Therefore,EmiratesAirlinesisakeyplayerintheairlineindustry.Inadditiontoitsvastoperations,theairlineisrenownedforitsluxuryservices,whichsetitapartfromotherairlinecompetitors.Thissectionwillreviewthecompany’svisionandmissionstatement,aswellasitsbusinessmodel.Theevaluationaimstoconfirmthatthecompany’sstrategyguaranteessustainabilityintheendasencompassedintheAirTransportActionGroup(ATAG)2030aviationplan.
ThesourcesthathavebeenusedinthispaperweresearchedfromcredibledatabasessuchasEBSCOhostandwebsitesthatcontainedsubstantialinformationaboutthecompanyunderstudy.KeywordsandphrasesthatwereusedincludeEmiratesAirline,EmiratesGroup,sustainability,EmiratesAirline’ssustainability,competitors,andconflictintheMiddleEast.
ATAGisaninternationalassociationthataimstopromotesustainabledevelopmentintheairtransportsectorbytheyear2030.Sustainabilityhasbecomeamajorconcernformedium-sizedandlargecorporationsinthewakeofthedecliningnaturalresourcesandadegradedenvironment.Thus,localgovernmentsandinternationalbodiesareengaginginrestrictivelegislationthatisaimedatnudgingcorporationstoshifttowardsustainablepractices.
Sustainabilityisamultifacetedconceptthattouchesoneconomic,social,andenvironmentalaspects.Sustainabilityinthesocialcontextimpliesthatabusinessisequippedtoaddressthecurrentandfutureproblemsofitscustomers,aswellasotherpeoplewhoareimpactedbyitsexistence.Therefore,accordingtoEpsteinandBuhovac,socialsustainabilityencompassestheareasofsocietalequity,communitydevelopment,healthequity,andsocialresponsibilityamongotherkeyareas.Economicsustainability(whatmostbusinessesfocuson)referstotheabilityofabusinesstomeetitscurrentresourceneedsinamannerthatsafeguardsfuturesupply.Inotherwords,sustainabilityisconcernedwithpreventingthedepletionofkeyresourcesbecauseofmisuse.
TheWorldCommissiononEnvironmentandDevelopment(WCED),asPearcereveals,definedsustainabledevelopmentas“[developmentthat]meetstheneedsofthepresentwithoutcompromisingtheabilityoffuturegenerationstomeettheirownneeds”.Thisassertionisacommonunderstandingoftheconceptofsustainabilitysinceitencompassesallkeyaspects,includingsocial,environmental,andeconomicelements.
Therefore,sustainabilitypromotesintergenerationalequitywherefuturegenerationsareconsideredinthemannerinwhichresourcesareutilized.Someorganizationshaveviewedsustainabilityaslimitingtheirfreedomtofocussolelyonprofit-making.Despitethismisconception,businessesrealizethatsustainabilityisanadvantagetoboththecurrentandfuturegenerations.Outofthisunderstanding,moreandmorebusinessesarevoluntarilyembracingsustainability.
EmiratesAirlinesusesaleanworkforcemodel.TheleanmodelmeansthatthewastageofresourcesisavoidedinfurtherancewithsustainabilitygoalsasoutlinedintheATAGplan.Additionally,thecompanyiscustomer-centric,meaningthatcustomers’experienceisprioritized.Focusingondeliveringhigh-qualitycustomerexperiencepromotessustainabilitybecausetheairlineislikelytoretainitsclientsintheend.AsAlMaktoumconfirms,thechairoftheairline,HisHighnessSheikhAhmedbinSaeed,hasoutlinedthecompany’smissionandvisionstatement.
Dubaiplanstobringover20milliontouristswhoareexpectedtogenerateAED300billionannuallyastourismrevenuetothecountry.Inlinewithitsmission,EmiratesAirlinesisslottedaspartofthisinitiative,whichaimsatraisingrevenueforfutureinvestments.PartofthemissionalsoinvolvesbuildingthecapacityoftheDubaiNationalAirTransportAssociation(DNATA),theairlineserviceproviderthatworkscloselywithEmiratesAirlines.
DNATAisanothersubsidiaryoftheEmiratesGroup,whichdealswithservicessuchascargohandling,groundhandling,andflightcatering.BybuildingcapacityforDNATA,EmiratesGrouphopestomakeitpossibletodealwiththeexpectedincreaseinthenumberofpassengerstobehandledbyEmiratesAirlines.Thelong-termstrategyisaimedatprotectingtheairlinefrombecomingoverwhelmed.
