Operating in 55 countries and to 77 destinations, Emirates airlines is one of the major airliners in the world at present. It has started its operations from Dubai in 1985 and currently serving in almost every major destinations of the world. It has won the best airliner award many times because of the excellent services it offers to the customers. But still it is facing stiff challenges at present due to the recession. This paper briefly analyses the economic environment of airline industry in general and emirates airlines in particular.
Financial experts believe that Emirates airlines future could be determined by Dubais sister emirate, Abu Dhabi government (Milmo et al). Currently Dubai is undergoing a severe financial crisis and the reports from Dubai shows that one of the biggest organizations in Dubai, “Dubai world” is on the verge of destruction because of financial crisis. Dubai government is waiting for Abu Dhabi’s help in sort out the economic problems. “Emirates is owned by the Investment Corporation of Dubai, which is in turn controlled by the Dubai government” (Milmo et al). The current financial crisis of the Dubai government may force the government to think in terms of a merger between Emirates and the Abu Dhabi counterpart Al-Itihad.
The increased focus on diversification by neglecting other areas of business has created a strategic failure in the Emirates’ airline business. Emirates blindly went after acquisition strategies to extend the wings by overlooking other areas like the service sector. Stakeholders and their interests were overlooked by the company when they concentrated more on other aspects of the operations. The customer service standards have been adversely affected and the reputation of the airline has been affected badly in the last few years.
The bargaining power of the sellers is low at present especially because of the current global recession. At the same time increased