimated that anything above 15 million visitors will make way for Dubai in the coming year which, by any conservative estimates, forms a strong segment of business for Emirates. Strategy Emirates Airline aspires to be the world’s biggest carrier and has been working relentlessly in this direction through what it calls as "globalistas", a name given to its global marketing strategy. To make this strategy popular enough to deliver it is taking full advantage of technology, particularly multimedia marketing campaigns. The strapline for this is "Hello Tomorrow" and the intention is to project the airline as one that enables meaningful experiences and global connectivity (O'Reilly, 2012). The campaign has been launched with a vision of image-maker for the airline to one that of a global lifestyle brand from the existing one of travel brand. The focus of this campaign is particularly centred on younger audience, an attempt that is considered as an extension of the one it started way back in 2009 by targeting kids. The airline expects this strategy to transform into a movement, driven by its workforce which is 45,000-strong. This strategy is also being taken positively because it involves a number of initiatives that are directed towards showcasing airline's corporate social interest. With the current unshaken image that the airline has and the vision it holds for future, "globalistas" is being taken seriously as its preferred marketing strategy of the moment. Customers and competitors As mentioned above Emirates Airline business is based on three passenger categories. These are Tourism and Business segment in the United Arab Emirates (UAE), expatriates in UAE and transit passengers. All this has been boosted by Dubai's economic market that is increasing by the day. The influx of expatriates has increased on account of this which works towards an advantage of Emirates Airline because it plans its routes accordingly. The expatriates fetch it great deal of business and wherever they come from, Emirates Airline has signed mutual agreements with their respective governments to operate in. On its own Dubai has an "open sky" policy which, in other towards, does not bar any other airline to compete with this airline. Another important segment is those of the transit passengers as Dubai offers the best transit position to passengers to connect with Australia, Asia and Europe. It is notable that Emirates has been taking due advantage of this "connecting point" feature through several of its promotional campaigns. The airline is extremely competitive on account of its free competition strategy. This has helped it improve its corporate image and operate in several territories without facing any operational bottlenecks. At the same time has been continuously increasing its fleet and flights to destinations that could have been otherwise strong competitors to it. For example it has been increasing flights to the US as part of its global strategy, a strategic point that is seen as "warding off" its nearest competitors. It has enabled the airline to stay competitively in the aviation market (Doganis, 2002). In the Asia Pacific region it has successfully made a reduction in its air fares, enabling it to take extra market share of air passengers (Palmer et al., 2006). Also in terms of acquiring Europe's A380s, its nearest competitors - if at all they could be termed as such - are far behind the orders placed by Emirates. These include Qantas, Singapore Airlines, Lufthansa, Air France and British Airways (Open Sky, 2009). Recently, however, Emirates entered into a global partnership with Qantas on fourteen flights operating between Australia, Dubai and beyond (Emirates.com. 2013). 2. Organisation As explained Emirates Airline is a Emirates Group subsidiary which, in turn, is a subsidiary of Investment Corporation of Dubai, a government enterprise. Emirates Airline, on its own, has seven subsidiaries and Emirates Group has a little over 50. It follows a business model which is popularly known as "Emirates business model". This model is considered as one responsible for its success as it is based on a flat organisational structure (Maier, 2005). This helps the airline cut down on overhead costs. It has not so far entered any global alliance. One of the most important reasons being cited for this is its reluctance unless offered the position of the lead participant just as Air France is in SkyTeam and Lufthansa in Star Alliance. In terms of staff, it incurs lower costs as compared to many other airlines. Most of its labour comes from countries like Pakistan and India, known for providing cheap labour. Decision-making As according to His Highness Sheikh Ahmed bin Saeed Al Maktoum the