Emirates Sky Cargo - Promoting Tourism, Customer Services, Planning and Financing Activities - Case Study Example

Emirates Sky Cargo Name: Institution: Emirates Air Cargo TABLE OF CONTENTS Executive Summary 3 Introduction 3 Logistics and Cargo Operations 3 Commercial Operations 5 Role of Emirates Sky Cargo in Promoting Tourism 5 Planning Activities 6 Global Opportunities Offered by Emirates Sky Cargo 7 Financing Activities 7 Customer Services of Emirates Sky Cargo 8 Summary 8 References 10 Executive Summary This paper presents the current status of Emirates Fly Cargo Airlines by investigating the activities of the airline such as operational activities, its organization of flights and the role it plays in contributing to the economy of Dubai. It is also provides an investigation of commercial operations of the airlines in terms of the ticketing structure and how pricing is determined. The paper also illustrates the role of the airline in promoting tourism by enhancing comfortable transport to various tourism destinations. The paper also investigates the market research activities and its efforts to promote global performance. It also illustrates the financial position of the airline in terms of its financial expenditures. Introduction An Emirate Sky Cargo is, as the name suggests, is a cargo airline headquartered in Dubai, United Arab Emirates. It is the primary air freight division of the Emirates Airline and one of the key anchor cargo airlines for Al Makhtoum International Airline. It is a subsidiary of the Emirates Airline which is fully owned by the government of Dubai under the Investment Corporation of Dubai.In 1993, an agreement was signed between Emirates Sky Cargo and EC International to handle all cargo shipments from America to 24 countries served by Emirates that were spread out between Europe, the Fare East, the Middle East and much of the Indian sub-continent (Banerjee, 2013). Emirates Sky Cargo's state of the art new freight terminal is located at the Logistics District in Dubai South. It was officially inaugurated in November 2015, in a grand ceremony officiated by the Chairman of Emirates Airline and group, His Highness Sheikh Ahmed bin Saeed Al Maktoum. The launch of the new freight terminal marked another key milestone for the Emirates group, further entrenching its status as Dubai's leading global air, logistics and cargo hub (Budd & Ison, 2015). The new freight terminal, named Emirates Sky Central is the home of 15 freighter aircraft that is part of Sky Cargo's fleet, and was opened on the sidelines of the Dubai Air Show. The space occupied by Emirates Sky Central is part of a much bigger parcel of land allocated to Emirates Sky Cargo in Dubai South. This land has great potential and ESC envisages that it can develop the land over time to increase its cargo handling capacity from the current 2.3 million tonnes to over 12 million tonnes in line with their 2050 vision.The Emirates Sky Central freight terminal is located about 77kilometres from Dubai International Airline. This is an ideal location since most factories and forwarding agencies are located in this location. In addition, the South Dubai area in which it is located is in close proximity to the Jebel Ali Port and the Free Zone which are areas of key cargo interest. Logistics and Cargo Operations Emirates Sky Cargo employs a dual operation of belly hold cargo approach, which essentially means that cargo being managed at its Cargo managed at the Mega Terminal located at Dubai International as well as freighter cargo at DWC...is moved by truck on a daily basis between the two airlines via an interlinked virtual corridor. Since the operationalization of the terminal, the movement of cargo has been a mostly flawless process that is now firmly integrated into its operations (da Silva, 2014). Further, timeliness has also been prioritized and enhanced and the transit time of goods from their arrival to their departure from freighter to bellyhold is just five hours and vice versa. The safety of cargo is key to Emirates Sky Central and each of the trucks that ply the virtual corridor between the two airlines is equipped with satellite to ensure the safety and security of cargo and staff. In addition to this, the terminal boasts state of the art centralised screening mechanisms as well as police facilities (Hough, 2010). There are also cooling facilities that occupy 15,000 square metres and offers dedicated storage areas that enable the safe keeping of goods that require varying temperatures. The terminal also employs fully automated material handling and Quick dolly Transfer Systems that enable quick transfer of Unit Load Devices concurrently. Another key advantage of ESC's freighter facility is that it has 12 aircraft that positioned directly in front of the terminal and one of its main features is proximity to the docks, which helps enable the quick movement of goods. The main services of Emirates Sky cargo include: ground handling services such as the landing grounds for inbound airlines and technical support for the aircrafts used by the