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Marketing Analysis of

Emirates Airlines

Presented By: Aashish Singh


Chitraksh Kapil
Jerry David
Manik Kataria
Varuna Singh
Vatsal Solanki

Introduction
In just 100 years, aviation has become an essential part of our
global infrastructure.
It has become a catalyst for change.
In 2014, airlines will safely transport 3.3 billion passengers and
move 50 million metric tons of cargo across a network of 50,000
routes.
Aviation industrys global economic impact is $2.4 trillion, equals
to 3.4% of worlds GDP. The industry supports more than 58
million jobs worldwide. (Tony Tyler, 2014)
Source: Tony Tyler, IATA 70th Annual General Meeting Review,

Aviation Life Blood of Global Economy


In 2013, the airline industry made a collective profit of $12.9
billion on revenues of $ 708 billion. Its a net profit margin of
1.8%.(Doha,2014)
Put in a another way, the airlines made a profit of $4.13 on every
passenger carried.
The passenger business is more robust growing at 5% to 6%.
Cargo volumes have not grown since the post recession spike in
2010.
Source: Economic Performance of the Airline Industry, 1 st June 2014 v3, Doha 2014

Source: Airline Industry Forecast, 2014


http://www.iata.org/publications/Pages/airline-industry-forecast.aspx

Aviation is a Team Effort


March 2014, Malaysian Airlines disappearance sent shock
waves through the industry.
Accidents are a rare phenomenon in the industry.
In 2013, of 29 million flights there were only 12 hull losses.
That is 1 hull loss for 2.4 million flights.(Doha,2014)
Working in partnerships to find global solutions for
common problems is the hallmark of the aviation industry.
Source: Tony Tyler, IATA 70th Annual General Meeting Review,

Source: Tony Tyler, IATA 70th Annual General Meeting Review,


Doha 2014

Benefits of the Aviation Industry


Over 52% of international tourist travel by Air.
In Africa, visitors arriving by air directly support 2.5 million jobs.
According to the UN, 230 million live outside their country of
birth. Fast labor mobility is best serve by the industry.
Aviation pays for vast majority of its infrastructure. In 2012,
airports invested in $ 19.3 billion in construction projects,
creating jobs while building infrastructure. (Johnathan Berman,
2013)
Source: Johnathan Berman. 7 Reasons Africas time is now- 1 st October 2013.

Benefits of the Aviation Industry


Nearly1,400 airlines operate a fleet of 25,000 aircraft
worldwide.
Airlines are served by 4000 international airports through a
route network managed by 173 air navigation service providers.
Airlines carry 8.6 million passengers and conduct 99,700 flights
everyday. (Tyler, 2014)
Aviation is responsible for 35% of the worlds trade by value.
Equivalent to $6.4 trillion worth of goods annually, or $17 billion
worth
ofhttp://www.pwc.com/en_US/us/industrial-products/assets/pwc-aerospace-defense-2013-year-in-review-andgoods everyday.(Thompson, 2013)
Source: 1.
2014-forecast.pdf
2. IATA Annual Review, by Tony Tyler 2014.

Benefits of the Aviation Industry


Manufacture of aircraft has global aircraft.
More than 65 Japanese companies support the Boeing
program, accounting for 22,000 direct and indirect jobs,
which is 40% of Japans aerospace industry. (Tyler,
2014)
When Airbus A350XWB reaches its full production
capacity, it will account globally for 34,000 direct and
68,000 indirect jobs.
Source: IATA Annual Review, by Tony Tyler 2014.

Facing High Jet Fuel Prices


Jet fuel is averaging around
$124.5 per barrel. For the
past three years it has
averaged at $127 per barrel.
The growth in US energy
supply has force a moderate
decrease on jet fuel. But fuel
to be the largest number in
the debit column, accounting
for 31% of the costs.