decisiion-making at Emirates Airline is left to Emirates Group executives who are at the helm of its organisation, development and planning. Sheikh Ahmed Bin Saeed Al Maktoum, who is considered as the pioneer of Dubai as a global city that it has turned now, supervises all affairs at the Emirates Group and its subsidiaries including the airline (TheEmiratesGroup.com, nd). At the moment the hierarchical order of the airline is in this order: President Emirates Airline, President Group Services & dnata, Emirates Group, Executive Vice President Human Resources, Emirates Group, Executive Vice President and Chief Operations Officer, Executive Vice President - Chairman's Office, Facilities/Projects Management and P&L (NA), Executive Vice President dnata, Executive Vice President Service Departments, and Executive Vice President and Chief Commercial Officer. Change Management Emirates Airline thrives on a pioneering spirit ingrained within a corporate culture that is innovative. These two aspects have turned it into an aviation giant. The most critical aspect of its change management is its "make it happen" attitude that runs through the organisation from top to bottom levels. Taking calculated risks is its forte and for that it has employed very talented and bright people (IATA.org, 2012). 3. Leadership style Emirates Airline attributes its position and competitive advantage to its leaders. The airline possesses an impeccable set of rules, ethical standards and styles that enable it to act decisively and quickly. Its success can be primarily be attributed to its current leader, Tim Clark, who has been a charismatic motivator for the airline's staff at all levels. Today the organisation can boast of a team that is competitive, empowered and confident to take the right decisions at the right time. The leadership style at the airline has been democratic and influential, who has been so inspirational that it has become for him to exert influence very easily towards attaining common goals. In other words it can be deduced that the leadership style at Emirates Airline been "socially influencing". This has been further provided impetus by airline's drift towards corporate social responsibility, sending out signals in the aviation industry that the airline cares not only for its own uplift but that of community too (Misho, 2010). The airline's leadership styles determine its management styles too. In order to be marketable and competitive more often than not it is using more than one style at a time. In general it follows a mix of strategic and participatory style. Its mission, objectives and vision are governed by its strategic management style which in the travel market has enabled it to gain a competitive edge. Heroes at Emirates Airline Emirates Airline values its workforce and puts them at the centre of attention in as far as company's growth and success is concerned. They are its real heroes. As a result of this it makes sure that they get, depending on the position they are recruited into, all the benefits suited for each position. These include concessional air travel, group-wide profit share, individual merit pay, medical and dental insurance, exchange rate protection, annual leave ticket, utilities allowance, furnished accommodation, end of service benefits, annual leave, transport allowance, cargo concessions, education support allowance, telephone allowance and much more (1Airlines.blogspot.in, 2009)/. Motivational environment The motivational initiatives taken at Emirates are very strong. The airline offers its employees a number of rewards for their exemplary work in the form of recognition, performance programmes and incentives, thus adhering to the basic tenets that enhance employee performance (Bamber, 2009). It does stay abreast with the best performers and makes every possible effort to retain and reward them so that they can build long-term careers with the airline. Effectiveness of the organizational communications In November 2013 Emirates won IdeasUK’s Golden Award for Organizational Suggestions which was given to it for its effective work systems that helped boost its employee morale and their participatory attitude. Even as Emirates ID is a suggestion-giving system, and Emirates employees submitted a number of effective ones, it was deemed as an outcome of its employees on account of airline’s effective internal communications systems. This is reflective of the airline's effective management keenness that helps it communicate with its employees efficiently and thus motivate them (Id.gov.ae. 2013). 