The Dubai-based, Emirates Airlines (“Emirates”) is one the fastest growing airlines in the world catering to the growing international passenger travel industry. Its mission is to ‘connect people to places and business with opportunities’. The airline has one of the largest global route network and traffic scale of any carrier, currently flying to 144 destinations including 10 US destinations. In the 2014-2015 financial fiscal year, Emirates reported revenue of AED 88.8 billion (USD 24.2 B), a 7.5% increase year-over-year, with profit margin of 5.1% versus 3.9% the year prior. It also transported 49.3 million passengers, an 11% increase year-over-year, while increasing its capacity by 9%. The airline has had over 25 consecutive years of sustained growth and positive margin in an industry that is regarded as highly cyclical and competitive. Its success lies in being able to provide best-in-class service at competitive prices, attracting both passengers traveling to Dubai for tourism and business, as well as those traveling on inter-continental flights by taking advantage of Dubai’s geographic location (Figure 1).
Figure 1. Emirates’ global destination network (http://www.emirates.com/us/english/destinations/)
A key enabler of Emirates success is the effective alignment between its business and operating models as detailed below.
Emirates has one of the most cost-efficient operations in the airline industry giving it a competitive advantage. It has a lean workforce comparable to that of low-cost carriers and has a flat organization that keeps overhead costs low. However, the key cornerstones to its cost-efficient operations are: i) increasing passenger capacity by offering daily flights to almost all of its short and long-haul high-demand destinations, keeping fixed-costs low, and ii) only operating wide-body carriers in its fleet, allowing Emirates to have higher passenger capacity per flight, thus lowering its overall unit-cost versus other airlines that operate a mix of wide- and narrow-body carriers. Another benefit of wide-body airplanes is that it they are more fuel efficient contributing to Emirates low cost position.
Investing in its fleet
Emirates continually invests in growing its fleet. It currently consists of 231 aircrafts including Airbus A340 and Boeing 777. It plans to increase its fleet to 320 aircrafts by 2018 and 400 aircrafts by 2020. In addition, it has the largest fleet of Airbus A-380, the world’s largest commercial aircraft, with 68 A-380s currently in operation and 72 new A-380s on order. It invests in maintaining its fleet with the most modern aircrafts, while retiring its older planes. The average age of its airplanes is 6.25 years, making it the youngest fleet of any airline, allowing Emirates to provide customers with the newest technologies and better in-flight experience. Furthermore, it allows them to operate the newer, more fuel efficient airplanes again contributing to Emirates low-cost position.
Offering superior travel experience
In order to create a holistic travel experience for its customers, Emirates focusses on providing a number of best-in-class services both off- and onboard. Starting with getting to and from the airport, Emirates offers free Chauffer-drive shuttle service in 74 cities for First and Business class passengers. Next, they have invested $320 million in 37 Emirates (airport) Lounges around the world, where customers can dine or relax before traveling. Next, onboard Emirates offers its passengers 2100 channels of entertainment in 35 languages through in its award-winning ‘ICE’ entertainment system which offers the latest movies, music and games. They also invest $20 million annually to install and maintain free onboard Wi-Fi internet services across its fleet. And finally, its award-winning Skywards miles reward program offers members exclusive benefits such as faster check-in and airport ushering services, and very regular upgrades to Business and First class cabins. Frequent flyer points are easy to collect making Skywards membership an attractive differentiator.
Diverse flight attendants
In order to serve its international passengers across six continents, Emirates employs a diverse workforce of 56,000 employees of which over a fifth are cabin crew attendants from over 160 nationalities. It is not uncommon to have a cabin-crew team speak more than ten different languages on any given flight. This serves well to cater to the diverse customer base traveling with Emirates. The airline actively recruits talent from around the world to work for Emirates. For instance, in 2014-2015 Emirates had over 400,000 applications from around the world, allowing it to recruit the best talent from a large candidate pool. Once hired, all Emirates cabin crew undergo regular training at state-of-the-art Emirates Aviation College to ensure learnings of providing the finest service for passengers.