The United Arab Emirates, is one of the most dynamic business locations in the world. In essence, the economies of the Arabian Gulf states are among the most dynamic in the world today. This is because wealth in these regions has been generated at what we can describe as historical rates (Rehman, 2007). This has been largely contributed by a boom in oil prices. The Gross domestic product (GDP) growth in the Gulf countries often approaches or exceeds the double digits, which have been attributed to the countries rapidly evolving demographics. In these countries, the youth make up approximately half the population which has led to high consumer demand.
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In essence, the states of the Gulf Cooperation Council – the United Arab Emirates, Saudi Arabia, Qatar, Bahrain, Kuwait, and Oman – have become promising places to do business.
Business firms in the UAE
In this paper, we are going to focus on business firms within the United Arab Emirates. The business firms which we are going to focus on are in the airline industry. Specifically, we are going to look at Emirates Airlines.
History of the airline
The Emirates was established in the year 1985 in Dubai. As an airline company, this firm started operating with two leased aircraft. These aircraft had only three destinations which included Karachi, Mumbai and Delhi (Doganis, 2006). The initial aircraft that were being leased by this airline was Boeing 737 and an airbus 300B4. Emirates Airlines is one of the world’s fastest-growing long haul carrier. It was recently ranked as the world’s second most profitable carrier, after Singapore Airlines. In the year 2005, the airline’s profits rose by 45% to $637 million at a time when the airline industry was accumulating losses. The following year Emirate’s passenger volume had risen to more than 17.5 million, which was a reflection of rapid growth that was taking place in Dubai (Graham, Papatheodorou, & Forsyth, 2010). This was occasioned by the fact that Dubai was considered as a commercial hub in the Middle East. In recent history, this airline has rapidly emerged as one of the most important success stories in the airline industry.
Emirates Airlines is part of a state-owned Emirates Group. This is a large diversified travel umbrella group which is owned by the state of Dubai. This Group emerged as a globally influential travel and tourism conglomerate that generated record profits of $ 762 million in the year 2006 (Ragaei, 1981).
Operations and strategy
In a sense, this airline enjoys a monopoly within this region. This is because the airline belongs to The Emirates Group, whose primary mission is to transform Dubai into a major economic and transport hub in the Middle East. In order to achieve this goal, Dubai has developed and pursued an “open skies policy” which allows over 100 airlines which are serving over 140 destinations to operate out of Dubai International Airport. The long term goal of this approach is to benefit from the traffic flows by attracting international tourists to the Dubai hub (Rehman, 2007). This is done because the Emirate Airlines is an airline which does not have a sizeable domestic market. The success of this airline has further been accelerated with the ideal geographic location of this region. In essence, this region forms a perfect link between the East and the West. Based on this, the Emirates Airlines has emerged to be a major competitor for the Singapore Airlines on long haul routes between Europe and Asia. A case in point is based on the fact that Emirates Airlines busiest city – pair markets include the Dubai – London and Dubai – Singapore (Ragaei, 1981). Furthermore, coordinating the prevailing airline policy regarding air travel has worked to benefit this airline. This strategy alongside the largest airline in Dubai has been able to establish a major hub in the name of Dubai International Airport.
The massive projects which have been taking place in Dubai have led to an increase in air traffic into this region which has benefitted the Emirates Airlines. The projections which had been adopted to attract 15 million visitors by 2010 had been realized to an extent. This increase in the tourists’ traffic paid off by bringing about major expansions within the region. For example, Emirates Airlines current order book stands at 124 aircrafts with a total value of approximately $30 billion (Rehman, 2007). Furthermore, it is the main launch customer for the famous A380 double-decker super Jumbo where it has placed 45 orders which cost $250 million each.
The consumer perceptions
The airline is regarded as a high class airline. This is because of the quality of the service that this airline seeks to provide its customers. This has largely been contributed by the branding that has been associated with this airline. Secondly the airline has invested in the latest technology in order to attract more clients. This has served to reassure the clients on the quality of services which the airline offers.
It is worth noting the fact that since this airline seeks to serve the tourists, the major strategy which has been employed by this airline is on quality of services. This airline has been recognized to be among the airlines which have got the best hospitality services (Nargundkar, 2010). This has in turn boosted the consumer perception with regard to the quality of service. The airline has got quality in-flight entertainment which has made it to be among a choice airline among most passengers.
The society’s perspective
This airline has made a mark from the society’s perspective. This has been occasioned by the number of initiatives that this airline has invested in. For instance, the management of this airline has focused on sponsoring international events and sporting organizations. This has improved the general perspective from the society (Rehman, 2007). However, in as much as this is the case, the general outlook of this airline has not changed. This is because it is considered to be a star studded airline implying that it has got slightly higher rates as compared to other airlines in the industry.
This airline has benefited a lot from its center of operations. This has made it to be among the best airlines in the world. It is worth noting that the operating environment within UAE has contributed a great deal to the success of this airline. In addition, the management of this company has ensured that the brand of this airline is associated with quality by investing in the state of the art technology and aircrafts. Essentially, business is all about strategy. The strategy which sustains any venture is usually based on addressing the needs of the customer.
Doganis, R. (2006). The Airline Business. New York: Routledge.
Graham, A., Papatheodorou, A., & Forsyth, P. (2010). Aviation and Tourism:Implications for Leisure Travel. London: Ashgate Publishing, Ltd.
Nargundkar, P. (2010). Services Marketing 3E. New Delhi: Tata McGraw-Hill Education.
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Ragaei, E. M. (1981). The Economic Development of the United Arab Emirates. New York: Taylor & Francis.
Rehman, A. (2007). Dubai & Co:Global Strategies for Doing Business in the Gulf States. California: McGraw-Hill Professional.