Ali's Profile

One ripe area that Bayern is trying to leverage to maintain its dominance is analytics. Sports analytics have taken most American sports by storm. Starting from the Oakland Athletics kicking off the “Moneyball” era in baseball, most team in the MLB, NBA, and to a lesser extent the NFL, now invest in analytics efforts to gain a competitive advantage. The soccer world has been slower to join the bandwagon, and for a variety of reasons. One reason is the ubiquity of data (or lack thereof) in soccer. Since baseball consists of so many events on a yearly basis (teams play 162 games, with players making multiple plate appearances each game), that provides enough evidence to conduct all types of data analytics. On the other hand, “events” in soccer are less ubiquitous, and more interdependent (as opposed to baseball, where performances of players are much more independent from other players). This makes soccer more difficult to analyze. However, Bayern, and the coaches they choose (currently Guardiola) have been among the first adopters in soccer, and have an opportunity to be leaders in this field.

Just to add on to this — I’m very interested to see how Emirates will hold up as its two equally financially-capable competitors in the Middle East–Qatar Airways and Etihad (based on Doha and Abu Dhabi, respectively) ramp up their efforts to displace Emirates as the main carrier in the Middle East.

I’ve been a loyal customer of Emirates for 3 years now (100+ flights), and I agree with the comments made above. Emirates is the opposite of a budget airline. Their selling point is their premium product, and their premium service. They win over their customers with their “wow” factor. That includes their new airplanes (flying business/first class on the A380 is an absolute treat—showers and heated bathroom floors in first class, open bar lounge with couches in the upper deck, etc.), Terminal 3 at DXB (with its first and business class lounges), and free limos picking up business and first class passengers to and from airports. They pay great attention to detail to the customer journey, especially with their highest paying customers.

Another product that has helped Emirates is their frequent flyer program (partnering with Qantas) which is aligned with their business model. Emirates’ program, Skywards, benefits from the vast network that Emirates covers globally, making it worthwhile for any customer to join. They have four tiers that they publicly advertise—blue, silver, gold, and platinum, and an invitation-only (IO) tier for most frequent flyers (it’s very hard to get there, we’re talking >500,000 miles/year). I’ve had the fortune of accompanying an IO member on a flight from Rome to Dubai once. We were driven in a Mercedes from the hotel to the airport. When we reached the airport, we were taken through a backdoor where someone checked our passports and gave us boarding passes, and within 5 minutes we were in the first class lounge. We were the first passengers to board the plane (just as flight attendants themselves were boarding), and were the first passengers to be let off the plane when landing, when a golf cart was waiting for us right outside the aircraft to take us to passport control. Emirates never fails to “wow” its customers, especially their best paying ones.

This is a great example of a company whose overall strategy is perfectly aligned with its operating model. Tradeoffs that may seem negative at face value (e.g. not offering flights through 3rd party sites likely causes them to lose some business) end up working out well for them (they can offer cheaper tickets because they don’t sell through intermediaries). Plenty of other budget airlines around the world use similar business models (e.g. FlyDubai and Air Arabia in the UAE).

One of those tradeoffs that I found interesting was their choice to operate only one type of aircraft, the Boeing 737. I definitely see the cost upside there, e.g. same maintenance, same training, interchangeability of aircrafts across routes, etc. However, I wonder if that limits Southwest’s ability to operate certain short/unpopular routes. The 737s that Southwest operates typically seat 143-175 passengers. I’m not sure what is the breakeven number of passengers per flight, but I have to assume that they cannot profitably operate certain less popular routes because they don’t have smaller aircrafts.