Customer Acquisition
A few years back, Emirates Airlines adopted the use of wireless Internet access on one of its new Airbus. The same services were expected to be rolled out by both Lufthansa of Germany and Scandinavian Airlines within almost the same time. However, before rolling out this service, the main communication tool that was available for use by passengers was the seat phones, which due to their expensive nature were not commonly used.
Given these high prices with respect to the use of seat phones, there was great lobbying by the general Internet community for the use of Wi-Fi access since it could have benefited the retailers who were to use it as a tool of customer acquisition1.
For a small café, the complete cost of providing a Wi-Fi access that is free was approximated to be about six Unite State dollars. Comparable to a billable hot spot, this was cheaper since the billable hot spot requires additional expenses such as provision of customer support and maintenance costs for Internet speed.
Although the free model would not suit application in all places, it would eliminate the adoption problem that was present at that particular time.
As far as air travel is concerned, the Middle East is presently the leading global region in growth of traffic. According to statistics, there was double-digit growth in passengers between 2004 and 2006.
Presently 8% of global air traffic is represented by the region. The increase in number of passengers is similarly reflected n the rise in freight. In view of these statistics, it is not shocking to see thee civil aviation of the Emirates Airlines work at expanding their civil aviation infrastructure at a very rapid pace. The authority has recently undergone restructuring with the airports being managed by the new Dubai Civil Aviation Authority.
Dubai is investing about $ 82 billion to transform the Emirates into one of the greatest global airlines. The plans for expanding the Emirates airlines are quite ambitious. In the year 2006, 20.6 million passengers passed through its gates and more than 237,000 aircraft transported at least 1.4 million freight.
Comparatively, during the same time, Hartsfield, the world’s busiest airport had about 85 million passing through its gates whereas 68 million customers were served by London Heathrow.
The government of Dubai is not fully satisfied with the figures and it has made a move to add two more concourses and a third terminal. They have expectations of between 60 and 70m million passengers annually. The Airlines of Dubai International Airport have been extended to accommodate the new Airbus A380 and actually, the Flagship of the Emirates Dubai has been able to make an order of 47 of the Aircraft2.
In addition to this, the Dubai Cargo Village, which is a dedicated site for cargo handling and adjacent to Dubai International Airport, is also undergoing extensions to handle about two million tonnes annually and is currently handling almost at double capacity.
As far as expansion of capacity is concerned, both Dubai Cargo Village and the Dubai International Airport are experiencing the same challenge: after completion of the current extensions, there will be no room for growth at their current locations.
The facilities are encompassed by urban sprawl as a result of the growing capacity within the city3. Apart from the greatest order for the new Airbus, double Decker plane, Emirates Airlines ordered a new Aircraft worth $37 billion. Below is a table for the company’s airport traffic between 1997 and 2006.
Source: HWM. The Wireless revolution: Experience New Ways of Living Wirelessly. Singapore: SPH magazines.2004.
Customer retention
The major players in Indian Airline industries include Emirate Airlines, Air Sahara, Jet Airways, Lufthansa, Air Deccan, Air India, and Indian Airlines. As a result of the boom in IT, and other IT associated services, these airlines have exhibited a large potential for air traffic increase. Prior to its privatization in the 1990s, the airline was under the government control.
Operation of private airlines was still restricted. After the airline industry was opened to private players, the competition heightened between both private and public players. Prior to privatization, little importance was attributed to customer satisfaction in the industry.
When private players offered quality service and thus attracting more customers, the public carries such as India Airlines and others began seeing the significance of quality customer service4.
Some of the strategies these players use to both attract and retain customers are not only innovative but also convenient. They include using the Internet and phone to book, serving the customer needs by showing care, check in using phone, serving different kinds of meals, crews, and airhostesses that are highly trained.
The kind of customers served by the industry totally changed since the opening of the market in 1990s. Lately, clients travel globally to experience airline facilities that are of top quality5.
To ensure that these premium customers have been taken care of, the level of service ought to improve largely. The crux of customer retention is not only understanding different cultures but also ensuring that customers have made happy.
Whereas the focus and desire of business people and high-end customers is customized services and sophistry, cost efficiency is the key factor in the economy segment. These two extremes must be balanced by an airline provider. When the market gradually changes and expands, it provides sufficient room to concentrate on a specific category of customers.
