Question

Case 34 Emirates Airline Emirates Airline was one of the three Middle East carriers that were singled out by the largest US airlines in the report that was released on March 5, 2015. The report charged that that the flagship airline of Dubai, along with Etihad Airways and Qatar Airways, had received over $42 billion in government subsidies and tax breaks since 2004. Claiming that this gave an unfair advantage to these state-owned airlines, the US airlines demanded that the “open skies” treaties that had allowed these three airlines- Emirates, Etihad, and Qatar- access to the US should be renegotiated in order to curtail their further expansion into the country. No airline had grown like Emirates, which in the three decades since its birth could be crowned as the freewheeling sultan of the skies. By assembling the largest fleet of Airbus A380 super jumbos and Boeing 777 long-range jets, the airline had already become one of the leading transporters of passengers on international routes around the world. The US carriers were worried that they would meet the fate of the European carriers, who is marketshare had decline by double digits on routes where they competed with Emirates. In particular, Emirates, along with new were upstarts Qatar and Etihad Airways, i’ve managed over the years to radically with drawl the map of the world, transferring the hub of international travel from Europe to the Middle East. Dubai, the hub of Emirates, currently handling 75 million passengers each year, became the worlds busiest airport for international passengers. A new terminal, the largest in the world, was recently billed at a cost of four .5 billion just to accommodate the 224 Emirates Aircraft that flew out to 145 destinations around the world. Emirates claim that it had worked hard to achieve its leading position by offering onboard amenities, like bars and showers on its aircraft, which other carriers find frivolous. Beyond this, it pointed to the high standards of service from its crew on its flights. Emirates had built an elite force of 18,000 flight attendant who represented 140 nationalities and spoke more than 50 languages. They were selected from thousands who regularly lined up at open days, held in more than 140 cities and 70 countries, just to have a shot at becoming part of an conic brand that was uniting people and places around the world. Sir Tim Clark, the president of Emirates Airlines, Responded to the chargers in the report by insisting that his carrier had never received government subsidy airy’s or obtain free or cheap fuel. The airline had always disclose his finances, use international auditors, and posted regular quarterly profits. In fact, cording to its financial statements, Emirates had shown profits for the last 27 years. And 2014, the airline generated these profits by caring over 45 million passengers, ranking it behind only five US and European carriers. “ We are confident that any allegation that Emirates has been subsidized is totally without grounds,” Clark declared. Launching a dream The roots of Emirates can be traced back to Gulf Air, which was a formidable airline owned by the governments of Bahrain, Abu Dhabi, Qatar, and Oman. In the early 1980s, the young sheikh of Dubai, Sheikh Mohammad bin Rashid al Maktoum, was upset by the decision of Gulf Air to cut flights into and out of Dubai. He responded by resolving to start his own airline that would help build to buy into a center of business and tourism, given the Emirates’ lack of significant oil resources. The sheikh recruited British Airways veterans Sir Maurice Flanagan to lay the groundwork for the new airline, which he being rolled with 10 million employer funding. He placed a member of his royal family, Sheikh Ahmed bin Saeed al Maktoum, in the top post. Ahmed bin Saeed, just 26 years old, I had just graduated from the University of Denver in the United States. Since he had not held a job before, the young sheikh look to Flanagan in order to figure out how to run the airline. However, the spectacular growth of Emirates I am be attributed to Sir Tim Clark, who was handed the crucial task of route planning. He recognize that about 2/3 of the worlds population was within eight hours of Dubai, but the firm lacked the aircraft to take advantage of its Okasian. This began to change with the arrival of more advanced aircraft, beginning with the introduction of the Boeing 777 in 1996 and then the Airbus A380 in 2008. The long range of these aircraft allowed Emirates develop route so I could link any two points in the world with one stop in Dubai. From serving 12 destinations in 1988, Emirates banded at an alarming rate, particularly after 1996, when it started adding Boeing 777’s to its fleet. The carrier continue to grow even through the recession that began in 2008, taking possession of more new aircraft than any other competitor. “ we operated normally. We put on more aircraft. We carried more passengers,” said Mohammed H. Matter, senior vice president of the carriers airport services. Providing the ultimate experience Emirates strive to provide the best possible experience to his passengers in all sections of its aircraft. It was the first airlines offer in-flight television viewing on the back of every seat. “ that seems pretty normal for a long haul airlines now, but it wasn’t then,” said Terry Daly, Who was in charge of service at the carrier. Flight attendants, who were fluent in a dozen languages, passed up and down the isles, providing service with a smile. Daly, Who maintain the highest standards for all in-flight services, was known for once having fired eight service supervisor is on a single day when he discovered that the flight attendants they supervise had a deviated from his precise instructions on how to respond to requests from passengers. From its start, Emirates was known for the quality and selection of food that the airline provided, even two passengers in the back of the aircraft. The catering division was the world’s biggest- A multi floor maze of monorails, cameras, vast stocks of wines and liquors, Multinational chefs slaving over steaming pans, kettles, and grills stretching into eternity, and the latest in robotics. The division delivered 115,000 meal trays to Emirates planes each day. “It’s about making sure the culinary offering is absolutely first class across the airplane,” said