Every company starts either with a small idea or to fill an existing demand gap. The closure of Gulf Air created the gap and Emirates Airline was born. Their competitive advantage was their low cost structure. They had innovative ideas for reducing the cost structure and used latest technologies. The quality of service was good with youngest fleet as compared to other existing airlines. The management was efficient and did not follow any orthodox model of unnecessary hierarchies and board of directors. The management was small and quick in taking decisions. The employees were treated as a family rather than normal worker. Overall, they had all the building blocks of good quality, innovative, customer responsiveness and were efficient. These building blocks help them maintain their low cost structure.
As the company grows, it becomes hard for the company to maintain their competitive advantages and sustain their low unit cost. Several small pieces add together to form the building blocks of any organization which is termed as work culture and which are the basis of any organizations unit cost. In Southwest airlines, even the Pilot help passengers while boarding the plane. These qualities are not built overnight and do not abide to any process which can be copied. It’s an ongoing culture and trust among the employees and is practiced right from top to the bottom of the hierarchy in an organization. As in the case of Emirates Airline, the employees were treated as a family and never had the orthodox fundamentals of management where subordinates are macro managed and yelled by their incompetent boss. They cultivated the culture as the company grew and maintained a family like environment which helped them sustains their low cost.
The quality of service has the same problem as the company grows. It degrades with time as their fleet grows old and crew members loose their charm. It’s not easy for Airline industry to either buy new planes or recruit new crew members regularly. After sometime, crew members treat their job as any other regular jobs and are not very enthusiastic to customer’s need. Emirates Airlines took help from other big airlines and implemented the customer service trainings. Maintaining quality of service for any industry is tough and needs attentions from the management and that’s what Emirates Airline’s management did. Ever with an aggressive expansion plan, they never let their quality of service to degrade and were able to sustain it.
Emirates Airline had the latest technologies and was among the front player to adopt new technologies and implement them. Implementing new technology is not easy as it requires manpower and is expensive. But it pays off if implemented effectively. Mostly in Airline industry, these systems are implemented once and are not touched unless there is an utmost need to change or if the existing system breaks.
Their management was very efficient and had the ability to take quick decisions, as they were few in number and was very informal. They neither had nor tried to copy the management hierarchies from other big companies. As the companies grows, the management size also grows and brings in all the complexities of hierarchies and processes of approval before it even reaches the board of directors of shareholders for final approvals. Some ideas are shot down at a very low level and never reach to the top.
Overall, Emirates Airline shows that it has the ability to sustain all the building blocks of their competitive advantages. If they are able to do it, then they will progress in future and would be able to sustain any downturn in the industry like 9/11.
