Summary
The paper is devoted to analyzing Emirates Airlines and the effectiveness of its management during the Covid 19 pandemic. The company’s major approaches to leading change, creating specific organizational culture, and supporting employees are researched. Using the SWOT analysis tool and relevant leadership, innovation, and organizational change theories, the company’s response to the reduction of flights is investigated. It is concluded that Emirates selected an effective strategy to support the company during hard times, promote innovations, and support employees. It contributed to the preservation of the high level of effectiveness and the corporation’s ability to evolve.
Introduction
The company selected for the analysis and report is Emirates Airlines. The Emirates Group comprises several divisions, such as Dnata airport services, sky cargo services, emirates holidays, and Dnata travel services, and is a luxurious commercial airline carrier. The Dubai National Air Transport Association (DNATA) was formed in Dubai, United Arab Emirates, in 1959. It provided support services to the Dubai International Airport and served as a sales agent for 26 airlines worldwide. In the early 1980s, Gulf Air began cutting back its services to Dubai (The Emirates Group – company profile, n.d.). It created the basis for the rise of a new brand.
In 1984 Sheikh Mohammed Bin Rashid Al Maktoum and Sir Maurice Flanagan first met to discuss the launching of this new airline in Dubai. Sir Flanagan was appointed to assist with the setup of the airline and was given a budget of $10 million (About us, 2022). The airline found its business model and was only left to decide upon a name. Sheikh Mohammed was given a choice of a few select names and settled on the name Emirates as it represented his country, and so the history of Emirates Airlines commenced the following year in 1985. Following the airline’s lunch, it was required to function without state subsidies from the government. With the appointed Chairman, Sheikh Ahamed, and Sir Flanagan as the CEO, the airline’s journey began (Howells, 2017). Today, it is one of the most luxurious brands globally.
Emirates Airlines proliferated and increased its business ventures. It formed a joint partnership with United Airlines in 1993. Furthermore, in 1997, the airline’s new training and maintenance centres were opened. Later in 1998, Emirates Airlines bought out a 40 percent stake in Air Lanka. Emirates Airlines is a state-owned company with over 6,500 employees and a total sales record of 5.50 billion AED ($1.52 billion) as of 2000, in 2020 revenue and operating income comprised 91,972 million (The Emirates Group – company profile, n.d.; see Appendix). Emirates Airlines carried 56 million passengers in 2019-2020; they fly to 56 destinations, possess a fleet size of 270 aircraft, have a total of 45,040 employees, 172 nationalities, and pride themselves ahead in being a dynamic, diverse workplace (About us, 2022). Emirates Airlines received a certified rating as a 4-star airline by Skytrax ratings in 2022 for its onboard products, quality, service, amenities, food and beverages, entertainment system, cleanliness, and staff, including; both cabin crew and ground staff (Skytrax, n.d.). It was reported in the fiscal year of 2020/2021 that Emirates Airline Group had moved over 6 million passengers. There was an obvious decrease from 56 million compared to the previous year due to the pandemic COVID-19 (Statista (2022). In such a way, today, the corporation faces severe challenges. Their effective management is key to the successful transition to another developmental stage and Emirates’ ability to compete with the closest rivals.
Emirates’ Analysis
SWOT
An improved understanding of the company’s current position and its opportunities can be acquired by performing the swot analysis:
Strengths
- Strong backing (Dubai Government)
The company is supported by the government of Dubai, which makes it more powerful and secure (The Emirates Group, 2020)
- Excellent customer service
Clients are provided with high-quality and first-class services, leading to increased satisfaction (The Emirates Group, 2020)
- Loyal clients
The number of loyal clients continues to grow
- Brand value
In 2020 it comprised about $6.3 billion
- Destinations
Emirates flies to 6 continents
Weaknesses
- High cost
Maintaining the current position requires significant investment from the company (The Emirates Group, 2020)
- High competition level
The industry is characterised by fierce rivalry and competition (The Emirates Group, 2020)
- Narrow target audience
The company mainly focuses on business and first-class clients
- Dependence on international flights
Most income comes from the international flights
Opportunities
- New fleet
Acquiring new and modern aircraft, the company can improve its position (The Emirates Group, 2020)
- Destinations
Opening new routes will help Emirates to support its leading position globally
- Cooperation
The company might ally with other carriers to coordinate efforts
Threats
- Competition
The constantly growing rivalry is a serious threat to the company
- Pandemic
Pandemic resulted in the decrease in revenues and passengers
- Growing fuel cost
The cost of fuel continues to grow, which threats airlines
- Policies
Emirates has to adapt to new policies and governmental regulations
Altogether, the given analysis shows that the company has strong positions at the international level, though it has some threats that should be considered by the management.