airline. Another logistical operation that has improved the state of the new terminal at the DWC is the existence of kiosks where passengers can buy various products that meet their personal needs while at the airport. The operators of the airport at the DWC has enhanced communication with the management of the Emirates Sky Cargo using modern technologies and most technical issues are likely to be addressed. This is likely to result into exciting travel experience for passengers. Equipment, Machinery and Technologies used at Emirates Sky Cargo at the Dubai World Central (DWC) There exist a number of technologies at the new terminal of Emirates Sky cargo at the Dubai World Central (DWC) that have enabled multiuse of gates by the airlines thus enabling the operations of a number of airlines at a time. This has provided the opportunities for Emirates Sky Cargo to operate in some of the major airports in the world. For instance, technologies such as conditioned air and electricity have enabled the airline to provide competent services to its customers (Robbins, 2015). Technology has been used to provide common services to all passengers at various levels during flight. For instance, Emirates Sky Cargo provides various forms of entertainment services using modern technologies. Technologies such as the internet are used to book tickets for flights online without the need to go to the airport (Kaabi, 2014). Another technology that has been used by the airline is the geographic information system that has ensured the operators of the airline are able to monitor the geographical location of their aircrafts and coordinate with the airport operators for safe landing and takeoff. The operations of Emirates Sky cargo has also been facilitated by the existence of particular forms of machinery. The counters where customers are served are well designed and the chances of delay in serving them have been a thing of the past (Budd & Ison, 2015). Off-gate parking has also been improved and there exist infrastructure closets and core rooms and the podiums are standardized thus enabling passengers to board the planes with little discomfort. The static language has been replaced with dynamic signage aimed at achieving common use. The main areas include counters and locations for ticketing. Way finding and other modes of communication between the passengers and the airline operators have been enhanced through coordination with the respective airports operators. Emirates Fly cargo has also been involved in the use of various technologies such as software to manage its operations. The software has been tested prior to implementation thus enabling the creation of a ‘unique’ platform (Nataraja & Al-Aali, 2011). This has enabled the airline modify its applications for the purpose of supporting specific installations. Commercial Operations While recession had an impact on the performance of the airline, it has been able to expand its operations through the provision of various flights and destinations, creating new offices and provision of online services to its customers. It has also been involved in close monitoring of the conditions under which it conducts its trading activities for the purpose of enhancing the customer’s ability to get value for their money (Kaabi, 2014). It has also promoted online sales that have been accessed by its customers on the site emirates.com. From the data on the website, it is found that a total of 896,838 bookings took place online in 2014 and the number of passengers booked each day was 9,244, showing an increase of 80% compared with 2013. The airline has also introduced a multicurrency pricing strategy during the pricing of the newly-created booking engine in addition to the pledge to provide its customers with the best price (Knorr & Eisenkopf, 2007). The airline has aimed enhancing its pricing strategy by providing the lowest price than any other airline in addition to the introduction of a Skywards Miles Improvements facility. There are constant maintenance of equipment that includes jet bridges and other systems that are required during the operation of airlines as well as during the need to enable the personnel to do their work. The new terminal at the DWC also has particular machinery that has enabled operations to be undertaken in an effective manner. For instance, ticket and gate counters are effective and have been constantly maintained. Additional ticket counters have been created thus enabling serving a significant number of passengers. The remodelling of the new terminal has accounted for service-level agreements involved in the maintenance activities and response periods have been incorporated to the current methods of response used. In addition, pre-departure notification was introduced by the airline that enables the passengers get the information through mobile phones, as well as booking various low-cost services offered by the airline. The Emirates Sky cargo has also opened new offices in Los Angeles, Muscat, Sanaa, Kuala Lumpur, Kuwait, Jakarta and Jedda. Worldwide, Emirates commercial contact centres