Introduction
Dubai World Central’s Al Maktoum International Airport is a major air transport facility in Dubai, United Arab Emirates. The airport is relatively new, having been commissioned in October 2013. In this paper, the author is will critically review this important fixture of global trade in Dubai. Among others, the mission statement and strengths of the organization will be analyzed in this essay. The author of this paper holds that the airport is crucial to the region’s participation in international trade.
Mission and SWOT Analysis of Al Maktoum International Airport
A Review of Al Maktoum’s Mission Statement
The mission of this organization is to be a major player in the future development of Dubai. It intends to achieve this role by becoming a hub of international commerce (Sinclair par. 4). The company’s mission statement is in line with Dubai Airports’ objective of creating world-leading air transport facilities. The aim of such developments is to enhance the prosperity of this region.
Dubai World Central aims at becoming the focal point of aviation and logistics in Dubai. In addition, the airport seeks to serve the wider Arab world, including the entire Middle East, Africa, the Indian sub-continent, and the Commonwealth of Independent States (Hypanchal par. 2).
SWOT Analysis
Strengths
Al Maktoum International Airport exhibits several internal strengths. Such attributes have influenced the success of the company in spite of the fact that it is a young business organization. Chief among the strengths of this company is the strategic location of the airport. As a country, Dubai is strategically located in the world’s geographical outlay. Consequently, the location of Al Maktoum Airport in relation to its operations falls within a competitively strategic location. Dubai is a critical connection point between the West and the East (Dubai World Central par. 3). The strategic location is significant given that a lot of international trade is conducted through Dubai. The location is especially important to the emerging economies of the Middle East, South Asia, and North Africa.
Al Maktoum has some of the best airport fixtures and facilities in the world. The complete first phase of the facility has the capacity to handle 600,000 tons of goods per annum. It has a 4.5 km runway that can accommodate the latest model of A380 aircraft. It also operates 24 hours a day (Dubai World Central par. 6). In addition, the airport has state-of-the-art communication towers. The management has also made arrangements for line maintenance services. It has fully equipped fire stations and other ultra-modern airport facilities.
The airport provides passengers with more schedules and route choices than other facilities in the region and in the world. Such services make it the favorite of international passengers. In addition, the customers are provided with complete travel package services. The combination of facilities, location, and quality of services gives the airport an unprecedented competitive edge over regional and global air transport facilities.
Weaknesses
Al Maktoum International Airport operates in a cross-board domestic and international market. To this end, the company is competing with other world leading global airlines, as well as with small local operators. Lack of clarity in the company’s strategic direction may seriously dilute its various capabilities. It may also result in brand confusion given the many firms operating in this market (Afshin 106). The weakness is, however, addressed by the carefully designed and future-oriented master plan put in place by the airport. The master plan is part of the overarching framework for Dubai’s economic future.
Opportunities
The opportunities associated with Al Maktoum International Airport are immense. The airline industry is growing rapidly in Dubai, especially considering the strategic location of the country as earlier indicated. The number of visitors in the region is increasing. The rise in the number of travelers passing through the city is associated with the central location of this country. It is estimated that more than 50% of people in the world live “within eight-hour flight of the country” (Dubai World Central 5).
Nataraja and Al-Ali (474) postulate that Dubai hosts almost six million frequent-flyer customers. It also operates the ten longest non-stop flights in the world. Al Maktoum International Airport is making plans to exploit this massive market. According to Ahrens (576), the government of Dubai operates an excellence program initiated in 1997. The program aims at promoting performance in governance and trade in the region. Al Maktoum International Airport can take advantage of this government intervention to enhance its services and foster future growth.
The global business demands are constantly increasing. For example, the demand for speedy delivery of products and services is on the rise. There is also increased connectivity in the world today. Consequently, the demand for airports and airline services has increased tremendously. An estimated 35% of global trade value is dependent on air transport (Ahrens 580). Such views are an indication of the high demand for air transport, an opportunity that can be exploited by Al Maktoum (Dubai World Central 5).
Threats
Despite the many opportunities that can benefit Al Maktoum International Airport, the organization faces some threats from the external environment. For instance, bus and train companies are increasingly improving speeds and the quality of services in relation to long and short distance routes (Hypanchal 12). As a result, these sectors are drawing customers from the air transport industry. The improved rail and road transport is providing the customers with alternative forms of transport.
Increasing costs of air transport constitutes another major threat to Al Maktoum’s operations. Airline charges are influenced by the high operating costs brought about by the rise in fuel prices, airplanes, and airport maintenance charges (Spong 16). As a result of this rise, customers are likely to opt for other relatively cheaper and more convenient forms of transport.
According to Rugh (23), global airlines are constantly monitoring the progress made by Emirates and Dubai Airport and Civil Aviation Authorities. The concerns of these airlines are associated with unfair competition from Dubai airports and airlines. The reason is that the government owns some of these airports and airlines. Such businesses can access subsidized services from the government, leading to unfair competition. Such claims of unfairness might discourage international airlines from investing in Al Maktoum International Airport, negatively affecting business for the company. Most international airlines are reluctant to invest in government-controlled airports (Ahrens 588).
Other problems facing this air transport company include fierce competition and economic recession (Guy and Savoie16). The factors constitute some of the determinants of future success in the aviation industry. Failure to take into consideration these external environmental factors may lead to failure of a company operating in the industry. Al Maktoum airport should be aware of these threats and deal with them appropriately.