If a given player begins to focus on a particular category of customers, then such a player will become a great competitor and would be able to compete effectively among other competitors. Therefore, the dynamics of the entire industry dynamics towards clients will begin to change, making each player to improve their level of service so as to retain customers6.
Studies show that a service is essentially non-tangible. Therefore, even though the provision of airline related services at times entails tangibility such as environmental aspects, presentation and quality of food, it remains to be intangible and dependent on the service quality from the customer’s perspective, as a distinctive aspect.
Moreover, the lack of separation between production and consumption results to its Perishability and the heterogeneous nature of the service experience. Within the commercial airline business, an opportunity cost belonging to the operator is represented by a vacant seat on a frequently scheduled flight. A lot of variability is involved with regard to in-flight service’s quality.
This service is greatly enhanced by the customer – provider interactions. The most important thing in this case is how the customer perceives the quality of the service rather than the actual service itself7.
Customer Recovery
Due to difficult conditions in trading, the Gulf Air (United Arab Emirate’s national carrier) devised a recovery plan to get back its profits. This was to take place within three years and is an approach that affected operations at all levels.
The efforts were fruitful since statistics released in 2003 revealed that the airlines had produced a very outstanding record for those four years. Apart from showing an increase in the number of passengers by about 10.4%, there was also a great increase in revenue and a subsequent cut in losses. The three-year plan also had a projection on increasing the number of clients by about one million8.
Several marketing strategies contributed to a revival of fortunes such as Bahrain Grand Prix’s sponsorship, pricing that’s more competitive, improvements in network and service, and its subsidiary Gulf Traveler’s launch.
During the greatest global study with regard to how passengers perceive airlines, the Gulf Air became the winner of the awards for Skytrax Airline Excellence. This award was accorded to Gulf Air in recognition to the great changes that had been accomplished within a period of two years and the way in which it was now making a come back as champion within the Middle East.
The results achieved by the gulf air are greater than were anticipated with an excess in average loads. The sub-continent of India, Asia, and Saudi Arabia are among the main destinations served by the airline.
Emirates Airlines is one global Airline that grows rapidly. Its operations are based in Dubai. During its 2003/2004 financial year, the number of customers carried by emirates had increased by about two million. Both its profit and revenue had risen too.
Emirates 69 strong is one of the youngest in the sky with about 46 months on average. The plans of this Airline is to increase ensure that there is a rise in its fleet by 2012. During the Paris Air show, it had made its announcement and made an order for both a large Boeing aircraft and a number of Airbus.
The long haul 340-500 has its launch carrier as the Emirates Airlines. It was the first Airline to make an order for the double-decker in the year 2001 and the innovative A340-600 HGW will have it as its key launch carrier. Airbus super- jumbo has Emirates as its largest customer.
Additionally, the Airline has plans to increase the number of its Boeing 777s. Emirates Airlines operates in several cities and nations including Africa, North America, Europe, the Middle East and the subcontinent of India. However, it had begun extending its services to New York, Accra, Vienna, and Lagos, among other nations9.
During 2004, Emirates began a new ticketing system that was worldwide and electronic. This encouraged a travel that was coupon free thus resulting to a reduction in time required by customers to book and fly. By 2004, Emirates Airlines had received numerous awards for being the best Airline, which has obviously made many clients to identify with it.
Although the Emirates is encountering financial constraints to some level, it is less affected if compared to numerous other carriers. This can be attributed to the strength that its network has and its high diversification.
Although there is a decrease in the traffic of its passengers, which is apparently due to a decline in building activities in Dubai, it is possible for the airline to enlarge its operations given the tremendous connectivity network based at its hub, which is Dubai. Research reveals that through Dubai, many passengers from the United Kingdom can connect to cities in both Australia and India10.
Study shows that employees do not only play a significant part in improving their own productivity but also that of other vital assets like gates and aircraft and in ensuring that there is an improvement in customer service. Lessons drawn from several companies including Toyota that have used both employee engagement and ongoing improvement to embrace the principle of total quality management require a lot of attention.
So too do the approaches of companies in both the legal sector and International Airlines such as Emirates Airlines and Virgin Atlantic that are part of the full service airlines that are the youngest11.
