Is there any strategy?

It was amazing, when I read the news in November last year that Emirates have placed an order for an additional 50 Boeing 777-300 ER" planes, in addition to 20 Boeing 777-300ER as an option. This order was the single largest dollar-value order in Boeing's history.

According to emirates Group chairman ‘Emirates is financially strong enough to fund the purchase of new aircraft as part of ongoing expansion plans by one of the world’s fastest growing airlines. Emirates made net profits of Dh827 million in the first half of 2011, confirming its status as ‘one of the fastest growing carriers’.

In the current recession scenario when many airline companies are in either loss or debt what’s made Emirates so different from other airlines?


Emirates Airlines was established in 1985 by Dubai Government with just two aircrafts. Today Emirates has 157 aircrafts with 114 destinations and 33,480 employees all around the globe. Emirates CEO Sheikh Ahmed holds many important portfolios with the Government of Dubai (Member of the Board of the Dubai Council for Economic Affairs and Corporation for Government Investment, Vice-Chairman of the Dubai World Trade Centre etc.) apart from being son of former Ruler of Dubai Sheikh Saeed and uncle of the current Ruler of Dubai Sheikh Mohammed.

According to Emirates Annual Report 2010-2011 ; the gross revenue for the Emirates Group rose 26% to US$15.6 billion. And Net profit climbed to US$1.6 billion, an outstanding 43% jump over 2009-10. Report also claims that the aircraft purchase was not made on speculations but will fill a strategic point in expanding their global network. And 2011-12 they plan to boost the international long-haul flights.

How does Porter’s 5 Force model works for Emirates

1. Threat of New Entrants: Comparatively lessBecause of huge Capital investment Requirements and it's own  established brands


2. Bargaining Power of Suppliers: High
   As The airline industry has limited suppliers globally; they have a control on the market due to the huge demand of their manufactured products


3. Bargaining Power of Buyers: High
   the power of the buyers in this industry is strong as there are millions of passengers, the switching costs are low and passengers have many


4. Threat of a Substitute Products or Services: Region dependent
   It's high in Europe (countries linked by high speed trains, low cost airlines) and comparatively lower in rest of the world


5. Rivalry among existing companies: HighVariety of airline companies that provides best aircrafts and services to passengers.

How KSF (Key Success factors) model works for Emirates

Identify Demand	Surviving competition
Purchasing more aircrafts Opening more routes and destinations Flyer mile facility and discounts	Differentiation: e-tickets, wide seats, good food Relations with supplier: the single largest dollar-value order in Boeing's history Legally all forms of strikes are banned in the UAE

Here some interesting claims and accusations

Emirates	Other airline companies
Emirates operates all wide-body fleets, resulting in lower unit costs compared to other airlines operating mixed range (narrow- and wide-body fleets)	Many airlines have accused Emirates of receiving fuel subsidies from the Government of Dubai.
Emirates lean workforce compared to other airlines allows them to maintain low overhead costs.	Many competitor accusations claiming that Emirates pays discounted airport user charges at its home base and also having an unfair advantage, since it does not have to pay local taxes.
Emirates claims to give best possible tools and facilities to their employs also supported by their staff expenditure presented in their financial statement	Some airlines have claimed that being based in Dubai gives Emirates an unfair labour cost advantage over other airlines.