Operations Management Decisions at Al Maktoum International Airport
Overview
Operations management at Al Maktoum International Airport is a major undertaking. The airport is operating at an unprecedented scale compared to other facilities in the world. The following constitute some of the operations management decision aspects in relation to Al Maktoum International Airport:
Location Strategy
As mentioned earlier, Al Maktoum International Airport is strategically located. Dubai is a major trading location in the Middle East, and especially within the United Arab Emirates. One of the major apparent factors in relation to operations management at Al Maktoum International Airport is the location of the facility, which was a major consideration when plans to establish the facility were made. The airport is a major aspect of aviation in the Middle East and neighboring regions.
The airport enjoys many advantages in terms of operations. For instance, the facility is connected to the largest container port between Rotterdam and Singapore (Jebel Ali Port). The port is seamlessly linked to Al Maktoum International Airport through the Dubai Logistics Corridor (Hypanchal 4). The connection constitutes a unified custom-bonded zone. It leads to reduced ground time and enhanced flow of cargo (Dubai World Central 6). In addition, Dubai World Central is a multiple logistics platform. Major trans-emirate roads are easily accessed from the airport. As such, one can argue that the location of the airport leads to increased connectivity, efficiency, and speed.
According to Dubai World Central (par. 5), leading players in the logistics business are already exploiting the strategic location of the airport. Such businesses include Panalpina, Aramex, and Kuehne Nagel. As a result, Dubai, a leading tourism destination in the Middle East, is the right location for an airport.
Process Capacity at Al Maktoum
Process capacity is a very important factor in operations management of any given business organization. It entails the throughput of the organization (Raynor 9). It is the number of units a given facility can produce and hold within specified durations of time.
Process capacity in relation to Al Maktoum International Airport entails the volume of passengers, airplanes, and cargo that can be handled by the facility. Hence, the capacity of the airport is a major determinant of its operations management. One of the driving factors behind the development of Al Maktoum International Airport is the growth of Dubai as a hub of international trade and a major tourist destination in the region. The growth led to increased volumes of cargo and passengers. Airliners came in to cater for this growth. Al Maktoum is designed to meet the outstanding requirements and projected needs of the aviation industry in this market. According to Sinclair (par. 2), Al Maktoum can cater for up to 7 million passengers annually. The airport complex provides the clients with catering services given the number of food outlets in the facility. Such provisions increase the airport’s process capacity.
Forecasting at Al Maktoum
According to Sinclair (par. 3), forecasting entails the prediction of future events or needs of a business. It is a vital component of operations management. It influences the production capacity of a business, personnel, and facility requirements. One of the objectives of Al Maktoum airport is to foster economic growth in Dubai. The organization targets the larger Dubai market. Its focus is not restricted to the aviation industry (Dubai World Central 6). Operations management at Al Maktoum International Airport takes into consideration these future requirements, especially in relation to the capacity of the facility. For instance, when completed, the capacity of the airport complex will increase to160 million passengers. It is also projected to handle 12 million tons of cargo per annum (Dubai World Central 5).
Al Maktoum International Airport is an important component of Dubai World Central broader economic hub. The hub incorporates a highly developed aviation district and a number of educational institutions. It also includes a number of aviation-related businesses and other facilities. In the recent past, international aviation services have increased rapidly in the region. The growth has made the region the center of this global industry.
Such airlines as Qatar, Emirates, and Etihad are shaping the global aviation industry. The success of these companies has attracted global investors to the region. As mentioned earlier, Dubai is a critical location to many emerging economies. Such economies include the Middle East and South Asia. Consequently, the operational and capacity projections of Al Maktoum International Airport aim at exploiting this rapidly growing market.
Design of Goods and Services
Every business organization strives to align the design of its goods and services to the needs of the customers (Raynor 8). The aviation industry is no exception. Customers in this industry exhibit a wide range of needs and wants. Airports, airlines, and other stakeholders strive to meet these needs. An analysis of the capacity of Al Maktoum International Airport reveals that the organization has aligned its services to the requirements of the regional aviation industry. In addition, Al Maktoum’s major objective is to develop the largest airport facility in the world (Bemadette 10). The objective is designed to meet the rising demand for aviation services in the Arab world.
The airport is aiming at accommodating the tremendous growth in the number of passengers in the Middle East. It also aspires to address the need for speedy cargo delivery in the world. The continued economic and social growth in Dubai constitutes an economic need that the airport seeks to meet. The country’s economic growth revolves around commerce, tourism, transport, and communication. Al Maktoum is designed to meet these present and future needs in the industry.
Operations Quality and Reduced Costs
Enhancing the quality of a given business process can substantially reduce the cost of business operations. Reduction of the cost is achieved in various ways. For instance, improving the quality of operations enhances efficiency of the various processes. The improvements translate to reduced wastes and elimination of production of substandard goods and services (Akao 20; Oakland 532).
By improving the quality of operations, Al Maktoum can reduce operating costs. For instance, the facility can provide more space for passenger and cargo freights. Such provisions may increase customer satisfaction, attracting more business in the long run. In addition, the costs of maintaining the airport would be catered for by the booming business.
Structural Effects in Supply Chain Management and Technological Innovation
Supply chain management entails the process of handling the flow of goods or delivery of services (Mentzer 3). On the other hand, technological innovation focuses on the development of new (or enhancement of already existing) technologies (Raynor 7). The supply chain and technological aspects of an organization may be affected by the structure of organizational operations (Daekwan, Cavusgil and Calantone 52). For instance, Al Maktoum possesses state-of-the-art equipment. As a result, the effective operation of the airport complex relies on regular updating of the equipment to reflect technological changes in the industry.
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