Emirates Airlines

Topics: United Arab Emirates, Dubai International Airport, Emirates SkyCargo Pages: 107 (12532 words) Published: September 13, 2014
9 -7 1 4 -4 3 2
JANUARY 29, 2014


Emirates Airline: Connecting the Unconnected
Late afternoon was fading to dusk as Tim Clark, President of Emirates Airline, gazed out at the large crowds mingling outside at the 2013 Dubai Airshow. Front and center at the event was the official program launch of the Boeing 777X, a massive new hit thanks to Emirates’ record order of 150 new planes. Valued at $76 billion at list prices, this was the largest airplane deal ever inked. Letting his thoughts drift, he noted, he imagined with pride these planes joining the collection of widebodied Emirates planes assembled on the tarmac of Dubai International Airport, ready to ferry passengers from Europe, Asia, Africa, the Americas and the Gulf to their respective destinations. This is the face of the global economy, he thought to himself, as he marveled at his company’s success. Emirates was indeed a global success story. In just twenty-five years the airline had grown to become the third-largest airline globally by capacity and the largest by number of international passengers.1 (See Exhibit 1). Twenty-three new routes were added in 2012 and 2013,2 and capacity growth was expected to increase by 18.4% in 2013 thanks to deliveries of new aircraft, including the new A380s deployed to over 20 destinations.3 Emirates anticipated that its meteoric growth would continue and was building its fleet accordingly: with 41 A380s integrated into its fleet thus far, another 99 were scheduled for delivery in the coming years (See Exhibit 2).4 At the same time, several trends threatened to stymy the airline’s growth. Chief among them were the new 777Xs and A380s themselves. How would Emirates deploy these craft amongst its existing fleet and across new routes? Was investing over $117 billion in a fleet expansion over the last three years (including $76 billion on 777Xs and $23 billion on A380s this year alone) a shrewd strategic move or a costly mistake in today’s increasingly competitive aviation market? 5 Secondly, as Emirates tried to enter new markets and compete with legacy carriers on international long-haul routes, protectionist aviation policies had surfaced in countries such as Canada and, to a lesser extent, Germany. Would Emirates’ push into new markets evoke similar reactions from other governments? Thirdly, as Emirates’ global reach expanded, untapped markets were increasingly difficult to find and exploit. Trans-Pacific markets, for example, remained attractive expansion targets, but would require a fundamental move away from Emirates’ sole hub in Dubai. Would its “mega-hub” model still function with new nodes? Finally, in a hotly contested market to capture the premium passenger segment, several of Emirates’ product innovations had begun showing up in other regional airlines. Could Emirates continue to innovate and stay ahead of competitors?

________________________________________________________________________________________________________________ Professor Juan Alcácer and John Clayton (MBA 2013) prepared this case. It was reviewed and approved before publication by a company designate. Funding for the development of this case was provided by Harvard Business School, and not by the company. HBS cases are developed solely as the basis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management.

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