Etihad and Emirates Airlines

Introduction of Companies

Transportation industry is one of the most significant parts of life in the modern world. Currently, freight is the necessity for the humanity, which is conducted by various ways. The three methods of transportation are by land, water and air. The air freight method is the most effective available transportation in the modern world. In the globalized work, transportation does not only ships and transfers various commodities, but also works in the passengers’ market. Based on the fact that air transportation is the fastest mean, there are a fair number of airlines that fulfill the tasks. However, not every airline is efficient, customer-friendly, and affordable. On the contrary, some passenger airlines lack quality service, while the others are extremely expensive. The current paper presents evaluation of the two major UAE airlines that meet the customer’s needs in the passenger air transportation industry. They are Emirates Airlines and Etihad Airlines. Both companies have gained a wide popularity in the market and are competitors in the industry.

Etihad Airways are one of the top-quality luxury airways in the modern world. The main objective of the company is to boost the passenger traffic in the Middle East. Accordingly, the management of the company invests in marketing strategies to accomplish the goal. Furthermore, due to the investments in the service quality and human resource, the carrier enjoys popularity in Abu Dhabi. The company’s profit marks $14 billion per year. The company has effective advertisement that enables to attract customers’ attention, including sports sponsorship to create the brand. In fact, the corporation has become the largest sponsor for the Manchester City Club. In addition to football sponsorship, Etihad participates in various development projects in Abu Dhabi. Thus, Etihad is one of the leaders in the contemporary UAE air transportation market.

The Etihad Airways select GE Aviation, Rolls-Royce, Engine Alliance and International Aero Engines (IAE) to operate the better and more efficient aircrafts. The mentioned companies provide the technical and training support to the corporation. Moreover, the company states that “Abu Dhabi Aircraft Technologies will become the world’s first maintenance, repair and overhaul provider for the GE Aviation GEnx engines, an engine Etihad has ordered to power its 35 new Boeing 787 aircraft” (“Etihad Facts and Figures”, 2015). The organization has made a great contribution to the establishment of renewable energy. As the headquarters are situated in one of the outskirts of Abu Dhabi, the management cooperates with the local government on financial affairs to develop the sustainable environmental technology in the locations. Thus, Etihad Airways participates in various projects and cooperates with environmental organizations to achieve the desirable goal. One more important fact is that the corporation supports the Zayed National Museum, since it is the remarkable place of inspiration and pride. The British Museum is responsible for providing necessary equipment as well as governing institutions in order to make the museum more attractive to the visitors.

The second company of interest is Emirates Airlines, which is also one of the leading air transportation corporations in the world. It supplies 142 cities in more than 80 countries from its initial point the United Arab Emirates. The airlines operate the greatest fleet consisting of Airbus A380 and Boeing 777 (“Going Further”, 2014). In addition to the transportation service, the company supplies cargo throughout the world. The corporation Dnata is the largest service provider in the world. Their core operations include shipment of cargo, ground handing, travel service, and information technology. The important factor is that Emirates Airlines and Dnata are independent branches and they do not make a group as determined by International Financial Reporting Standards. Nevertheless, the two companies work under the same management.

Emirates Airlines was created in 1985 and the first flights were conducted from Dubai to Karachi and Mumbai (“Going Further”, 2014). Since the first short flight, the company has grown rapidly to supply a quality service across all classes and various destinations. The main objective of the airlines was to introduce innovative commodities and service. Thus, Emirates Airlines was the first air transportation company to install seat back video system in all classes in 1992 (“Executive Summary”, 2015). The airline was initiated by the minimal investment allocated by the government of Dubai. The capital was owned by the Investment Corporation of Dubai that possesses real estate, finance, transport, and energy sectors. In 1985, the government invested US $10 million into Emirates Airlines to enhance the infrastructure (“Going Further”, 2014). It resulted in the acquisition of two Boeings 727 and the Emirates Training College building. The Dubai government and the Emirates Airlines’ management considered the company to be profitable as well as self-sustainable. 

The Emirates management model is based on the tremendous operating efficiency.  The development of the Dubai city has an enormous impact on the prosperity of the Emirates Airlines. The location benefits include favorable geographic location, developed tourism infrastructure, and progressive economic policies (“Going Further”, 2014).

Competitive Advantage of the Companies

In order to be a successful company, a business should provide a competitive advantage. According to Etihad statistics the number of number of passengers has increase for the first six month of 2009. The transportation plans brought enormous profit due to effective management. The airline was extending its opportunities during the 2009 year. Consequently, new aircraft appeared to increase the airline’s fleet. The biggest fleet allowed providing the flights to Cape Town and Chicago. The company started introducing new winter destinations. The biggest flight record was observed in July 2009. During the month, the passengers were traveling all round the world bringing the popularity and income to the company. Actually, the main objective of the Etihad Airways is to convince the world that UAE is of highly importance. The reputation of the company is its main competitive advantage. The age of Etihad is six years; but for the short period the management managed to rebuild the company, build sufficient training base, and acquire investments for the development of the corporation. During the year, Emiratis have shifted up on the table of nationalities working at Etihad. There exist four streams in the Emiratisation campaign, namely call center, cadet pilots, engineers and graduate managers. Human resource is the competitive advantage of the company. Thus, the Etihad Airlines provide the additional benefits of the access to the IATA Working Group Committee for Security (”Corporate Facts and Figures”, 2015). The company will be represented by the vice president of security of the Etihad Airways – Mohamed Abubaker Al Farea. The human capital value increase is based on supplying technical support for the stuff.  The indirect contribution is $17 billion. Also, the Etihad Airways provide the excellent workplace for a great variety of employees. They attract the resources by correct motivation techniques and appropriate treatment.

