Emirates Airlines - Research Paper Example

Emirates Airlines Table of Contents Innovation and Strategic Position of Emirates Airlines 2 Opportunities and Challenges 3 Financial Performance of Emirates Airlines 3 Marketing Strategy 4 Summary of the Conducted Interview 5 Marketing Success of Emirates Airlines 5 Conclusion 6 Works Cited 7 Introduction ‘Emirates’ is an airline which is based in Dubai, United Arab Emirates (UAE). It is the largest international carrier in the world. ‘Emirates’ is also recognized for the biggest airline in terms of fleet size passengers’ carried and revenue in the Middle East. The airline has received over 400 global awards for its excellence since the time it has been launched. Emirates accounts for 40% of total flight movement in as well as out of the Dubai Airport (“Emirates Group Careers”). The paper will focus on the strategic position as well as challenges and opportunities for Emirates. It will highlight how the airline has coped up with the economic downturn. It will also focus on the financial performance of Emirates by taking into consideration the marketing strategy and success of the company. Innovation and Strategic Position of Emirates Airlines In terms of innovation, it is the first airline which has introduced “Audio Video on Demand” for their passengers in all the classes. It remains first in terms of introducing the in-flight calling and the concept of on-board spa. Emirates Airlines is also known as the first airline which has initiated the internet and Wi-Fi facility inside the flight. The product offering of Emirates Airlines includes ‘ICE’ package (“Emirates Group Careers”). Information: Allows the customers to remain updated with the current news from BBC website. It also enables them to take a vision from the external cameras of aircraft. Communication: Enables the passengers to contact anyone via mail, SMS and phone call. Entertainment: The passengers can watch their favorite shows and also can play games. Due to introducing innovation in its operation and providing various facilities, Emirates Airlines is regarded as the prestigious company in the developed as well as emerging market. It is regarded as a fierce competitor especially in the premium sector because it is leading the airline segment (“Emirates Group Careers”). The company has coped up with the economic downturn by improving its efficiencies as well as by introducing innovations in its operations (“Emirates”). Opportunities and Challenges Opportunities: Emirates Airlines is incessantly innovative and due to the advancement in its technology, it is making excessive profit. Its association with Qantas enables them to draw more Australian passengers. The customers are highly satisfied with its service and it provides opportunity to Emirates Airlines to become a recognized brand. Introduction of new services and technology provides opportunity to them to present its offerings to the emerging markets like Brazil and Europe (Annual Report 15-17). Challenges: Augmentation in the prices of oil will affect its profit. The terrorist attacks as well as the unbalanced political conditions will decrease its total number of flights. The unbalanced political condition forces them to collect low revenue especially from the Middle East, America and Africa (Evans 238). Financial Performance of Emirates Airlines Net Profit Ratio Analysis Formula 2015 2014 Revenue 86,728 80,717 Net profit 4728 3417 Net profit ratio (Net profit / revenue) *100 5.45 4.23 (Source: Author’s Creation) The net profit ratio of Emirates Airlines has increased from 4.23% to 5.45% in the year 2015. It indicates that they efficiently manage their business operations as it is an appropriate tool which measures the entire profitability of a company (Mohana 134). Current Ratio Analysis Current assets 27735 27354 Current liabilities 34481 32428 Current ratio Current assets/current liabilities 0.80 0.84 (Source: Author’s Creation) The current ratio of Emirates Airlines is almost similar in both the years. It has slightly decreased from 0.84 in 2014 to 0.80 in 2015. It reflects that they will face little difficulty in paying its liability of short term (Gitman and McDaniel 291). Asset Turnover Ratio Analysis Formula 2015 2014 Sales 86,728 80,717 Total assets 111362 101604 Asset turnover ratio Sales/Total assets 0.78 0.79 (Source: Author’s Creation) Above figure reflects that the company is quite efficiently managing its assets in order to generate or make sales because the ratio has not decreased to a great extent from the previous year. It is almost similar in both the years. It further signifies that Emirates Airlines is using its entire assets in a better way (Robinson et al 319). Marketing Strategy Emirates Airlines adopted product strategy by providing exclusive product features like reliability and comfort to the customers. It offers special onboard lounges, private suites, in-flight Wi-Fi facility and shower spas (“Emirates”). As it is a premium airline, so, it mainly target corporate and upper middle class. To draw more