Source: IATA Airline Financial Monitor, 7th November 2014.


http://www.iata.org/whatwedo/Documents/economics/Airlines-Financial-Monitor-Oct-14.pdf

Environmental Responsibilities
Airline operations produce 705 million metric tons of CO2 emissions.
Total man made emission in 2013 was 36 billion tons.
Industry is already delivering on its target to improve fleet fuel
efficiency by 1.5% per year.
By 2050, the industry is committed to reduce its net carbon footprint
by 50% as compared to 2005. (Thompson, 2013)
A four pillar strategy of new technology, efficient operations,
improved infrastructure and market based measures.
Source: Aerospace & Defence, 2013 PriceWaterhouseCooper.
http://www.pwc.com/en_US/us/industrial-products/assets/pwc-aerospace-defense-2013-year-in-reviewand-2014-forecast.pdf

Source: Tony Tyler, IATA 70th Annual General Meeting


Review, Doha 2014

COMPANY INTRODUCTION
Founded in 1985
Based in Dubai, UAE
Headed by CEO and Chairman, Ahmed Bin Saeed Al
Maktoum
Subsidiary of The Emirates Group, wholly owned by
Government of Dubais Investment Corporation of
Dubai
Largest airline in Middle East in terms of revenue,
fleet size and, passengers carried operating nearly
3400 flights per week from its hub Dubai
International Airport
Source: www.emirates.com
Ranks among
top ten carriers worldwide in terms of
passenger kilometre

SEGMENTATION IN AVIATION MARKET


Type of Traveller: Whether a business traveller, Leisure
Traveller, Traveller on a Religious Tour and so on.
Travel Pattern: Frequency of flying
Demographics: What age group are the travellers
come from? What sex and social class traveller belongs?

Source: www.emirates.com

STP OF EMIRATES AIRLINES

SEGMENT

Passengers Preferring Luxury,


Comfort and Reliability

TARGET

Corporates, Upper Middle Class

POSITIONIN
G

Premium Airline
Source: www.emirates.com

SIZE OF THE TARGET SEGMENTS OF EMIRATES


NATIONALITY

Emirates have global


audience with middle
east and Europe as their
main focus

INDIAN SUBCONTINENT

7%
2%
11%

EUROPE

25%

AUSTRALIA & NZ

11%

Indian Sub-continent is
also a major serving
area of Emirates

12%

MIDDLE EAST

32%

AFRICA
FAR EAST
AMERICAS

Source: Ice Media Kit,


www.spafax.com

SIZE OF THE TARGET SEGMENTS OF EMIRATES


GENDER

REASON FOR TRAVEL OF PASSENGERS


BUSINESS

8%

LEISURE

39%

19%
Male

OTHERS

53%

81%

Source: Ice Media Kit,


www.spafax.com

Female

Sky-Trax has awarded Emirates Airlines as


Worlds Best Inflight Entertainment for the 10th
year running
ICE System
Information (I): Read about
Dubai, Catch up news and
sport and BBC News.
Communication
(C):
Wi-Fi,
Mobile
phone
and,
data
roaming services. Post a blog,
make a call, or send an e-mail
as you fly
Entertainment (E): Hollywood
& Bollywood movies, music
Source: www.emirates.com
hits, T.V. shows and, latest

CONSUMER DECISION IN
AVIATION
Decide
Time

Shortlist
Destinati
on

Make
Booking
Source:
a. D.L. Hawkins, Consumer Behavior Trends 11th edition,
2010
b. www.paragise.com/cv/year%202%208.doc

Compare
Brochure,
Select Best
Itinerary

CONSUMER BEHAVIOUR
TRENDS
Chauffer
Drive service in 70 cities

all over

the world.
Lounges in International Airports across six
continents

Source: www.emirates.com

CONSUMER BEHAVIOUR
TRENDS

Meet the world at 40000ft: On-board


Lounges
Reawaken your senses: On-board
shower spa

Source: www.emirates.com

TARGETING YOUNG FLYERS


Kids T.V. shows, popular
cartoons and, range of
inflight games.
Soft toys for small kids
Special
and
healthy
appetite for kids between
2-12 years of age
Sleep bassinets
for small
Source: www.emirates.com
kids

Source: www.emirates.com

26th consecutive year of


profit
JetBlue bilateral code share
agreement

Qantas-Spur Tourism
Right infrastructurepartners in Dubai
70m passengers
in 2020

THEY ADOPT MESSAGE DEPENDING ON


TARGET AUDIENCE

Source:
www.dailymail.co
.uk

Emirates average fleet age

Emirates average fleet age

Source: CAPA Fleet

Competitor Analysis
Point of Parity
Both Emirates Airlines and Etihad Airways have stemmed from the same
country United Arab Emirates
In effect, we may conclude that both carriers have the same philosophies
and core values
Both Emirates Airlines and Etihad Airways cater to the premium segment of
travellers. Their target group is Corporate/Middle and Upper Middle Class