Daly. But Emirates always tried to push further and further on the service and amenities that you provided to its premium class passengers. Included with a business class ticket were limousine rides to and from the airport, personal assistance with the check in process, and use of one of the airplanes 30 worldwide lounges. One of 600 multinational and multi lingual members of a welcome team called Marhaba, Arabic for “welcome,” helps all first and business class passengers clear all formalities upon departure and upon arrival. Over the years, as Emirates move to larger and larger aircraft, it found ways to enhance the experience of its premium passengers during flight. The airline had pioneer the concept of a suite in first class with its launch of A340 Aircraft in 2003. With the addition of the A380, the world’s biggest jetliner (it had 50- more than any other competitor), Emirates was able to offer 14 first class suites, each with a vanity table, closet, 23 inch TV screen, and electronica doors that sealed shut for total seclusion. First class passengers also had access to two enormous spa showers, a first in the industry. An event planner who flew first class said, “ to walk onto the A380, to have an average size bathroom, a seven minute shower, full-size bath towels and your own attend it is pretty amazing.” All premium class passengers both in first and business class had access to a big, circular lounge, with a horse shoe shaped standup bar in the center, for which Emirates forfeited a number of business class seats. Grooming a special employee Emirates created a state of the art facility to train it’s employees, from those who check in passengers to those who serve them on its planes. The exterior of the training facility resembles the fuselage I have a jetliner. Inside, everyone pay particular attention to the flight attendants, who had to make sure that everyone on the aircraft receive the highest level of service on every single flight. This was particularly important for a carrier who is flights were of long duration because it’s serve destinations across all continents. Catherine Baird was in charge of training the airlines new recruits, who constituted only about 5% of the applicants received by Emirates. The low acceptance rate pushes people with diverse backgrounds to compete in an American Idol style brains-and-beauty contest for a chance to travel around the world as Emirates Cabin crew member. According to a recent report, the crew had an average age of 26 years, compared to over 40 at US airlines, and was 75% women. Their weight was carefully monitored, their makeup was mandatorily reapplied regularly, and unwed pregnancy was not allowed. The airline offered a vast, no expenses spared crew training program, in which, for seven weeks, each new recruit move through different departments with specialist in different areas. By the end of their training, the newcomers had been instructed in aspects of posture, etiquette, safety, and evacuation. There were strict standards for the color of the lipstick, the shade of the hair, and even the style of the lingerie. Everything had to go well with the pinstripe khaki uniform, the color of sand, with white scarves billowing like exotic sails. Women had to adhere to certain hairstyles that the crowning blood red hat would work with. “When walking through an airport terminal, it’s usually a catch me if you can movie moment, with passengers all turning their heads,” said one of the new recruits. As with everything else, Emirates went over the top and what is it called Nujoum, the Arabic word for “stars,” by including motivational team building exercises and it’s training program. Travel rider Christine Negroni, Who participated in one of these exercises, describe the experience that the new recruits typically went through: “It is a combination of a customer service experience and a come to Jesus rally, highly produced like a Hollywood spectacular. If you had told me that Disney produced it, I wouldn’t doubt it. By the end of the day, they are whipped into a frenzy of feeling ‘what can I do for Emirates?’” Communicating to the masses In spite of the extra touches that Emirates provided to its passengers, the carrier discovered, from focus groups it conducted, that its name was not well known in many parts of the world that it was expanding to. Emirates realized it needed to create a message that it could use to develop its brand among consumers and inform them what to expect from Emirates. This message could also be used to inspire existing and potential employees to rally behind the airline and work to deliver on its promise. In its usual style of pushing for the best, Emirates summoned the worlds top 10 advertising agencies to Dubai to compete for a massive international advertising campaign. StrawberryFrog, an advertising agency that had recently started operating in New York City, was one of the firms vying for the contract with the rapidly growing carrier. It’s founder, Scott Goodson, had read an interview with Sir Tim Clark, the president of Emirates, shortly before the gathering of advertising agencies. “And in that article, he was talking about his vision, that he wanted Emirates to be a global company and wanted to make the world a smaller place by bringing people together,” said Goodson. These comments inspired Goodson to come up with the idea of “Hello Tomorrow,” which allowed his firm to clinch the contract with Emirates. His words became not just the idea for an ad campaign but for a new way to think about an airline. Through the use of power for storytelling, words, images, music, and film, this message per trade the company not just as a carrier that delivered a superior experience but as a catalyst for connecting a new global culture of shared aspirations, values, enthusiasm, and dreams. Immediately after word, the strawberryfrog team spent 18 months at Emirates headquarters educating employees, making them foot soldiers in this campaign. In the early spring of 2012, the “hello tomorrow” brand was launched, a universal message in myriad languages in 150 countries. And television ads, an Emirates flight attendant pushed his drink cart as a mammoth A380 airline seem to be literally built around him, it’s various parts and personnel coming from country spanning the globe, providing proof that the airline was truly a global enterprise.

