Emirates rule the Sky!
Being in the aviation industry has to one of the hardest industries to be in. Few airlines ever make a profit yet one airlines seems to make a profit every year, Emirates. Why is Emirates so successful and what is their strategy?
If you consider the world in terms of the aviation industry you will realise that there are major hubs spread over the world to make it easier to connect to smaller destinations. For example (starting west going east): LAX, JFK, London Heathrow, Dubai, Singapore, Hong Kong, Sydney.
If you consider the european market you quickly realise that there is only one major hub, London Heathrow. This was fine for many years until Heathrow could no longer handle any more flights and with the refused proposal to construct a third runway it can't ever get any bigger.
Emirates and the UAE picked up on this many years ago. So they made Dubai a tourist destination but then also created an airline to connect the world and become the biggest hub in the central earth.
Emirates have a very clear strategy and that is to connect the world to Dubai. So basically they want to make travel as simple as two flights to anywhere in the world, with a short stay in Dubai. A very clear strategy and one they are doing extremely well at.
If you consider the South African market which offers 3 major airlines to connect to major hubs.
South African Airways will always be considered because their hub in South Africa and can therefor connect to most destinations.
British Airways is next. BA have a fairly good share with connections to London Heathrow which has been very successful but with no room for grow they have nothing more to offer. The also have the benefit of operating two local airlines in South Africa.
Virgin Atlantic are another major contender but far from gaining significant share unless an increase in connecting flight or joining an alliance. The benefit VA has it that their hub in Gatwick which has great room for expansion.
Now down to Emirates. Emirates made a big move that the beginning of 2011 which will see them gain significant market share in South Africa. Emirates joined Discovery Vitality which gives members a 25% discount on flights. Previously British Airways were the only international airline to offer this service. The great benefit for Emirates is that their prices are significantly lower than British Airways.
Emirates have a great advantage in that they are the only airline to operate international flights from all three major airports in South Africa, something not even South African Airways does.
Could we possible see Emirates control the aviation industry? Could we see them buy other airlines?
We have no idea but what we can be sure of is that they will keep expanding as they still have 80 A380 on order!