Organisational Culture
Another factor explaining Emirate’s success and its continuous growth is the organisational culture of the company. It is closely linked to the clearly defined vision and mission:
“Maintain international recognition as one of the leading aviation and security services businesses in the world, and set a benchmark within the industry.” (Vision, mission & values, 2022, para. 1)
“Commit to safeguarding all customers, staff, and assets against acts of unlawful interference through continuous reviews, training, and education. Implement internationally established industry standards and practices to ensure a safe and secure environment while facilitating business growth.” (Vision, mission & values, 2022, para. 2.)
These two statements are supported by the core values emphasised by Emirates, such as excellence, agility, innovation, leadership, and reliability (Vision, mission & values, 2022). Following these basic ideas, the company established a culture of innovation and a pioneering spirit linked to the achievement idea shared across all departments (Vision, mission & values, 2022). It means that employees feel their belonging to the company focused on implementing innovative solutions and creating the basis for continuous improvement via excellence and performance enhancement. It also implies the personal and professional growth of all employees necessary for attaining existing goals and successful, positive change.
Sense-Making Process and Resilience-Building
The outlined organisational culture also helps to cultivate resilience among employees and increase the effectiveness of sense-making processes. It becomes critical at pandemic times when specialists experience a high level of stress. Thus, the culture of innovation and goal achievement provides workers with the feeling of belongingness to a company ready to face new challenges (Driskill, 2018). Emirates also focuses on making sense by combining high salaries with intrinsic motivation (The Emirates Group, 2020). It means that individuals are provided with the opportunity for self-actualization and realisation of their ambitions, which is vital for high motivation levels and increased resilience (The Emirates Group, 2020). As a result, employees see sense in following the existing code of behaviour and rules to achieve specific goals. During the COVID 19 pandemic, it becomes one of the critical factors helping the brand to survive and continue its evolution. The corporation emphasises that education and protection are its core responsibilities, meaning the employees might feel safe even during difficult times and expect support and positive change.
Innovation, Change, and Company’s Culture
Emirates Airline prides itself in being ahead of the pack and constantly thinking of new innovative ways to be ahead of their competitors regarding services and products they offer to customers. In 2018 the airline was proudly awarded the Middle East Corporate Innovator, by Global Finance, for its inflight products, including its modern style cabin concept designed in a way for customers to enjoy the best inflight experience and exceptional customer experience, which the airline is renowned for (Emirates sets the bar high, 2018). This award is given to companies in recognition of their embracement and encouragement in promoting a culture of innovative excellence and the highest levels of standards, and they are seen as leaders in the industry (Emirates sets the bar high, 2018). It became a result of the brand’s efforts to create a unique vision and culture.
Emirates Airlines have set out strategies and innovative policies to become one of the leaders in global aviation. The airline embraces and encourages modern technologies and uses new ideas to support its Services Improvement Strategy (SIS) (Nataraja and Al-Aali,2011). Technological change is used by Emirates Airlines in order to assist the transformation of its services. Adopting these practices has simplified the way for the airline to satisfy the needs of their customers. In such a way, the focus on innovation and change as part of the company’s culture became a critical element guaranteeing the company’s survival and its ability to overcome the crisis. Appling the Doblin model, it is possible to acquire a better understanding of the Emirate’s innovativeness:
It is possible to state that Emirates focuses on all aspects of the innovation wheel. It uses the most innovative technologies and methods to increase customer engagement and create an effective profit model (The Emirates Group, 2021). Moreover, the brand name, developed infrastructure, and outstanding product performance create the basis for further enhancement (The Emirates Group, 2021). The brand also focuses on innovating its offering and product system to meet the growing demands of top-class clients (The Emirates Group, 2021). Under these conditions, the Doblin model of innovation helps to characterise Emirates as a highly creative brand.