are one of the busiest and receive more than 21 calls each minute and more than 83.5 percent of them are answered in 20 seconds (Nataraja & Al-Aali, 2011). In addition to creation of a centralised office for China in Guangzhou, the airline is involved in the making of exciting booking experience as well as promoting its efficiency. In addition, for customers who have limited access to the internet, the airline has installed self-service kiosks in Dubai in various retail hubs. Emirates Sky cargo airline has also introduced chauffeur-drive in Mumbai in India, Hyderabad and Damascus. Sky cargo has been able to surpass the four million mark for membership with new members enrolling in every 41 seconds. Terminal 3 at the Dubai International Airport incorporates economy class and also provides special check-ins (Robbins, 2015). Furthermore, Emirates Sky cargo has contributed to the provision of charity services for the purpose of promoting children’s welfare, provision of humanitarian medical services in developing countries and provision of relief during disaster. Furthermore, it has provided long-standing co-branded credit card in cooperation with Citibank UAE, it has launched a co-branded credit card with Emirates Bank and Standard Chartered Bank of India. Role of Emirates Sky Cargo in Promoting Tourism Emirates Sky Cargo has been involved in promotion of tourism. This is based on its ability to enhance the travelling activities for tourists at high levels of comfort. Both local and international tourists have been able to visit various attraction areas as a result of the contribution of Emirates Sky cargo to their transport needs. There has been increased tourism in various sites in Dubai due to availability of transport services at reduced costs (Banerjee, 2013). Emirates Destination and Leisure Management Division (D&LM) has been involved in the development and operation of various special facilities for travellers who undertake business activities as well as those involved in leisure travel, cruise passengers, and those who travel for the purposes of attending conferences. It has also provided air transport services for exhibitors and visitors who attend trade conferences in Dubai. It has also been involved in the promotion of awareness of Dubai both globally and in the Gulf region by providing special services such as Emirates Holiday, Congress Solutions International and Emirates Wolgan Valley Resort and Spa (Budd & Ison, 2015). In addition to the services provided by the Dubai government, Emirates group has also been involved in the development and sponsorships of Dubai Desert Conservation Reserve (DDCR) which is an organization that undertakes various campaigns aimed at preventing environmental degradation and destruction of natural habitats for wild animals. This has also promoted the development of tourism services in Dubai. The airline experienced a period of challenges due to global economic downturns as well as due to the shortage of rooms in the UAE in 2008, which resulted into a reduction in Arabian Adventures. Emirates Sky cargo holidays cared for an estimated 81,504 tourists with the major destinations being Dubai, Thailand and Maldives (da Silva, 2014). A Global Travel and Tourism Summit were attended by top executives from the travel and tourism industry under the arrangement of the CSI as a representative of World Travel and Tourism Council. There was continued development of Emirates Hotels and Resorts with international centre reservations, sales for corporate organizations and business institutions, in addition to a global online distribution system due to the impact of the modern technology. There are various resorts being constructed by Emirates in the effort to improve its investments objectives (Hough, 2010). For instance, there exists a 10-storey extension of the Emirates Holiday Building and the Arabian Adventures Operations centre located in Dubai Investments Park. The centre will be composed of a multi-storey car park that accommodates 400 cars and provides parking spaces for other vehicles such as buses. Planning Activities The planning and market activities have been identified as activities that wil be important in the accomplishment of the objectives of the airline and enhancing the efficiency of reaching target customers. Marketing research has also been identified to be important in determining the most competitive destinations. For instance, market research has been conducted to determine the competitiveness of markets in Brazil and the United States (Kaabi, 2014). This has resulted into the expansion of the networks of the airline into two more networks in the United States. For instance, Los Angeles is currently within the network of Emirates Sky Cargo. There has been planning activities to implement direct flights from Milan to Berlin and also to implement a direct flight from Paris to Nice in France. Planning activities have also involved ensuring the right arrangements are made that enhance customers’ departure and arrival at their destinations at the right times to avoid