Emirates is an airline based in Dubai and is a subsidiary of The Emirates Group owned by the government of Dubai. Emirates has highly successful integrated business and operating model in the airline industry. It operates over 3300 flights per week or over 20 flights per hour.
The core business of Emirates is to transport passengers from one place to another place in highly efficient way while delivering excellent customer services. It serves 144 cities in 81 countries. Emirates also has cargo business but smaller in revenue. For the year ending March 2015, Emirates carried 50 million passengers (10.7% YoY growth) and 2.4 million tones of cargo (5.6% YoY growth). What Emirates really did across its network on six continents was connecting people to places and businesses with opportunities.
For the year ending March 2015, overall revenue of Emirates was AED86.7 billion (USD23.4 billion) with 7% YoY growth. Approximately 81% revenue is from passenger sales. Emirates has operating profits of AED5.9 billion (USD1.6 billion) with 38% YoY growth. Overall profit margin stood at 5.1%.
Figure 1: Emirates Revenue (AED billion)
Figure 2: Emirates Operating Profits (AED billion)
*1 AED (United Arab Emirates Dirham) = 0.27 USD
Emirates Operating Model
In order to deliver high commercial success, customer satisfaction and to transport huge number of passengers, Emirates invests a ton of money in customer service, buying new aircrafts and upgrading its own airport terminal at Dubai Airport.
Emirates fleet consists only of wide-body aircraft and maintains policy of operating young fleet (average use of an aircraft is 6.3 years). As of September 2015, total of 229 aircrafts are in service and 268 aircrafts are in order. Emirates is the largest operator of A380 with 70 A380s in operations and 70 in orders. Emirates also has one of the highest utilization of an aircraft – 13.7 hours per day.
What Emirates does the best is to transport huge demand from multiple points to different locations through its hub. For example, assume Emirates has six aircrafts, five of them flying from different points in Asia to Dubai and last one flying from Dubai to London. All five aircrafts from Asia should land at Dubai within acceptable time window (within 3-4 hours) to send those passengers on single flight to London. Scale this model to a network of 144 cities with different time zones and with use of 229 aircrafts. Designing schedule to achieve seamless and hassle free traveling for passengers and at the same time optimizing revenue is very challenging.
Designing schedule is only one aspect, one also has to manage the schedule on daily basis given different challenges that take place around the world. Emirates has huge operations control group that successfully manages the fleet of 229 aircrafts around the world (with different time zones); any delays; technical problems; weather challenges etc. This group forms core of operations along with successful ground operations team at the airport. A peek into the Emirates control room video:
Getting passengers on board is one component to be a successful airline. An airline also needs to service passengers within the flight through different services such as great meal, connectivity through internet and in-flight entertainment system.
Emirates flight catering: This facility has over 450 chefs preparing meals for over 1500 different menus. More details in below video:
Emirates also provides Chauffeur-drive service for First and Business Class passengers in 74 cities. As Emirates strives to meet the needs of its customers who want to stay connected while they travel, onboard connectivity is a key focus. Emirates invests over US$20 million annually to install and maintain Wi-Fi services across its fleet.
Apart from this Emirates has whole terminal at Dubai Airport for itself to manage its operations. Dubai Airport is a separate operations model by itself. Success of operations at Dubai Airport is one of the reasons for the success of Emirates. National geographic has multiple documentaries on Dubai airport. Ultimate Dubai Airport is one of them. Peek into its trailer:
Emirates has never compromised on its branding. It’s the Emirates brand that has made the airline successful. Emirates is the world’s most valuable airline brand, with an estimated value of US$6.6 billion according to the 2015 Brand Finance Global 500 report. Emirates has sponsored all major sports events such as 2014 FIFA world cup, 2015 ICC cricket world cup, Arsenal football club, Real Madrid football club, Tennis – US open. Emirates works with celebrities for its branding purposes. Latest ad featuring Jennifer Anitson.
Overall to be successful commercially, Emirates has to be successful in all operational aspects of the airline business.
Figure 3: Emirates Operations Chart