Source: www.centreforaviation.com

Competitor Analysis
Both are sponsors to leading football clubs in the field of football.
Etihad Airways Manchester City
Emirates Arsenal
Point of Difference
Though both carriers stem from the same country, they are the ventures
of two different Emirates (state). Emirates Airlines belongs to Dubai
whereas Etihad Airways was introduced by Abu Dhabi

Source: www.centreforaviation.com

Competitor Analysis
Etihad is backed by an oil rich state / supplier whereas Emirates is
backed by an oil buyer
Etihad is a relatively new venture which was founded in the year 2003.
Emirates first flight was in the year 1985.
Emirates has a network of 190 destinations, Etihad has just 55
extensively networked destinations.
Emirates is a prolific advertiser, Etihad has a relatively dormant
advertising policy.

Source: www.centreforaviation.com

Main Market Competitors

Qatar Airways
Etihad Airways

12.1%

Global Market Share


13.3%

9.7%

Source: CAPA - Centre for Aviation


and OAG

Comparison on the basis of Passenger growth, fleet size and Destination

Carrier

CY2013
Passengers
transported
and growth

Destinations
served

Fleet size
aircraft in
service

Emirates

39 million, 16%

128

212

Qatar

18 million, 6%

124

126

Etihad

11.5 million, 12%

79

88

Source: CAPA - Centre for Aviation


and OAG

Network Structure
Airport Traffic

Emira
tes

Qatar

Etihad

42 AsiaPacific
35 Europe

44 AsiaPacific
30 Europe

7 AsiaPacific
42 Europe

Source: CAPA - Centre for Aviation and OAG

STRENGTH & WEAKNESSES OF QATAR


Strength
Advantage of Being Present in Oil
Rich state
Strong Backing of Qatar Government
Weakness
Heavily on International Onward
Moving Traffic
Market share growth is restricted
due to intense competition level
Source: CAPA - Centre for Aviation
and OAG

STRENGTH & WEAKNESSES OF ETIHAD


Strength
Fast Paced growing Airline
Successful partnership Virgin Blue
Australia
Weakness
Fewer Destination than
competitors
Some customers complained
about longer waiting time in
connection flights
Source: CAPA - Centre for Aviation
and OAG

DISTRIBUTION CHANNELS OF AIRLINE INDUSTRIES


Distribution Channels :
In all areas of marketing, links must be made between the customer
and the
product.
Types of Distribution Channels :
Product/Servi
ces

Airline
Reservation
System

Customer

Third Party
Reservation
System(GDS)
Airline
Reservation
Centres

Online Travel
Agent

Retail
/Corporate
Travel Agents

Fly Emirates Distribution Channels


Forward-looking companies are trying to make their distribution
channels more flexible. Narus,1996

1. Emirates emphasize the customers to book directly online


2. Emirates relies on travel agents, because of the importance for
them of emerging markets with low internet penetrations coupled
with low credit card usage
3. While most Airlines have stopped approaching travel agents,
Emirates still offers 7%
commission in Australia and 5% in India
. Channel 1: Direct-to-customer
- Call Centre Agents
- Company Owned Websites ( Disintermediation)
- Company Owned Smartphone Application
- Airport Ticket Offices
- City Ticket Offices
. Channel 2: Travel agent as intermediary
- Offline Mode for Customers ( GDS)

Emirates Current mediums of Distribution Channels


Owns a sister company Dnata which acts as a direct Travel Agency.
Emirates and Sabre Ink 10 year Global Airline Distribution
Agreement (GDS) since 2008.
Travelport announces a 5 year agreement with Emirates since 2010.

Source : Morgan Stanley,


2013

Emirates Distribution Strategies


Intensi
ve

Exclusi
ve

Selecti
ve

Low offer of Emirate tickets


Only through Direct Channels
Total control of its marketing activities
Analyze the demand for its service

Allocates airline tickets to travel agents who are friendly


related with its business
To cover wide geographic area

Special offers are given to selective customers or operators


Through External Distribution Channels

Research on Future Selection of


Distribution Channel: :

Source : Morgan Stanley,


2013

Source : Passenger Decision Making Behavior


and
Implications for Airline Marketing

Global Channel Share From 2013 - 2015

Source : IATA

BCG MATRIX
As market share
rises,profit margin on
sales increases sharply
Buzzell , 1975.

Business
Class
First Class

Economy
Class

Market share is more important for infrequently purchased


products than for frequently purchased ones. - Buzzell , 1975.