4. Financial controlling With nearly 5 million employees, Emirates Airline notches approximately US$ 15.6 billion in annual revenues. A year ago it had placed orders for 233 more state-of-art aircraft valued at US$ 84 billion. With mammoth structure and revenues as this, the airline and the group has a finance controller to look after its financial segment that includes policies, procedures and even training to administrative and finance managers (Infotechaccountants.com, 2012). Government of Dubai, as mentioned above, owns the airline. Operational controls The airline operates throughout the clock in a dynamic environment. The operations are coordinated through a Network Control Center, which is overseen by the vice president supported by duty operation and senior network control mangers. Network systems All operations of the airline are equipped with the latest network systems but the most ambitious one has been its use of OnAir on 90 of its A380 airliners, which began operations in 2011. This enables use of laptops and mobile phones on-board for messaging and internet purposes. 5 Innovative managerial practice evaluation Many of its past managerial practices have revolved around its branding. Particularly it has changed its slogans continuously since 2004; each aimed at giving it an image-makeover and a new segment to tap. Fly Emirates was its slogan in 2004; in 2008 it was Fly Emirates. Keep Discovering and at other times there were many more like When Was the Last Time You Did Something for the First Time. Fly Emirates, Emirates. The Finest in the Sky, Be Good to Yourself. Fly Emirates, and Hello Tomorrow. This is very innovative and draws attention of passengers to an airline one more time if it had slipped their minds, or they had drifted away from it. Changing slogans is an innovative way of refurbishing a brand's image and increasing its recall value. Entrepreneurship and ethical dilemmas Such practices are an offshoot of entrepreneurship as they allow for some experimentation but the greatest ethical dilemmas faced in such decisions are shrouded in the fact that they are highly risk-ridden. My interest joining the organisation Yes, I will be more than interested to join Emirates Airline. It is because it is so diverse and yet so humane; two factors that I feel will provide me fuel to the passion that I have for working in such environment. References Bamber, G.J., Gittell, J.H., Kochan, T.A. & von Nordenflytch, A. (2009). "chapter 5". Up in the Air: How Airlines Can Improve Performance by Engaging their Employees. Cornell University Press, Ithaca. Doganis, R. (2002). Flying off course: the economics of international airlines. 3rd ed. New York: Routledge. Emirates.com. (2013). Qantas Partnership. Available http://www.emirates.com/in/english/plan_book/qantas-partnership/index.aspx. Accessed December 12, 2013. IATA.org. (2012). CEO Interview: Emirates Airline Make it Happen Attitude. Available http://www.iata.org/publications/airlines-international/june-2012/Pages/ceo-interview-emirates.aspx. Accessed December 12, 2013 Id.gov.ae. (2013). Emirates ID wins IdeasUK’s Golden Award for Organizational Suggestions. Available http://www.id.gov.ae/en/media-centre/news/2013/11/16/emirates-id-wins-ideasuks-golden-award-for-organizational-suggestions.aspx. Accessed December 12, 2013. Infotechaccountants.com. (2012). Finance Controller (Risk And Knowledge Management) - Emirates Airline & Group. Available http://infotechaccountants.com/forums/archive/index.php/t-67384.html. Accessed December 12, 2013. Lamb, R. (1984). Boyden Competitive strategic management. Englewood Cliffs, NJ, Prentice-Hall. Maier, M. (2005). Rise of the Emirates Empire. Available http://money.cnn.com/magazines/business2/business2_archive/2005/10/01/8359251/index.htm. Accessed December 12, 2013. Misho. (2010). Emirates Airline. Available http://www.scribd.com/doc/32216217/Emirates-Airlines. Accessed December 12, 2013. O'Reilly, L. (2012). Emirates introduces new brand positioning. Available http://www.marketingweek.co.uk/news/emirates-introduces-new-brand-positioning/4000869.article. Accessed December 12, 2013. Open Sky. (2009). Welcome. Competition - who cares. Available http://content.emirates.com/downloads/ek/pdfs/open_sky/Feb2009.pdf. Accessed December 12, 2013. Palmer, R., et al. (2006). Managing Marketing Performance. Edinburgh: Butterworth- Heinemann. TheEmiratesGroup.com. (nd). Leadership: The senior management team. Available http://www.theemiratesgroup.com/english/our-company/leadership/leadership.aspx. Accessed December 12, 2013. TheekSource. com. (nd). Emirates History. Available http://www.theeksource.com/emirateshistory.html. Accessed December 12, 2013. 1Airlines.blogspot.in. (2009). Emirates Employee Benefits. Available http://1airlines.blogspot.in/2008/12/emirates-employee-benefits.html. Accessed December 12, 2013. Read More