Emirates Strategic Analysis
Is Emirates Airlines going to become the #1 long-haul carrier in Asia Pacific region?
Introduction
The purpose of this report is to analyze the possibility of Emirates becoming then the #1 long-haul carrier in Asia Pacific region. First the attractiveness of the industry will be looked at. Then the present and the future of the industry will be justified through the analysis of the external environment. Next company’s resources and capabilities will be examined and potential sustainable competitive advantage will be identified. Finally, appropriate conclusions will be drawn.
Analysis
Company profile
"Life must be wonderfully simple when the airline, government and airport interests are all controlled and run by the same people."
Qantas Chairman Margaret Jackson
Starting its operations in 1985 with two leased planes and a $10 million loan from the Dubai government Emirates have developed into one of the most profitable carriers that have achieved a record result of $708 million net profit from $5.2 billion operating revenue in fiscal year 2005 (www.emirates.com). The airline is based in Dubai, United Arab Emirates and owned by The Emirates Group that is 100% owned by the government. At present, Emirates operates services to 78 destinations in the Middle East, Far East, Europe, Africa, Indian subcontinent, Asia-Pacific and North America. Its fleet consists of 78 Boeing and Airbus models aircrafts that are among the newest in the air (Maier, 2005).
1. Is the industry attractive?
Industry dynamics and competition: 5 forces model
Threats of new entrants
Economies of scale
Larger airlines enjoy increased economies of scale, which mitigates the effects of the high cost structures that have come to define the large network carriers. (Ward, 2003)
Capital requirements
Opening a new airline needs a heavy investment in the start and ongoing sufficient funding for a long period of time before the company would start to return profit. Though leasing
Introduction
The purpose of this report is to analyze the possibility of Emirates becoming then the #1 long-haul carrier in Asia Pacific region. First the attractiveness of the industry will be looked at. Then the present and the future of the industry will be justified through the analysis of the external environment. Next company’s resources and capabilities will be examined and potential sustainable competitive advantage will be identified. Finally, appropriate conclusions will be drawn.
Analysis
Company profile
"Life must be wonderfully simple when the airline, government and airport interests are all controlled and run by the same people."
Qantas Chairman Margaret Jackson
Starting its operations in 1985 with two leased planes and a $10 million loan from the Dubai government Emirates have developed into one of the most profitable carriers that have achieved a record result of $708 million net profit from $5.2 billion operating revenue in fiscal year 2005 (www.emirates.com). The airline is based in Dubai, United Arab Emirates and owned by The Emirates Group that is 100% owned by the government. At present, Emirates operates services to 78 destinations in the Middle East, Far East, Europe, Africa, Indian subcontinent, Asia-Pacific and North America. Its fleet consists of 78 Boeing and Airbus models aircrafts that are among the newest in the air (Maier, 2005).
1. Is the industry attractive?
Industry dynamics and competition: 5 forces model
Threats of new entrants
Economies of scale
Larger airlines enjoy increased economies of scale, which mitigates the effects of the high cost structures that have come to define the large network carriers. (Ward, 2003)
Capital requirements
Opening a new airline needs a heavy investment in the start and ongoing sufficient funding for a long period of time before the company would start to return profit. Though leasing