The case study involves a detailed analysis of the factors that shape up the organizational environment of Emirates, one of the world’s most reputed international airlines. Emirates Airlines is owned by the government of Dubai, which is located in United Arab Emirates. Emirates Airlines has been operating for more than twenty years.
The growth and success of Emirates Airlines can be largely attributed to the consistent backing of the government. The support of the local government has certainly provided the necessary impetus to Emirates Airlines to move ahead of its competitors. The primary reason behind this is that Emirates Airlines is owned by the state government. A number of policies and regulations have been implemented by the government which is favorable for the growth of the airlines.
The open sky policy adopted by the government supports the expansion of the airlines. The open sky policy permits other countries to establish routes to Dubai. This particular policy enables Emirates Airlines to establish a strong connection with countries all over the world and thus maintain its status as a reputable international airline. As of now, Emirates Airlines are connected to about hundred different destinations in sixty countries, worldwide. The open sky police have enabled Emirates Airlines to extend its services to the secondary markets like Manchester and Newcastle in Britain, Hamburg and Düsseldorf in Germany or Kochi and Kolkata in India. Moreover, this particular policy minimizes the scopes of government interferences in the running of the airline. As a result, the airline authorities have the liberty to implement effective business strategies, without facing obstacles like stringent government rules and regulations.
The government and the airlines share common goals and interests. Thus, regarding any important decisions, generally there is full support on the part of the government.
One of the most favorable aspects of the political environment of Emirates Airlines is the liberal immigration laws and policies. This implies that passengers, who change airlines at Dubai International Airports, do not have to pass through strict immigration checking. Also the policies regarding transit visas for foreign passengers are much more liberal compared to the other major competitors.
The government positively promotes the travel and tourism industry, which is the main source of revenues for Dubai. As a result, the government takes initiatives to smoothen the operations of Emirates Airlines. Thus, in spite of frequent air curfews, Emirates Airlines can consistently maintain high fleet utilization rate. On an average the jets of Emirates Airlines fly eighteen hours on a daily basis.
The overall economic environment of Emirates Airlines is favorable and conducive to the growth of the business. The fuel costs that Emirates Airlines have to maintain are much lower than the other international airlines. In the current scenario of worldwide inflation, this particular aspect helps Emirates Airlines to minimize its costs. Low fuel and labor costs has helped Emirates Airlines to overcome the adverse effects of global recession.
One of the principal aspects of the economic environment of Emirates Airlines is that the employees do not have to pay income taxes to the government. This implies that the overall or gross salaries paid to the employees are much lower, as compared to the other major airlines. It has been studied that the labor productivity maintained at Emirates Airlines are quite high.
The social environment of the Emirates Airlines is congenial for the business. The cosmopolitan environment of Dubai acts as a stimulant as far as the growth of the airlines is concerned. As a popular tourist destination and financial hub, Dubai attracts people from all parts of the globe, which has given rise to an eclectic mix of...