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Who is the best ?

Who is the best ?. Which airline had : Double digit growth for the last 19 years ? Best operating margin ratio in 2003 ? One of the highest load factor in 2003 ?. GROUP 12 Section C Chang Jack Dimoka Maria Guibourg é Matthieu Oda Hiroo

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Who is the best ?

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  1. Who is the best ? Which airline had : • Double digit growth for the last 19 years ? • Best operating margin ratio in 2003 ? • One of the highest load factor in 2003 ?

  2. GROUP 12 Section C Chang Jack Dimoka Maria Guibourgé Matthieu Oda Hiroo Zhang Steven

  3. World Air Carrier Profit/Loss World Passenger Demand 20 10 15 10 5 Annual Percent Growth 5 billions of US dollars 0 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 0 -5 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 -10 -15 -5 Operating profit Net profit Passengers RPKs Introduction • What happened to the aviation industry?

  4. Change InIndustrial Environment • How airlines companies reacted to the tough situation? • Trends & Strategies • Smaller and faster airlines • Globally strategic alliance • Dark Horse

  5. Total Revenue Profit Margin 14 15 10 billion euro 10 6 5 Percentage 2 0 0 -5 2001 2003 2001 2003 Benchmarking (1) • Emirates Airlines vs other front runners • Emirates outperformed others by high profit margin

  6. Revenue / Employee Passenger Load Factor 250 77 200 75 150 100 50 0 70 Benchmarking (2) • Emirates operates outstandingly (cost efficiently) • Emirates outperformed others • by passenger load factor FY2003 DATA

  7. The Company

  8. Emirates Airlines • Head Offices located in Dubai • Started in 1985 • It owns 50 aircrafts • No of Employees = 10,500 • Ranked 5th in the industry (Net Profit)

  9. Integral Operations Emirates Group Emirates Airlines DNATA Airline Operations Airport Operations

  10. Top Management Structure Chairman Group Managing Director 2 Chief Directors Chairman Chairman Group Managing Director Group Managing Director Chief Director

  11. Business Model of Major Airlines Main Hub • Regional Hubs • Main Routes • Making Profits • Long-haul Aircrafts • Branch Routes • Competition from Low-Budget Airlines • Short-haul Aircrafts

  12. Business Model of Emirates Airlines Code-Sharing Main Hub (Dubai) • No Regional Hubs • Main Routes • Making Profits • Long-haul Aircrafts • No Branch Routes • Making Code-Sharing Agreement 5,000-6,000km No Need For Refuel outside Dubai

  13. Business Model of Emirates Airlines

  14. Characteristics of the Emirates Model • 1. Homogeneous Aircrafts (Long-haul Only) • More flexibility in Flight scheduling, Crew scheduling • Scale merit of Purchasing, Leasing and Maintenance • 2. Direct Flights • Less Downtime (High Utilization of the resources) • Reduce landing and Parking Cost • 3. Standardized Flight Schedule • Simple Operation with Less Flaws

  15. International Culture with Arabic Symbol • Top Management from UK and Ireland • Employees from more than 100 countries His Highness Sheikh Mohammad :The “Picture Face”

  16. The SWOT

  17. Dubai Hub • Financial Results • Marketing Strategy • Fleet SWOT-Strengths

  18. Fleet Average Age month 160 120 Whole Industry Emirates: B777-200/300; A330-200;A340-300/500 80 40 0 Lufthansa: 17 types including 737-300, CRJ 100/200… Advanced Fleets

  19. SWOT-Weaknesses • Not Established Brand Name • Small Independent Airlines Network

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