Partofthesustainabledevelopmentgoalsincludesexpandinginfrastructurewithintheairline.AccordingtoAlMaktoum,EmiratesAirline’smissionemphasizesofferingthebestlevelofservicequalitytoupholditsoperationsinairtransportation.Hence,thecompanyisanticipatedtocarryover70millionpassengerseachyear.Currently,theairlinetransportsabout44.5millionpassengersannually.Thislargeincreaseinthenumberofpassengerscanresultincapacityissuesifitisnotmatchedwiththeexpansionofinfrastructure.EmiratesGroupplanstocounterthispotentialchallengebyincreasingthenumberofaircraftto300.
Additionally,thecompanyintendstoimproveitsworkforce,bothinsizeandskills.Byupgradingitsfacilitiestomeetthegrowingscaleofoperations,thecompanyhopestocounterchallengesassociatedwiththeincreasingvolumeofpassengers.AlMaktoumalsoprojectsthatthecompanywillneedtostrengthenitsglobaloperationsbothasastrategicmarketingplanoftheairlinesandamovetoincreasetheeconomiesofscale.
Thecompanyunderstandsthattooperateintheend,effortsmustbemadetoattaineconomic,environmental,andsocialsustainability.Currently,EmiratesAirlineshasdoubleditseffortstomaintainlowfuelconsumptionaspartofensuringsustainability.AccordingtoO’Connell,thecostoffuelhassincereplacedlaborasthebiggestexpenseinairlineoperations.Thistrendcallsforairlinecompaniestoengageinthecost-effectiveutilizationofoilasawayofmaintaininglowoperatingcosts.
Further,O’ConnellobservesthatEmirateshasmadekeyattemptstooperateatlowfuelcosts.Inthe2007/2008year,theairlinesaved$1billionthroughitseffectiveutilizationoffuel.Effectiveconsumptionoffuelhastheadditionaladvantageofprotectingtheenvironmentbyminimizingemissions.AccordingtoChang,thecompanyhasrecordedsomeofthelowestemissionsamongairlinessinceitsaircraftburnsonlyaboutfourlitresevery100-passengerkilometres.Further,theairlineoperatessomeoftheyoungestaircraft,astrategythathasassistedinkeepingfuelcostsdown,aswellasmaintainingalownoiseprofile.
AnotherkeypillarofATAG2030issocialdevelopment.AccordingtoChang,aviationisanessentialcomponentoftheworldeconomy,generatingover62.7millionjobsandannualGrossDomesticProduct(GDP)ofabout2.7trillion.Throughpromotingeconomicgrowth,airtransportfostersthesocialdevelopmentofcommunities.EmiratesAirlineisdevotedtofurtheringATAG’sgoalofsustainability.
AlMaktoumexplainsthattheairlineisdedicatedtopromotingcommunitydevelopmentthroughinitiativessuchasofferingopportunitiesforpeopletoacquireeducationthroughtravelling.Travellingopportunitiesarealsoexpectedtopromoteculturalexchange,whichasanessentialaspectofsocialdevelopment.EmiratesAirlinesisalsoengagedinthecontinuedempowermentofitsemployeesbyensuringagoodworkingenvironment.ATAG’sexecutivedirector,MichaelGill,assertsthatadecentworkingenvironmenthelpstominimizeinequalitiesinsociety.Inadditiontoadecentworkingenvironment,Emiratesisalsodedicatedtoofferingtrainingandpromotionalopportunitiestoitsemployeesasafurtheranceoftheemployeeempowermentgoal.
AsEmiratesGroupreveals,recyclingatEmiratesAirlineisconcentratedintheEmiratesEngineering,AlphaFlightGroup,andFlightCateringareaswheremostofthewastematerialsareproduced.Thecompanyisalsoengagedineffortstominimizewaterconsumptionwhilealsocuttingtheuseofpaperinitsoperations.Thecompany’spolicyofefficientfuelconsumptionhasalsobeenextendedtoDNATA’svehicles.EmiratesAirlinealsosupportsbiodiversity.TheDubaiDesertConservationReservesupportsover1000speciesofendangeredbirds.Theairlineisactivelyinvolvedinthemanagementofthissanctuary.OtherconservationinitiativesbytheairlineincludearesortinAustralia’stheBlueMountainsandtheEmiratesWolganValleyResortandSpa.
