The UAE strongly orients on the development of its airlines to attract new customers and travelers. The most powerful airlines of the country are Emirates and Etihad every of which intends to provide the best service to the customers. Both companies are confident in their positions, and they collaborate with other partners sharing market and enhancing the quality of services. Of course, the level of competition is very high and it is important for every establishment to constantly analyze the current situation, improve the business, and propose the range of innovative technologies to satisfy the clients. Emirates and Etihad Airlines are strong competitors, each has a number of benefits but some of them are very weak and require considerable refinement to keep the leading position on the market and attract more customers.
Emirates Airline is the main airline in the Middle East that operates near 2180 flights weekly across the United Arab Emirates and Dubai (Krishnamurthy & Abdelrahman, 2016). The mission of the company is to achieve the top level of professionalism and gain the status of the best brand in the world. The vision of the firm is to make the civil aviation safer, more sustainable, and leading (Krishnamurthy & Abdelrahman, 2016). To fulfill the set goals Emirates Airline actively participates in the international aviation policy debates that significantly influence the aviation industry.
How it works
At the heart of the business model is an effective international competition. The management team of the corporation is sure that an open global economy is vital to fair and free trade, fuller employment, and economic growth (Krishnamurthy & Abdelrahman, 2016). The airline focuses on a strong collaboration with several major oil companies to supply them with jet fuel at the stable price. Thus, the business model that is built on the strategic fuel partnership proves that Emirates Airline supports its profitability on the oil market simultaneously staying on the top of the competition in aviation (Seal, 2014). The firm is concentrating on the huge investments in the long haul that enabled it to provide the haul flight service of the high quality by proposing the apparently cheap rate. The crucial aspect is that the company diversifies its investment portfolio into the areas of the airport services as well as infrastructure development taking into consideration its operational routes (Seal, 2014). The business model of Emirates Airline is also based on the flexibility that allows it to deliver the innovative products that are unique and relatively affordable in the market.
Emirates Airline has adopted the strategy of free competition. Numerous clients regard such a position as a positive move that will let Emirates Airline to enter the new markets without many hurdles to overcome (Seal, 2014). To develop the competitive business strategy the company increased its security that aims at forming a good image for the flight giant and building the preferred air carrier thus enhancing the quality of services (Krishnamurthy & Abdelrahman, 2016). The external competitive advantage is that the airline participates in the range of environmental programs, in particular work with the climate change or tree planting to support the positive corporate image.
The market share depends on the application of “open skies” strategy (Krishnamurthy & Abdelrahman, 2016). For example, the company shares Dubai Airport with the hundreds of other airlines hence encouraging the competitive force that helps to control the place of every organization on the market (Krishnamurthy & Abdelrahman, 2016).
The analysis of the overall performance showed that Emirates Airline constantly increases its capacity. For example, during the half of a year the general capacity grew to 31 billion Available Tonne Kilometres. Emirates Airline carried 29 million passengers between the beginning of April and the end of September of 2016 that is 9 percent more than the amount it reached last year (Seal, 2014). The cargo volume uplift remained stable at 1,4 million tones (Seal, 2014). The company continues to invest money in the development of the wide-body aircraft to raise the overall efficiency and provide its customers with more qualitative services (Dr. Krishnamurthy & Abdelrahman, 2016). The airway received 32 various aircrafts and is planning to increase its fleet by more than 20 planes before the end of the financial year (Seal, 2014). Besides, Emirates Airline expanded the global route by proposing new destinations.
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Etihad is another national airline of the United Arab Emirates that focuses on the delivery of the solid operational performance by achieving the continuous growth in the cargo volumes and the amounts of passengers. The mission of the company is sustainability and social responsibility that form the core of Etihad’s business process. The airline creates its strategy paying careful attention to the positive effect on the environment (“Etihad: Flying against Convention,” 2014). Etihad emphasizes the fuel-efficient flight supporting the policy of reduction, recycling, and reusing. Intense concentration on the environment the firm creates its objectives and mission taking into account the competitive global market mainly in the Far-East regions (“Etihad: Flying against Convention,” 2014). The vision of the company is based on the opening of numerous destinations in South Korea, China, Thailand, and Japan. Etihad is planning to create more than 15 new destinations establishing two Etihad lounges in the region by the end of 2019 (“Etihad’s Expansion: Thinking Big by Buying Small,” 2013).
