Emirates ordered 140 A380s during Nov 2013 Dubai airshow when many analysts were concerned with existing fleet ongoing challenges in terms of global network operations and overall life cycle costs. This had imposed a big challenge to Emirates’ management to start planning for effective deployment of those aircraft to its network and potential profitable routes. Emirates took delivery of its 100th A380 in Nov 2017.
By January 2018, Emirates ordered 36 extra A380s, buying 20 and retained option to take 16 more, taking total A380 fleet size to 178 aircraft, saving Airbus’s flagship commercial plane from the scrapheap. Deliveries will start in 2020 and the value of the deal is $16 billion at current list prices. Some of these new A380s ordered will be used as fleet replacements. Emirates will enhance the aircraft on-board product, so as to offer passengers the best possible experience. The A380 with technology advantage and real estate on board gives additional room to do something different with the interiors.
Emirates has based its rapid expansion on the superjumbo, carrying millions of passengers through the Dubai hub. The A380 aircraft potentially has a future in a world where air traffic is expected to double over the next 20 years, although airport slots in many large cities are limited.
An article by The Royal Bank of Scotland discussing “90 A380s challenges” will be provided to aid your research. Keeping this in view, you are required to address the following questions:
1. What factors account for the success of Dubai’s aviation sector in terms of the product of strategic decisions that the government of Dubai and the aviation sector have taken in the past and as influenced by external and internal environment (strengths and opportunities)? Discuss the future growth taking into account the historical developments in the aviation scenario.
2. Is the prime airline segment an attractive place to compete? Using the information presented in class and other relevant sources use Michael Porter’s five forces model to analyze the competitive environment for Emirates and similarly the scale of the threat from other Gulf airlines, to the rest of the world. The analysis should consist of five parts (five forces), which should cover (a) threat of entry, (b) power of suppliers, (c) power of buyers, (d) threats of substitutes, (e) competitive rivalry.
3. How can Emirates continue to survive/grow/expand and deliver a value and prime service to its customers, while threats and lobbying pressures continue by European and US carriers. Identify various aspects about how Emirates can add value. Explain how European/US airlines threatened by Emirates will keep up the pressure against Emirates in view of international laws and policies. What are European Network carriers’ current and future strategies? US and Canada are also trying to hinder Emirates progress within their region, discuss Emirates strategy to ease these pressures and survive this turmoil?
4. Review the fleet and network growth plans available in other relevant sources. Discuss how Emirates would develop a sound strategy to operate those 178 A380s by the year 2024 and achieve the planned profits whilst sustaining its competitive advantage? What consequences are there if there is a severe downturn in the global economy and passenger demand declines?
Notes: 3,500 – 4,500 words.
This report is designed to demonstrate and assess a number of module learning outcomes, particularly those related to the analysis and application of information of strategic management and implementation. While writing the assignment, references to literature, course handouts and points of theory and principles may add support to the analysis. They should be relevant, appropriate and properly cited, and not made in isolation from case issues.
Where you feel further Strategy information or other data would be required, state these requirements and briefly relate how the information might be obtained. Specify any assumptions that you make.