Emirates’operationsintheairlineindustryarenotwithoutcertainchallenges.Theairlineispoisedtofacevariouschallengesinthecomingyears,owingtothecompetitivenatureoftheindustry.AsSquallobserves,EmiratesAirlineswillneedtodrasticallyincreaseitscapacitytoahigh-performingaviationsystem.Thisplanwillrequireexpandingitscapacitytohandleaboutfourtimesitscurrentpassengervolume,asthedemandforairtransportispoisedtorisesharplyinthecomingyears.
OneofthemajorhurdlesthatfaceEmiratesAirlinesistheprevailingconflictintheMiddleEast.Forseveraldecades,theregionhasbeenfacingstrife.Thisconflicthasresultedinprolongedtension.TheclimaxofthistensionwastheSyrianconflictandtheISISuprising.
ConflictintheMiddleEastaffectstheairlineinsomeways.First,thenumberoftouristsandothervisitorstotheregionhasremainedlow,fallingevenlowerduringtimesofconflict.Ifconflictsubsistsintheregion,thenumberoftouristsvisitingtheGulfregionwilldecline,thusnegativelyaffectingthecompany’slong-termstrategyofcarryingover20milliontouriststoandfromDubaiby2020.Theairlineheavilyreliesontourism.
Hence,anyconsiderablereductioninthenumberofpeopletouringtheregionwouldmeanreducedprofits.Currently,EmiratesAirlinesisengagedinacquiringthehugeAirbusA380aircraft,whichhasacapacityofupto600passengers.AccordingtoDrflerandBaumann,despitebringingforthanincreasedprofitmargin,thismovewillposeacompletelynewrisktotheairline.Fillingsuchahugeplanemaybeachallenge.Travellingwithhalf-filledaircraftwillmeanoperatingataloss.
ConflictinregionssuchasSyrianandTurkeywillrequireEmiratesAirlinestodesignnewtravelroutesthatskirttheconflict-riddenregion.Thisplanmaybeaccomplishedtoavoidtheriskofmissilestrikes.Inthepast,traditionalroutestoEuropepassedoverSyriaandIraq.However,duetotheconflictraginginthesetwocountries,theairrouteshavebeenrechanneledtopassthroughIran,whichmakesthemmuchlonger.AccordingtoWood,longerroutesleadtolongerflighttimes,aswellasmorefuelconsumption.
In2014,GornallnrevealedhowIranreportedariseofaircraftflyingaboveitsairspaceby32percentsinceconflictresurgedinIraq.AftertheRussianKGL9268flyingoverthepeninsulacrashedintotheSinaidesert,EmiratesAirlinesofficiallyannouncedthatitwouldnolongerbeflyingovertheregion.However,withnosignsofacease-fireintheregion,theairlinehascausetoworry.ShouldanotherconflicteruptbetweenIranandIraqinthefuture,theairlinewouldbeforcedtoadoptevenlongerroutes.
Thedeclineinoilpricesisalsoanticipatedtobringforthvariousdifficultiesinairlineoperations.Therefore,theeconomyoftheUnitedArabEmiratesgreatlydependsonoil.Oilcontributeslargelytothecountry’sGDP.Adeclineinworldoilpricesmayaffectthegovernment’sabilitytofundthestate-ownedcorporation.AccordingtoGornall,governmentfundingisanessentialpartofEmirateAirlines’budget,whichenablesittocompeteeffectivelywithkeyindustryplayerssuchasBritishAirwaysandSingaporeAirlines.
Hence,ashortageofgovernmentsubsidymaylimittheairline’sabilitytosupportitsluxurytrips,thusexposingtheaviationsectortoasecuritythreatconcerningitsexistence.Inrecenttimes,thegovernmentoftheUAEhascomeundercriticismsforcontinuallyengaginginfundingitsEmiratesAirlineswhenothersdonotreceivesuchfundingfromtheirhomegovernment.AccordingtoRihanna,criticsfeelthatsuchamovehurtsothercompaniesthatdonotreceivesubsidiesfromtheirgovernments.