Interaction process
There are two main ways through which customers get exposed to the activities of a firm. This is through the process of distinct communication and through the interaction process. What comprise the distinct communication process are the touch points between the firm and the customers, which entail aspects such as sales, advertising, and communication for direct response.
On the other hand, the interaction process is represented by the real world. The interaction process includes episodes such as interaction with aspects such as websites, goods, service processes, call centers, systems of payment and invoicing, procedures in service recovery and documentation with regard to use of goods among others12.
Activities within the distinct communication process are geared at granting promises with regard to the proposition of the firm’s value. On the other hand, the interaction process is supposed to fulfill given promises. Something is communicated and promises given through interaction between the firm and the customer. This might even include sales activities.
However, the key aim in the episodes of the interaction process is to ensure that customers have had access to value supporting solutions such as information, services, and goods. The three main aspects of the interaction process in the Emirates Airlines are customer integration, service production, and service recovery.
Service Production
The Middle East’s air transport industry is one of the industries that are facing the fastest expansion rate across the world. Studies reveal that during each year, both the passenger and cargo traffic continues to soar. Airlines at the local and regional level have projected spending colossus sums of money for several years in a bid to expand their fleets13.
The United Arab Emirates has recognized the significance of aviation as one of the best instruments through which it can connect to other parts of the world. Over the last hundreds of years, the UAE has been a great trading post in the Gulf, South Asia, and Africa.
The current UAE provides a business environment that is highly energized accompanied by both resources and infrastructure to ensure that the complete spectrum of the world’s business needs has been achieved.
In the previous years, systematic attempts have been made to ensure that the aviation sector’s infrastructure has been expanded as both Dubai and Abu Dhabi move towards a period where they both operate as the global airline hubs. A clear reflection of the UAE as a modern nation can be best seen if the projections made by Abu Dhabi and Dubai are implemented with regard to their airports.
The past few years have seen a great increase in cargo, passengers, and movements of aircraft. This represents the growth and change of the UAE into a major hub for both tourism and business. There have been reported cases of increases in passenger movement within the Dubai International Airport. This is expected to continue rising even in the coming years. A similar situation is also being experienced at the Emirates Airlines14.
Dubai’s remarkable economic development has been as a result of investment in the Emirates Airlines and the liberalization of the aviation policy. The main driver for this economy is tourism and services. The outcome of the liberal policy applied by Dubai since 1985 is the fact that numerous airlines flying to hundreds of destinations can be served by Dubai.
This has made Dubai to become a dreadful competitor at the global level. Another aspect is that Dubai has become Middle East’s tourism and business center. The air transport services of the airline are also reliable, competitive and of high frequency, making it to be part of the global networks for transportation and distribution based on just-in-time production15.
Use of the brand pyramid is one way of deriving the brand promise’s nature. The initial concern of managers when introducing a new brand is to locate gaps that have not been exploited in the market then taking advantage of their core competencies to come up with a brand that a novel technology supports or process, which results to products, that are unique.
However, the concern of consumers is not so much with the attributes but is more focused on the advantages that threes attributes brings out.
Through experience, customers begin to understand the brand more effectively and emotional rewards result from the benefits. For instance, a key benefit of Emirates Airline as an early enterprise was the installation of a television set before each seat of the economic class as a form of entertainment.
This results to fun during the flight, which is an emotional reward. If there has to be an appreciation to this emotional reward, then it should result to a value that is welcome by the clients. Thus, the emotional benefit of fun could result to appreciation of autonomy.
One of the main reasons as to why some passengers would chose to commute using one specific airline is because it will provide them with what they want to watch at a time that they want to view it.
Consumers will seldom take a long time to look for and interpret information about brands and thus each brand has personality brands associated with it. By promoting the brand through use of a personality who manifests the brand’s traits, inferences are drawn by consumers that the brand has some of the values that the personality promoting it has16.
Service Recovery
Whereas some airlines have been struggling to survive, Emirates airlines has been growing and performing excellently well in the recent past. Its target is not among the passengers who are price sensitive ant; thus, it does not intend to venture into low cost services.
Contrary to this, the approach is to feed the region with long-haul flights. Moreover, the company has no plans to get into airline collaborations except for code-share kind of alliances. This is because this will not only affect brand value, but will also put restrictions to the operations of the flight.
