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Airline marketing - Research Proposal Example

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Emirate airlines (Milmo et al.) Background Emirates Airlines (EA) is one of the prominent airliners in the world at present. It is owned and administered by the royal family members of the Dubai administration. Headquartered in Dubai and started in 1985, Emirates Airlines is operating in more than 55 countries and to 77 destinations…
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Airline marketing

Download file to see previous pages... In fact, Dubai is known as the business hub of Middle East. Even though Dubai witnessed rapid growths during the latter part of twentieth century, a national airliner was a dream until 1985, despite having an excellent airport. Dubai had been used as the stopover on routes between Europe and Far East during the 70’s and early part of 80’s. The business savvy Dubai royal family has realized potential of airline business during this period and they decided to exploit it. Thus the initial works for the formation of the company EA has started in 1985. ”Because of Dubai's unique political structure, Emirates could be described as both government-owned and privately held, though most considered it state-owned. It was required to operate independent of government subsidies, however, apart from $10 million in start-up capital” (The Emirates Group History). It is difficult to consider EA as a private or public company because of the unique political and administration system prevails in Dubai. The royal family is responsible for Dubai administration and at the same time, they are engaged in many other private businesses like EA. In 1974, three years after independence, the rulers of the UAE decided to establish a joint flag carrier: Gulf Air. However, a tense relationship between the airline and the Dubai government existed ever since its inception, as the latter re fused to give in to Gulf Air’s demands to abandon its open-skies policy. In reaction, Gulf Air reduced frequencies and capacities to and from Dubai by more than two thirds between 1984 and 1985 without advance notice. Since foreign carriers proved unable or unwilling to fill the gap, Dubai’s then ruler, Sheik Mohammed bin Rashid Al-Maktoum, convened a team of experts – headed by Maurice Flanagan and later joined by Tim Clark and the ruler’s then 26- year old son, Sheik Ahmed bin Saeed Al-Maktoum – to devise an emergency plan. The group’s recommendation to set up a home carrier for Dubai was quickly accepted by the ruler, but he imposed two conditions: The new airline should meet the highest quality standards and there would be no additional capital injections from the government other than the agreed USD 10 million start-up capital (Knorr and Eisenkopf, p.1). EA was formed in 1985 under the chairmanship of Sheikh Ahmed bin Saeed Al Maktoum, the nephew of the ruler of Dubai. Maurice Flanagan has taken charge as the managing director of the new airline. The first Emirates flight took off on October 25, 1985, from Dubai to Karachi. “Thereafter, Emirates Airlines reached Delhi and Mumbai. The airline launched services to Colombo, Chaka, Amman and Cairo in 1986. It kicked off non-stop services to London Gatwick in 1987 and also added Frankfurt, Singapore and Male to its network later on” (Emirates Airlines). Within nine months from the beginning operation, EA became profitable. Even though chairman Sheikh Ahmed bin Saeed Al Maktoum was only 27 years of age at the time, of taking charge of the airliner, he succeeded in converting EA into one of the most prominent airliner in the business with the company of Maurice Flanagan. As mentioned earlier, the differences with Gulf Air, motivated the Royal Family of Dubai to give take the growth of EA as a challenge. The Royal family allotted lavish funds for the initial expenditure, and took the growth of EA ...Download file to see next pagesRead More
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