Another competitive advantage is that the Etihad Airways think not only about the employees, but also about the environment. The corporate social responsibility contributed to their competitiveness in the aviation market. The strategy of the waste recycling works perfectly in the company. The stuff is responsible for gathering, segregating, and sending waste for further recycling. Moreover, the Etihad Airways are the participants of the project the Integrated Seawater Energy Aquaculture System (ISEAS) (Annual Report).The main objective of the project is to focus the attention on the development of the plant-based fuel. It will not only save the environment, but also boost the company’s positive image, popularity and profit.

The technology plays a significant influence on the Etihad Airways success. The movement from the passenger service system to SabreSonic changed the corporation completely. “Known as “The Big Switch”, the final alignment and integration of these disparate systems occurred globally on February 23, 2013 following the training of almost 7,000 employees” (“Annual Report”, 2015).The appliance of the mentioned system boosts the productivity of the company, since the basic element is IT. The technology department replaces old system to the up-to-date devices on the regular basis. The customer service became faster and more efficient. The upgrading of the computer systems makes it possible to detect problems immediately. Moreover, with the help of IT the control of the stuff performance and timely feedback is possible. The computers can monitor any action and alarm if there is something wrong or incorrect.

The second company under analysis is the Emirates Airlines, which has stable income based on several competitive advantages. Firstly, the airlines are committed to customer service. Secondly, the board of directors hires great management personnel. Thirdly, the company employs the innovative aviation models on the regular basis.

Without doubt, Emirates business is financially transparent; thus, the company is a great rival for other existing companies. The corporation is under the control of shareholder that derives value from its portfolio of assets. During the last 20 years, Emirates has provided their shareholders with $3,3 billion outweighing its common capital basis of $218 million (“Executive Summary”, 2015). The Emirates Airlines has reached its leading position through reinvesting own resources and utilizing external financial options. Furthermore, Emirates has always operated in a self-sustaining manner even during the crisis that occurred in 2007 and 2008 (“Executive Summary”, 2015). Emirates gained the stability in the challenging economic times by continuing to concentrate on the core drivers behind its financial success and the underpinning of its business model.

In addition to the successful management system, the Emirates Airlines Company is an integral part of modern culture. The corporation builds its competitive advantages through close connection with sport, environmental studies, and charity. Accordingly, Emirates is a sponsor of the world football, rugby, tennis, cricket, golf, and horse racing. One of supporting causes of the Emirates Airlines is environment.

The core objective of the airlines is to make the Emirates group the leading company in travel and aviation industry. They aim to create sustainability of all group operations on the ground and in the air. Every representative of the personal is aware of the environmental problems in the contemporary world.  In order to support the corporate social responsibility, Emirates has made policy which is implemented with the help of environmental program. The company proves the fact that being an ecologically-efficient organization means to be environmentally sustainable. Thus, the company plans to reduce the usage of resources and create less pollution; invests in new eco-friendly technologies available in engines, ground equipment and airplanes respectively. Environmental issues are not the only concerns of the Emirates Airlines. The company makes an enormous contribution to charity. The Emirates Airlines Foundation supplies philanthropic aid and services for children in need. The Emirates Airlines tries to enhance the quality of children life, regardless the political, religious or geographical peculiarities. The people throughout the world can make donation to the Emirates Airline Foundation and the money will be transmitted to children immediately. The core objective of the foundation is to reduce poverty in the world.  Thus, the competitive advantage of the company is in its ability to build positive reputation, sustain social image and protect the world.

SWOT Analysis

Being the leader at the aviation market, Emirates Airlines has its advantages as well as disadvantages. In order to investigate the company in every aspect a SWOT analysis is the best strategy. The profound SWOT analysis supplies the clear understanding of the company’s history, operations, business structure and corporate strategy.

The first component of the SWOT analysis includes the company’s strengths. Being one of the most successful air transportation companies in the world, Emirates Airlines built the strengths of size, diversified market, cargo shipping, global brand, bind corporate environment, innovative equipment, and effective management. Each element is of paramount importance and is the main components of the company’s success. The second group of factors is the weaknesses. The most obvious weakness is the lack of attention to common people, the drawbacks of faulty operational approaches, and the excessive focus on diversification. The most striking weakness is the unequal treatment of customers, as the company is mainly oriented on the rich customers. The combination of the strength and weakness creates the opportunities. The predictable opportunities are the establishment of advanced aviation service, broadening of the market, available innovations, development of the personalized services, and inventing the flight for budget travelers. The last category is the threats. The number of competitor such a Gulf Air and Etihad, the inability to go cope with innovative technologies, and increasing the price of fuels bombard the company’s prosperity. Thus, the SWOT analysis assessed the company’s internal and external environment to provide the solution for improving the future of the Emirates Airlines.

The second company of interest is Etihad Airlines. The main strength of Etihad is the possession of 57 Airbus aircrafts which enables to provide flights to various destinations. Furthermore, the company can target various customers from the middle class and upper class. The prices are affordable for every customer. Moreover, the airlines provide the customer with the information about the possible hotels and propose the transfer from the airport to the desirable destination. Despite its overwhelming success, the company has some weak sides as well. They include the low effectiveness of the customer service, and the lack of the destinations. However, the company can easily realize its available opportunities. The core opportunity is the implementation of ion in new technologies. Finally, the company’s threads include the competitors such as Emirates Airlines and Qatar, natural environmental conditions, as well as the increase in fuel costs. In conclusion, both Etihad and Emirates Airlines have gained a wide popularity in the contemporary world and a stable financial position. Both companies are known airlines among the many customers. The airlines provide convenience, customer service, and corporate social responsibility. Each corporation has its strengths and weaknesses to work on, as illustrated in the SWOT analyses. The list of competitive advantages for each corporation differs, as the success can have a different approach in achieving the desirable goal.

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