delays (Knorr & Eisenkopf, 2007). It has also been involved in enhancing the efficiency of service delivery to customers by enhancing provision of tickets and the storage of luggage and ensuring no damage or loss occurs. Global Opportunities Offered by Emirates Sky Cargo Emirates Sky cargo also provides professional and first class services to employees, customers and the general public. To ensure maintenance of service levels in various networks, the airline management recruits the most talented individuals from various parts of the world to undergo training so that they can join the workforce and contribute to the achievement of the objectives of the airline (Nataraja & Al-Aali, 2011). Presently, Emirates Sky cargo is involved in the provision of career opportunities in a number of global locations and in a range of disciplines. The recruitment department is focused on finding individuals who are focused on the needs of customers as well as those who can operate as a team to achieve the objectives of enhancing service quality and attainment of its goals. The airline management is involved in finding individuals who are focused on the needs of customers as well as those who have excellent communication skills and the competence to handle continuously changing environment (Robbins, 2015). The main areas where applications for office networks are provided include: cargo, finance, engineering and secretarial and administrative duties. In other regions, Emirates Sky cargo is involved in the provision of Contact centre, such as Skywards support, for the purpose of promoting support to passengers. The main areas where contact centres are located include: Manchester, Johannesburg, Melbourne, Guangzhou and Mumbai (Banerjee, 2013). Those who are interested in any of the above exciting careers are required to complete an online application form and filling up the areas about personal information and the course selected. The airline management is involved in enrolling qualified applicants to the courses and providing them with employment opportunities upon completing them. Financing Activities The airline has invested significantly in various activities and its total investments in 2014 were estimated to be AED 9,717 million. The group has also invested surplus funds in equities in banks and liquidity funds. The interest obtained from its activities is used to improve the existing facilities (Budd & Ison, 2015). It is estimated that the cash position of the emirates such as held-to-maturity cash in 2014 was estimated to be AED 200 million in comparison with AED 12,618 in 2013. Cash recording has been done after subtraction of capital outflows of AED 5.839 that was composed of pre-delivery expenditures, purchase of spare engines, rotables, and the construction of other capital items in addition to payments of dividends to shareholders which amounted to AED 3,003 in 2014 (da Silva, 2014). The resulting Emirates cash balance was adequate to address its traditional benchmark of enhancing cash balances for not less than six months debt requirements and lease rentals. In the same financial period, it was observed that Emirates Sky cargo delivered 21 aircrafts, 17 were obtained from Boeing while 4 from Airbus. In spite of the difficult environment, it was possible to raise nearly USD 2.6 billion in the same financial year for the purpose of financing aircraft deliveries by implementing s12 different financing structures. This shows the level of support that Emirates Sky cargo received from international financial organizations (Hough, 2010). The delivery of airbus was composed of the first 4 twin deck A380 aircraft out of the 58 units that were ordered. These purchases were funded by organizations such as the Dubai International Financial Center (DIFC). The purchase of 6 Boeing aircrafts was under the funding of US EX-Im Bank support, that were acquired through operative leases and lease back transactions and the involvement of Islamic leases that participated in the international financial service provisions. Emirates Sky cargo has continued with its efforts to target a balanced portfolio approach, while taking advantage of movements in the market and hedging around at lower levels and interest swap options (Kaabi, 2014). The borrowings and lease liabilities of the Emirates Sky cargo after the inclusion of operating leases in 2014 was composed of 61% on a fixed rate of interest and a balance of 39% on a floating rate of interest. Emirates Sky cargo has also managed its currency exposure by applying prudent hedging solutions such as currency swaps, and the use of natural hedges that are dominated by Pound sterling, and Japanese yen. Customer Services of Emirates Sky Cargo The airline has continued to decentralise its provision of customer services by creating offices in Johannesburg, Osaka and Hong Kong, resulting into the creation of additional network of airlines to the existing ones such as those in America and the United States (Nataraja & Al-Aali, 2011). Due to reorganization, there has been a 50 per cent improvement in the handling