C07: Emirates Airline: Connecting the Unconnected

Question 1

Business Model Emirates

Answer 1

Different strategy than other airlines–>Focusing on premium experience instead of reducing prices

• offering mostly long-haul flights –>customers willing to pay more
• focus on wealthy customers
• Premium strategy in order to differentiate from established airlines

–>Sources competitive advantage: Governmental support –>state owned
- lower taxes
- low-interest loans
> geographic locations
> lower labor costs

Question 2

How does founding location Dubai help Emirate in achieving superior performance?

Answer 2

• Unique location
• Dubai at the nexus of global transit routes
• relative distance from congested European airspace
• subsidized fuel, no income tax, strategic synergies with government

Question 3

What are the strengths of the Emirate hub-and-spoke model? What are the weaknesses?

Answer 3

Strengths:

• Strong hub airport with access to new destinations
• financial support by the government

Weaknesses:

• growth at expense of congestion: short delay may have a large impact
• Mega- hub model probably does not function with new modes

Question 4

What considerations are important in Emirates choices of new flight destinations?

Answer 4

• seek locations where to offer direct flights
• enter underserved markets
• respond to competitive advantages in market or new network potential
• seek major growth regions

Question 5

Examples illustrating how changes in fligh destination characteristics can make these destinations more attractive or less attractive for Emirates

Answer 5

• demand lowers, because cheaper route available and fuel prices too high to simply use smaller planes