customers, it provides first class service including leisure and entertainment facilities. One of its strategies includes cutting costs as well as saving time. It is known for its punctuality (Evans 232). The company has adopted ‘pick and mix’ and ‘value-added’ pricing strategy. Its pricing is higher than most of its competitors, but then also, it has decided to pick the premium fare for its passengers because it provides exclusive facility and has a niche in this segment. Through its value-added service, the company justifies the premium pricing adopted by them (Evans 234).The promotional strategy adopted by Emirates Airlines includes releasing various multimedia advertisements especially under its taglines. It also includes in-flight promotion and advertising practice (Evans 235). Summary of the Conducted Interview Emirates Airlines gives more importance on the experience of its passengers by providing extraordinary facility inside the flight. It is viewed as the first flight which has introduced ‘now-common seatback’ system of providing entertainment and relaxation. In its initial fiscal year only, the company became profitable by engaging the primary three aircrafts to India. The company reinvested its profit of first year with an objective of growing the fleet and brand. This enabled them to take benefit of their base location. With a present valuation of almost $58 billion, the company attracts 120,000 applicants each week. Emirates Airlines has grown its business from three used aircrafts to 145 Boeing 777s and 61 Airbus A380s. This reflects the success and growth of Emirates Airlines. The company enjoys its success because of its effective and risky business model. This proves that the company constantly strives to do extremely well in the airline segment. They have also adopted the proactive approach in order to ensure the safety of its employees. It includes providing training to the staff to deal with the everyday strain of the long-journey flights. The company has also initiated the ‘3-D hydraulic system’ which lowered and raised the mockup in order to simulate severe to moderate turbulence. Marketing Success of Emirates Airlines Emirates Airlines is the first airline which has offered private suites and initiated placing personal video in its business, ecomomic, as well as first class. It is the first which has ordered Airbus A380 and to have the on-board showers. The company has the main or largest order of B777-300s, A350s and A380s. The factors which led to the success of Emirates Airlines are reliability, safety, frequency, seat availability, in-flight cabin service, etc. It provides the facility of e-booking of tickets for customer convenience and in this way it adds value to the customer experience. Further, it comes with more than 1000 channels especially on demand and is the leading premium airline. Its achievement shows that it is a threat to other main airlines because other major airlines have not experienced such achievements as Emirates Airlines does. Other airlines cut their fares to attract more passengers but Emirates Airlines does not lower its price, instead, it keeps the premium pricing because the company knows that the number of passengers will not be reduced as it offers excellent service inside the flight (Evans 232-238). Conclusion The paper highlights the marketing strategy and innovations of Emirates Airlines which has allowed the company to attain success and growth in the airline segment. It has also laid emphasis on the challenges as well as opportunities for the company. It is regarded as the prestigious airline in the emerging market because it is leading the airline segment by offering extraordinary services. The ratio analysis shows the good profitability position of the company and also reflects that they are utilizing their assets efficiently. The product offering of Emirates Airlines includes ‘ICE’ package which provides enough entertainment facility to the passengers. The passengers are having excellent experience with the Emirates Airlines. Works Cited Annual Report. The Emirates Group Annual Report 2014-15. The Emirate Group, 2015. Web. 18 June 2015. Emirates. Emirates Group Posts 21st Consecutive Year of Profit in 2008-09. Emirates, May 2009. Web. 18 June 2015. Emirates. Flying with Emirates. Emirates, 2015. Web. 18 June 2015. Emirates Group Careers. Emirates. The Emirates Group, 2015a. Web. 18 June 2015. Emirates Group Careers. Our Innovation. The Emirates Group, 2015b. Web. 18 June 2015. Evans, Nigel. "Collaborative strategy: An analysis of the changing world of international airline alliances." Tourism management 22.3 (2001): 229-243. Print. Gitman, Lawrence, and Carl McDaniel. The Future of Business: The Essentials. Boston: Cengage Learning, 2007. Print. Mohana, Rao Peddina. Financial Statement Analysis and Reporting. New Delhi: PHI Learning Pvt. Ltd., 2011. Print. Robinson, Thomas R, Elaine Henry, Wendy L Pirie, and Michael A Broihahn. International Financial Statement Analysis. New Jersey: John Wiley & Sons, 2015. Print. Read More