Moreover, when using alliances, airlines are favored instead of passengers. In comparison to airlines that are of low cost such as JetStar and EasyJet, the price of Emirates is high. However, its services are of high quality when compared to some of the best global airlines such as the British Airways.
Emirates Airline has an unbeatable competitive advantage in comparison to any other airline within the region. This is due to its strong network within the region and its world-class service17.
Flight operation encompasses various aspects such as the rotations and schedule of the aircraft, Schedule alteration and manipulation, scheduling and management of crew and the statistical analysis of flight. An airline’s flight operations management gives a solution that is integrated to monitor, plan and give response to events that lie within real time, give an analysis of traffic statistics, and lead to better performance in operation.
As the Emirates Airlines project to increase their fleet with at least 130, the amount of air traffic will really increase at the Dubai hub. In view of the day-to-day operation at the hub, the most important factor for the future success of the company is the seamless and dependable communication among all the relevant stakeholders.
The quality of airline service is dependent on their ability to take care of the planned schedule’s requirements. However, the ability to meet the demands of the schedule can be inhibited by several other factors such as adverse weather and conditions and the failure of one or many of the members of the crew from arriving on duty. In some cases, such as the situation of thunderstorms, only one airport may be affected for some hours18.
The advantages of cosmopolitan culture are enjoyed by Emirates Airlines with a large number of its employees coming from different nations. Since it operates in a service industry that meets the needs of consumers from around the globe, its cosmopolitan culture adds a lot of value to its services.
Culture is very crucial in the flight operation. The crew ought to have sufficient knowledge regarding the passengers’ culture and ought to make the services available to the delight of the customers.
For instance, prior to giving the customers liquor, the crew flying to Saudi should take caution. Also during the holy month of Muslims/Ramadan, the crew should not offer Muslim clients drinks and snacks since doing this may appear to lower the value of their flight service. Thus, when the interruption recovery exercise is being carried out, the right crew should be placed at the correct place.
Latest research reveals that the success of Emirates is more pronounced at an international level rather than at the regional level. There was an expression that the local community view Emirates as an International Airline rather than an industry that carries the national flag of the United Arab Emirates, which affected both their preference and perception with regard to the Emirates product.
Besides, with regard to the cultural elements and the customers’ preference, it was revealed that product of Emirates is not properly suit most Middle East routes.
The fleet of the Emirates Airlines invests a lot in the modern aircrafts present in the market. This helps it to keep its fleet young and modern. It has an order for one of the passenger aircrafts that are technologically advanced in the world (Airbus A380).
It is reported that A 380 will utilize fuel that is below 20% and fly quieter, affordable, and friendlier to the environment as compared to other aircrafts. To help it handle its disruptions and the normal operations, Emirates Airlines is installed with the latest information Technology systems19.
Analysis using ServQual and customer Reviews
The views of most customers who used Emirates Airlines are the service they received did not match their expectations. It is reported that the cabin crew did not accord them assistance in a number of areas such as serving them meals on time, they offered drinks after meals rather than before, did not bother ensuring that family members were seated together and were not interested in the affairs of passengers.
Apart from this, feedback from some clients who had used Emirates Airlines is an expression of the discomfort they encountered during their flight. The discomfort was caused by several aspects such as lack footrests and insufficient space between seats.
Besides, it is reported that the newspapers are no longer adequate for use by all the classes. Yet, other clients have complained about lateness of both the arrival and departure of flights. The common sentiments are that their level of service is declining compared to how it was ten years ago and that something ought to be done about it.
On the other hand, other customers have expressed satisfaction with services offered by the Emirates Airlines such as quality in-flight entertainment, welcoming crew and food after boarding the aircraft more than once.
Some of those who have used the business class have expressed their satisfaction with the services offered during their flights such as uncrowded lounges, food selections that were good, excellent flights and comfortable seats. Others applause the airline for providing plenty of reading materials during the flight, serving them meals quite on time and ensuring that flights were quick20.
Conclusion
The strategies employed by Emirates Airlines are quite broad. Relational drivers include installation of the free Wi-Fi access to the passengers, enlargement of its premises and services to increase passenger traffic and acquisition of more other quality and large capacity aircrafts.