Emirateairlines’majorcompetitorsintheGulfregionincludeQatarAirlinesandEtihadAirlines.WithTurkishAirlinespredictedtorisetointernationalprominenceinthefuture,EmiratesAirlineswillfacenumerouscompetitorsinadditiontorivalsfromotherregionssuchasAmericanAirlinesandkeyEuropeanplayers,forinstance,AirFrance.Additionally,therehavebeenconcernsabouttheEmirateAirlinesbeingcontinuallysubsidizedbyitsgovernment.Inthefuture,thestakeholdersoftheOpen-SkiesTreatymayexpresslythreatenthecarrierandhencetheentireaviationsectorbydemandingthegovernmenttoceasefundingtheairline.Theeffectofsuchamovewouldinvolvereducingthesecuritylevelofthesector.
EmiratesAirlineiscitedasaglobaltrendsetterinairlineluxury.Thenumerousawardsithasreceivedregardingitsprivatesuitesdemonstratethisclaim.Luxurycomeswithitscosts.Hence,tostayaheadofthepack;EmiratesAirlinesshouldconsideradjustingitsbusinessmodelwhilestillmaintainingtheluxury.In2009,theInternationalAirTransportAssociation(IATA)reportedthattheairlinecountedmorethanUS$9billioninlosses.Thislosswasattributedtocompetitionposedbylow-costcarrierairlinesandareductioninthenumberofpassengerstravellingonbusinessclass.
Thesechallengescoupledwithinnovativeapplicationsandnewentrantscallfortheairlinetoimproveitsoverallservicestoattractcustomers.Itneedstoadoptmethodsthatimprovecustomerexperience,loyalty,andprofitability.Airlinesareinbusinesstoreapprofits.Therecoveryofglobaleconomieshasmadeairlinesrepositiontheirstrategiesforaneconomicrebound.EmiratesAirlinesisknownforitstouchofluxury.
AccordingtoJenner,itmustfocusitsstrategiesonoptimizingpassengerluxurytobeatitscompetitorsintheindustry.Thisagendashouldbeexecutedbearinginmindthatthesuccessofanairlineinthisdigitaleraisgaugedaccordingtoitsabilitytoutilizetheemergingtechnologieswhileatthesametimebeingabletomaintainitsstatusabouttheluxuryproductitprovides.EtihadAirwayshasasimilarluxuryproduct,namely,the“Residence”.
HowfararethetwoairlineswillingtogobeyondthepromotionandtheinnovativeconceptofluxuryWhatisthenextunimaginableluxuryproducttointroduceThehighertheyarewillingtogointheinnovationintermsoftheproduct,themoretheymaylimittheirtargetedgroupofpeopleinthemarket,bearinginmindthattherichpeoplewillbeaffordingtheinnovativeconceptsoftravelluxury.
Tobeatitscompetitors,EmiratesAirlinesmustturntodigitizationandinnovation.AtthethirdInternetofThingsWorldForum,theEmiratesAirlineSeniorVicePresidentofITServicestalkedaboutplansbytheairlinetoembraceinnovation.TheInternetofThings(IoT)hasthepossibilityofchangingthewayairlinesoperate.IOTisaconceptthatenablesairlinestodigitizealltheiroperationswhileatthesametimeprovidingpersonalizationofservicestotheirpassengers.
Itenablesanimprovedserviceinequipmentmonitoringandbaggagehandlingamongotherservices.DespitethesecurityrisksassociatedwiththeIOT,manyairlinebossesemphasizeitsbenefits.Inasurveyconductedin2015bySITA,two-thirdsofairlinesthatreportedbenefitsafteremployingIOTwentfurthertopredictanincrementinbenefitsinthenextthreeyears.
ThesurveybySITAindicatedthat37%ofairlineshadalreadysubscribedtoIOTwhile58%wereintheprocessofallocatingfundsintotheconcept.About86%werepositivethatitsapplicationwouldgeneratemorebenefitswithinthenextthreeyears.Thetechnology,innovation,anddevelopmentmanageratVirginAtlantic,TimGraham,foresawagreatrevolutioninthewayairlinestransacttheirbusinesswiththeapplicationofIOT.
AccordingtoGraham,passengerswouldfinditeasiertonavigatetheairports.Shorterqueueswouldalsobewitnessedatthecheck-inandboardingareas.Thewholeflyingexperiencewouldbeatasteofluxurytothepassengers.Thebuilt-insensorsmeanttomonitorhydrationandtemperaturelevelswouldfacilitatethisstate.Inthecaseofanyuneasinessbythepassengers,thecabincrewwouldbealertedtotakespecificmeasures.Inessence,thisadvancementwouldbeanewexperienceforairlinesduetoautomation.