After reading the case above, please answer the following:

1. Human Resources is a critical component to a firm's value chain. Can you give specific examples of Emirates ability to integrate this into their firm? How does this set them apart from their competition?

2. What are some key value-creating activities the provided Emirates a competitive advantage over its competition? Why?

Answer 1

Solution –

1. Human component is definitely a critical component to the firm’s value chain. Emirates has its USP embedded in the quality of service and luxury provided to its customers. For this very reason they require a workforce which can give this experience to its customers at the various levels of touch points. There are specific examples how Emirates has integrated their workforce with their business strategy –

• All employees are specially trained and groomed
• They are cared for by the Emirates employee management policy – from their attire to their makeup and accessories all are standardized and managed by Emirates
• All employees speak various internationally acceptable languages and are trained to welcome guests onboard. This sets their workforce apart from their competitors.
• The 18 months training programs, the selection process, the motivational team building exercises – all of this allows Emirates to maintain a culture of quality and human care management.
• A certain value system is integrated with all the workforce to allow for implementation of the Emirates strategy on the ground
• The employees feel cared for and hence better services are extended warmly

All these factors related to the workforce gives Emirates a special competitive advantage.

2. Emirates certainly holds a competitive advantage over its completion due to the following reasons –

• Emirates has redefined luxury and quality – The kind of lounge services, in – flight catering, first – class suites, pickup and drop services and check – in services have given customers a sense of quality and luxury. This has also allowed them to charge premium prices.
• Strategic Location – Emirates uses the hub and spoke model from Dubai which is connected at a distance of 8 hours from all frequently travelled places around the world. This gives Emirates better connectivity and allows passengers to use Emirates without hassles and with lesser stoppages.
• The Workforce Efficiency – Emirates takes special care of its employees while hiring and trains its employees to provide services in sync with its overall strategy. The competitive supremacy of its workforce allows Emirates to provide superior services.
• Emirates maintains a huge line of aircrafts which allows for better coverage and less impact of maintenance and downtime. This give Emirates an added advantage to maintain its message of quality with its clients.

All this give emirates a competitive advantage by creating value for clients at every touch point.