of complaints in Dubai and in various networks thus enabling provision of customer services and addressing their concerns. As a result of increasing customer services improvements, there has been a reduction in baggage claims processing durations by 66 per cent. There are plans underway aimed at developing and training developments plans aimed at improving skills and knowledge, that will be enhanced by focused knowledge Portal that ensures a better share of information and data that is important for the operation of the airline globally (Robbins, 2015). The airline is also committed towards improving customer’s services through demonstration of empathetic and caring customer service in dealing with different situations that need to be met to achieve the goal of customer satisfaction. To promote its reputation, the airline has enhanced auditing of its activities and involvement in monitoring its products and services for the purpose of promoting customer service as well as complying with quality standards for airlines. There have been efforts aimed at evaluating the manner in which customer service team conducts its activities and meet the expectations of the airlines as well as the set standards. The process is likely to grow with the addition of more routes, products and destinations (Kaabi, 2014). There is the continued expansion of programs and all elements of customer such as Airport Services and Service delivery services. In addition, there will be 500 audits on Emirates Sky Cargo flights in addition to 200 call centres in various parts of the world, with the three main audits in Dubai International Airport. Summary This paper illustrates the current state of Emirates Air cargo and its competitiveness in the provision of air transport services. The paper provides the historical background of the Emirates Air Cargo and the present new flight terminal that has been created for the purpose of expanding its activities. It is found that it has the same competence as any other airline and has wide networks of destinations to almost all parts of the world. The paper also illustrates that Emirates Sky Cargo has the objective of enhancing comfortable flight as well as providing the passengers with existing experience in a similar manner as other leading airlines. It is dedicated to improving materials handling processes through automation and enhancing safety of cargo belonging to its passengers. Another area that this paper covers is the involvement of ESK in various commercial activities such as providing fair pricing for its customers and increasing their access to booking of flights. It has also implemented latest technologies for departure notification such as the use of mobile phones to get notifications about departures. It has also been illustrated that Emirates Sky Cargo has promoted local and international tourism in Dubai by enhancing the travelling activities of tourists to various destinations. It has also championed environmental and natural habitat conservation efforts which promote tourism. While the airline has been affected by the global economic crisis that affected various countries, it has been involved in efforts to enhance its provision of products and services and improving its competitiveness and profitability. The main planning and market research activities for the airline have been the identification of new networks in Brazil and the United States. It has also intensified its efforts to enable direct flights between various destinations. The airline has also been involved in the provision of career opportunities for various individuals who have the interest in working with it, thus promoting the welfare of the community. It has also enhanced its customer services by addressing their concerns and ensuring their needs are addressed. Due to these activities and operational organization of Emirates Sky Cargo Airlines, it is concluded that it is in a better position to compete favourably in the airline industry and improve its profitability. References Banerjee, A. (2013). Emirates airlines-An exploratory study. ZENITH International Journal of Business Economics & Management Research, 3(5), 133-141. Budd, L., & Ison, S. (2015). 10 Air cargo mobilities. Cargomobilities: Moving Materials in a Global Age, 163. da Silva, J. N. V. (2014). Analysis of passenger airlines’ cargo business models. Hough, B. (2010). Emirates Airline: the pride of Dubai. Airliners (Miami, Fla.), 23(3). Kaabi, K. A. S. (2014). 3 The air transport system of United Arab Emirates during the global financial crisis and Arab Spring. Airports, Cities and Regions, 47. Knorr, A., & Eisenkopf, A. (2007). How sustainable is Emirates’ business model. Aerlines Magazine, 38. Nataraja, S., & Al-Aali, A. (2011). The exceptional performance strategies of Emirate Airlines. Competitiveness Review: An International Business Journal, 21(5), 471-486. Robbins, G. (2015). The Dube TradePort-King Shaka International Airport mega-project: Exploring impacts in the context of multi-scalar governance processes. Habitat International, 45, 196-204. Read More