Permission-basedsensorswouldservetoenhancebetterdecision-makingbyairlines.Asaresult,thestressfactorsthroughoutajourneywouldbeeliminated,thusprovidinganewflyingexperience.Sensorequipmentwillbeconnectedtoelevators,bag-dropstations,carparks,andeveninthebaggagetrolleys.ThesurveybySITAindicatedthatamajorityofairlineshadplansofusingbeaconsbythefallof2018.Jennerobservesthemoveasanadvantagetopassengerssincecrucialinformationwouldberelayedtotheirmobiledevices.However,theuseofbeaconsbyEmiratesisnotanewconcept.Thebeacontechnologyisemployedonbagtagstoimproveluggagehandlingandmanagement.
EmiratesshouldadoptMobility3.0initsfutureoperations.AfterthesuccessofMobility1.0and2.0,Mobility3.0isacombinationofthetwopreviousinterphasesthrougharangeofcontext-awareapplications.Theseapplicationsservetoimprovetheoverallcustomerexperiencebyprovidingthemwiththeutmostcontrolthroughouttheirtravel.Thepersonaltravelassistantsendsalertmessagestopassengersregardingtheirjourney.
Themessagesincludeflighttime,security,andinformationconcerningtheirluggage.Mobilemarketingprovidesspecialdiscountstoseasonedpassengers.Themobileconciergeserviceenablesapersonalizedservicethatdeliversinformationabouttheuser.Themobilepaymentoffersane-walletwherebypassengersmakepaymentsthroughtheirmobiledevices.Concisely,theapplicationofMobility3.0willenablepassengerstomakeinformeddecisionsabouttheirtravel.TheapplicationofMobility3.0willreshapeEmirateAirlines’businessmodelbytheintroductionofnewservicesaimedatimprovingcustomerexperience.
Mobility3.0iseffectiveincountrieswithgrowthinairtravel.TheMiddleEastisanareathatisexperiencingboomingairlinebusinesscitedat25.8%growth.Thisgrowthisattributedtotheriseintourism,GrossDomesticProduct(GDP),andasharpincreaseinthepopulation.
Asaresult,theMiddleEastisexperiencingademandforairtravelasairportsreportbustlingactivities.McKinsey&Companyindicatedthattheuseofmobiletechnologycontinuestoincreaseduetoitsaccessibility.ItisforthisreasonthatEmiratesAirlineshouldseektore-strategizeonservicemobility.ThearchitectureofMobility3.0suggestsacompleteoverhaulofanairline’sobjectives,technology,andcapabilities.Thus,EmiratesAirlinesneedstoalignitsobjectivesinthelightofMobility3.0.Besideseconomics,social,andenvironmentalpillars,othermajoraspectsofsustainabilityinvolvetechnology.
EmiratesAirlinesisthelargestaircarrierregardinginternationalpassengers.Thecompanyisfamousfortheluxurystylethatgivesitanedgeoveritscompetitors.Thecompany’sstrategicplanisshapedtoguaranteesustainabilitydevelopmentintheendbytheATAG2030aviationplan.Sustainablemeasuresincludeefficientconsumptionoffuel,communitydevelopment,andemployeeempowerment.Additionally,theairlinesupportsmissionsthataimtopromoteenvironmentalconservationinvariouspartsoftheworld.
Despitetherobustgrowthanddominationoftheairlineindustry,EmiratesAirlinesfacesvariouschallenges,whichmaybecomemorepronouncedinthefuture.TheyincludetheMiddleEastconflictanddecliningoilprices.Also,thecompanycompetesforthemarketwithkeyplayerssuchasAmericanAirlinesandBritishAirways.Tocompeteeffectively,EmiratesAirlineswillneedtomakestrategicchanges,includingadoptingIoTandMobility3.0technologies.Theairlinewillcontinuetomaintainitsinnovativeluxuryproduct.Besidesacknowledgingthatothersustainabilitypillarssuchastechnologycanoffermoreservicestoitscustomers,theairlinewillneedtogoastepaheadoftheothercompetitors.
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Reference
WorkCited
"EmiratesAirline:ConnectingtheUnconnected."IvyPanda,9Oct.2020,ivypanda.com/essays/emirates-airline-connecting-the-unconnected/.
References
IvyPanda.(2020)'EmiratesAirline:ConnectingtheUnconnected'.9October.