Profit Cycle
5400
5100

Profit ( AED Million)

4800
4500
4200
3900
3600
3300
3000
2700
2400
2100
1800
1500
1200
900
600
300
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Year
Source : Datas from Emirates Group Financial
Statements

Product Life Cycle


18000

Profit Based on Sales Volume


(AED Million)

16000

Developme
nt Stage

Introduction
Stage

14000
12000
10000
8000
6000
4000
2000
0
0

10

15

20

Years
Source : Datas from Emirates Group Financial

25

30

Stealth Positioning
It can give products a fresh run at the life cycle and keep them from languishingor
dying outrightin the introduction phase.
Economy Class Can be Stealth Positioned to gain its growth in market share.

When a breakaway product succeeds in leaping out of its


category and into a new one, it can redefine its competition.Moon , 2005

Perceptual Mapping
Important

Multi-Stop
Flights

Safety Ontime
Arrivals
Variety of
routes
Special
Deals

Brand Weakness

Brand Strengt

Good InFlight
Service
Unimportant

Increase its
Services to New
York JFK

t
u
b
ri

Res
t
pas art two
s
from enger weekly
fligh
16t
ts t
hD
o
ece
mbe Erbil
r 20
14.

t
n
co to y, nd
to n o m P a
0
o
on illi on GD er 02
i
at 1 b ec its ov y 2
i
Av 53. ais to ort s b
$ ub % pp ob
D 7.5 su 0 j
3 ill 00
w 50,
7

Source:

Onboard WiFi

Emirates to grow African


operations & network by 40%
in coming decade

The Emirates App

Book flights
Store and use boarding pass offline
Get push alerts for chauffeur-drive service, flight
boarding, seat selection, gate changes, baggage belt
numbers and check-in
Dietary Requirements

Bibliography
Alcacer, J. & Clayton, J., 2014. Emirates Airlines. Harvard Business Review.
Berman Johnathan., 2013.7 Reasons Africas time is now. Harvard Business Review
Fox J., 2013. Which is worse: Airline monopolies or Airline competition.? Harvard Business Review
Kim, W.C. & Mauborgne R., 2009. How strategy shapes structure. Harvard Business Review
Tyler, T. IATA Annual Review, 2014
Porter, M.E., 2008. The Five Competitive Forces That Shape Strategy. Harvard Business Review
Burke A. & Stephanie H., 2013. How Competition Strengthens Start-ups. Harvard Business Review
Kotler Philip, 2009. 13th Edition, Marketing Management : A South Asian Perspective.
Ramaswamy V.S., 2010. 4th Edition, Marketing Management
Hawkins D.L., Mothersbaugh D.L. & Mookerjee A. 2010. 11th Edition, Consumer Behavior
Trends

Websites
http://www.worldairlineawards.com/ [Accessed on 12 th November, 2014]
www.academia.edu/5494792/Emirates_Strategy [Accessed on 15th November,
2014]
www.emirates.com/ [Accessed on 15th November, 2014]
http://www.spafax.com/download/media-kits/emirates-inflight-mediakit-2013.pdf
[Accessed on17th November, 2014]
http://www.airlinetrends.com [Accessed on 19th November, 2014]
Target Market and Marketing Strategies of Emirates Airline
http://www.sturesearcher.ch/?p=787 [Accessed on 20th November, 2014]
http://www.economist.com/node/16271573 [Accessed on 21st November,2014]
http://centreforaviation.com/analysis [Accessed on 18 th November, 2014]
http://www.travelweekly.com.au/news/emirates-sees-sharp-lift-in-market-share-1
[Accessed on 22nd November, 2014]

http://centreforaviation.com/analysis/indias-airlines-lost-usd165-billion-in-fy2013-capa-india-aviationoutlook-201314-part-4-111778
http://www.travelweekly.com.au/news/emirates-sees-sharp-lift-in-market-share-1
http://fshahim.com/2013/07/01/gulf-based-airlines-ambitions-and-its-implications-on-its-customersand-competitors-in-europe-and-the-united-states
http://www.aspireaviation.com/2013/08/07/etihad-airways-equity-alliance-strategy/
http://centreforaviation.com/analysis/emirates-qatar-airways-and-etihad-airways-opportunities-forairports-as-gulf-airlines-expand-18668

http://www.iata.org/whatwedo/Documents/economics/IATA-Economic-Performance-of-the-Industrymid-year-2014-report.pdf

http://www.mbaskool.com/brandguide/airlines/525-etihad-airways.html [Accessed on 16th


November,2014]