On the other hand, interaction drivers that the company has employed are use of the RFID system to ensure safety of customer’s cases, investment in the aviation industry, installation of television sets in each of the economy customer’s seats, targeting the premium customers, embracing a cosmopolitan culture and use of technologically IT systems.
All these seem to go well apart for the fact that the UAE community views it as an international airline rather than a national one.
Most of the latest feedback from customers is that Emirates Airlines is not where it was about ten years ago in terms of the quality of service provided. Most of the customers complain about the carefree, selfish and unresponsive attitude of the crew, insufficient and low quality meals, discomfort and generally poor service.
A few of the clients applaud the airline for its punctuality and reasonable service. Generally, based on the views of most passengers, the Emirates Airlines ought to upgrade their service and either retain or replace their crew. This is the only way they will get back on track like it was a decade ago.
Bibliography
Al-Abed, I, P Vine, and P Hellyer. United Arab Emirates Yearbook 2005. London: Trident press. 2005.
Baker, J and S Hart. The marketing Book. Burlington: Butterworth Heinemann. 2007.
Bamber, G. Up in the Air: How Airlines can Improve Performance by Engaging their Employees. New York: Cornel University Press. 2009.
Bartneck, N, V Klaas and H Schoenherr. Optimizing Processes with RFID and Auto ID: Fundamentals, Problems and Solutions, Example Applications. Erlangen: Publicis Publishing. 2009.
Betz, F. Creating and managing a Technology economy. NJ: World Scientific Publishing. Emirates Airline Customer Reviews-Skytrax. 2011. Retrieved from https://www.airlinequality.com/airline-reviews/emirates/
HWM. The Wireless revolution: Experience New Ways of Living Wirelessly. Singapore: SPH magazines. 2004.
Lusch, R. and S Vargo. The service-dominant logic of marketing: dialog, debate, and directions. NY: M.E. Sharpe. 2006.
Mitra, S. The Caucasian Tiger: Sustaining Economic growth in Armenia. Washington DC: World Bank Publications. 2007.
Nargundkar, R. Services Marketing. New Delhi: Tata McGraw Hill. 2006.
Oxford Business Group. The Report: Dubai. Oxford: Oxford Business Group. 2007.
Taneja, N K. Looking beyond the runway: airlines innovating with best practices while facing realities. Burlington: Ashgate Publishing Company. 2010.
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Footnotes
1 HWM. The Wireless revolution: Experience New Ways of Living Wirelessly. Singapore: SPH magazines.2004. p. 63
2 Oxford Business Group. The Report: Dubai. 2007. p. 117.
3 Oxford Business Group. The Report: Dubai. 2007. p. 117.
4 Nargundkar, R. Services Marketing 2E. New Delhi: Tata McGraw Hill. 2006. P. 412
5 Nargundkar, R. 2006. P. 412
6 Nargundkar, R. 2006. P. 412
7 Nargundkar, R. 2006. P. 412
8 Al-Abed, I., Vine, P. and Hellyer, P. United Arab Emirates Yearbook 2005. London: Trident press. 2005. P. 207–208
9 Al-Abed, I., Vine, P. and Hellyer, P. 2005. P. 209-210
10 Taneja, N.K. Looking beyond the runway: airlines innovating with best practices while facing realities. Burlington: Ashgate Publishing Company. 2010. P. 10
11 Bamber, G. Up in the Air: How Airlines can Improve Performance by Engaging their Employees. New York: Cornel University Press. 2009. P. 185
12 Lusch, R. and Vargo, S. The service-dominant logic of marketing: dialog, debate, and directions. NY: M.E. Sharpe. 2006. P. 356
13
14 USA International Business Publications. Doing Business and Investing in United Arab Emirates Guide. Washington DC: International Business Publications. 2007. P. 70s
15 Mitra, S. The Caucasian Tiger: Sustaining Economic growth in Armenia. Washington DC: World Bank Publications. 2007. P. 111
16 Baker, J. and Hart, S. The marketing Book. Burlington: Butterworth Heinemann. 2007
17 Betz, F. Creating and managing a Technology economy. NJ: World Scientific Publishing. 2010. P. 286
18 Betz, F. 2010. P. 286
19 Betz, F. 2010. P. 299
20 Emirates Airline Customer Reviews-Skytrax. 2011. P. 1-3