The business model of Etihad relies on various ways of its development that include capital contribution with the alliance to possess enterprises, connection of flights with other partners, franchising, and relevant airlines (Powley, 2016). Applying such a strategic approach the company established impressive records in business. Etihad also orients on the “green” achievements regarding the transport sector that is reflected in the reduction of the carbon emission and decrease in the weight of plains (“Etihad’s Expansion: Thinking Big by Buying Small,” 2013). The key success aspects that are comprised in the business model encompass the number of subunits such as products, services, people, costs control, and partnership.
The competitive strategy of the company focuses on the attraction of new customers by providing the high qualitative service using the premium in-flight philosophy especially concerning the economy class. During the longer flights, the airline offers various hot beverages, numerous meals, and desserts (Powley, 2016). Besides, Etihad proposes to the clients Panasonic audio and video visuals that support in-seat capability for the live news. Not all competitors pay so meticulous attention to the comfort of the economy class. Moreover, the company cooperates with other airways in order to improve the quality of travel for its customers from the Far East.
Regarding the issue of the market share, it would be appropriate to notice that the main market of Etihad is India. The company operates 250 scheduled flights per week with the strategic partner Jet Airways from more than 10 cities across the country (Powley, 2016). Etihad Airline is also planning to establish a connection via Abu Dhabi to various cities in Africa, North America, and the Middle East together with Jet Airways (Powley, 2016).
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Etihad Airline showed the impressive results because it reached the input of USD 6 billion gaining the profit of USD 62 million (Powley, 2016). Every year the revenue of the company increases by not less than for 30-40 percent (Powley, 2016). Besides, the airway significantly raised its global cargo capacity to the record level, which led the firm to the rate of top 10 airlines that operate in the cargo transport (“Etihad’s Expansion: Thinking Big by Buying Small,” 2013). The crucial fact is that together with its partner Sustainable Bioenergy Research Consortium Etihad represented the important research, which showed that the desert plants fed with the seawater could produce bioenergy that is much more effective.
Comparison of Effectiveness of Both Companies
The analysis of two companies revealed that both of them significantly care for their clients and propose the highly qualified service. However, the research of the customers’ choice demonstrated that they gave 3,9 points to Emirates Airline and only 2,6 points to Etihad Airlines. Therefore, such statistical data testify that the majority of customers prefer the first company more (“Etihad: Flying against Convention,” 2014). The enormous competitive advantage of Emirates Airline is the number of its destinations, which constitutes 140. Hence, this approach helps to increase the number of standing clients who could use the same airline to fly in different countries of Africa, Asia, Europe, North America, and South America. The quantity of Etihad’s destinations is lower and comprises 96 that often makes the customers search for the alternative airlines (Krishnamurthy & Abdelrahman, 2016). The second benefit is that Emirates Airline sets the lower prize for the third bag when clients of Etihad should pay $175. Thus, this is an important aspect especially for the traveling families. The crucial item is that Emirates Airline provides the better-developed loyalty program for its customers. Every time they fly with this company they get an opportunity to receive rental cars or accrue miles, which can be converted into cash to fly for free, and other awards (“Etihad’s Expansion: Thinking Big by Buying Small,” 2013). Etihad Airlines have fewer advantages. However, one of its important benefits is the offer of more various foods and a la carte menu (Powley, 2016). Emirates Airline does not focus on the creation of menu with a great choice of meals paying more attention to the comfort of the flight and interesting proposals such as the onboard lounge bar. Nevertheless, Emirates Airline supports serving of vegan courses to their clients that is not peculiar to Etihad Airlines (“Etihad’s Expansion: Thinking Big by Buying Small,” 2013). Despite the wider range of merits of Emirates Airlines, Etihad continues to be the most significant rival. To keep the beneficial place on the aviation market Emirates Airline should pay more attention to the widening of special check in, which is an important issue for many business class clients (Seal, 2014). When Emirates Airlines can propose only ammunition, Etihad provides with archery equipment, boating/fishing equipment, boogie and skim boards, as well as musical instruments (Powley, 2016).
The analysis of two companies showed that both of them prosper on the market. However, the study of the customers’ likings demonstrated that the majority of clients prefer Emirates Airlines. In the research of the business class of both airways, it would be appropriate to notice that every firm has the number of beneficial sides. When Emirates Airline concentrates more on luxury matters, Etihad orients on the greater choice of food. However, vegan menu is proposed by Emirates Airline only. Besides, the company attracts its clients working hard on the innovative aspects, which help to improve the services. Additionally, Emirates Airline provides wider range of destinations that will win more clients for it. Despite being a strong rival, Etihad Airlines should place the increased emphasis on the development of specific and unique proposals in addition to applying more innovative technologies.