Covid 19 and Company’s Response
The Covid-19 pandemic has dramatically impacted the aviation industry and all airlines. It is reported that Emirates Airlines had not declared a profit for the first time in three decades due to the pandemic (Business Today.In, 2021). According to the official report, revenue decreased by 8.4 billion, while the overall total passenger and air cargo capacity also declined by 58% over the past year (Business Today.In, 2021). For the first time in its history, the airline had to ground all passenger flights for eight weeks as per official recommendations to slow down the speed of the virus’ spread (Business Today.In, 2021). These dramatic changes and the decrease in income became a severe challenge for Emirates and introduced the need for effective management decisions and change. The Emirates acquired several critical objectives, such as saving the workforce, ensuring its high preparedness levels, and avoiding critical changes in the organisational culture to leave space for future progress.
Leadership
In Analysing Covid-19’s impact on the corporation, it is also vital to admit its response to the challenge, its approaches to change management, and the leadership models selected to address the problem. Thus, Adel Al Redha, Chief Operating Officer of Emirates Airline, outlined a new course to solve the problem. It rested on the idea of employees’ unity and readiness to overcome hard times together (Emirates response to COVID-19, n.d.). It means that the company’s CEOs appeal to the organisational culture and motivation of workers. Applying the theory X&Y by McGregor, it is possible to explain the leaders’ focus on positive aspects.
Thus, following the framework, leaders who are optimistic about their people use a participative management style, encouraging collaboration, trust, and improved relations (Desta, 2015). In such a way, Emirates believes in the ability to overcome the crisis together and count on their specialists’ support.
Furthermore, the measures offered by the company’s leadership to manage a crisis outline several significant steps. These include freezing of all non-essential recruitment and consultancy work, cost-saving initiatives when working with suppliers, encouraging employees to take a paid or unpaid leave, reduction of basic salaries (Valerie, 2020). Moreover, Emirate’s President agreed to cut his salary by 100% for three months as a critical measure (Valerie, 2020). From an ethical perspective, this step is critical to show leaders’ concerns and their readiness to move with the company and reduce their own salaries, which is also essential for motivating specialists (Deszca, Inglos and Cawsey, 2019). At the same time, from the behavioural theory perspective, the given response to the external threat can also be viewed as a practical measure as it helps to encourage others and make them follow CEOs’ examples (Deszca, Inglos and Cawsey, 2019). The necessity to reduce salaries is a measure that emerged because of a critical reduction in revenue; however, the top management emphasises the timely character of this decision and the focus on saving employees and their positions (The Emirates Group, 2021). It is also an important part of the strategy helping the Emirates to overcome the crisis.
Analysing the situation in the corporation and its response, it is possible to emphasise effective leadership as the critical component of crisis management. Thus, it included effective and able governance, integrated utilisation of existing partnerships, and overall workforce excellence peculiar to the company (Abbas Zaher et al., 2021). The employment and integration of these aspects is possible only regarding effective leadership models. As it comes from the McGregor theory, the company holds an optimistic view of its employees. At the same time, the existing leadership studies help to determine Emirate’s leadership style as democratic and transformational (Gary, 2019). Top managers and CEOs focus on inspiring subordinates and promoting the desired behaviour and thinking (The Emirates Group, 2021). At the same time, the transformational approach implies integrating innovations and cultivating creativity as the primary tools to generate a competitive advantage and attain existing goals (Gary, 2019). Under these conditions, the crisis management style selected by Emirates Airlines during the pandemic can be viewed as an effective one as it provides individuals with the needed support and ensures they feel protected and ready to continue cooperation with the corporation.
Lewin’s Change Model
Responding to the pandemic and radical alteration in the civil aviation sphere related to it, Emirates Airlines had to initiate the change process to reorganise the work of the corporation and ensure it could function in new conditions. Thus, the management viewed the necessity to reconsider the existing approaches, introduce new practices, and make them a part of the plan (Valerie, 2020). Under these conditions, Emirates introduced a completely new strategy, focusing on preserving a high level of innovativeness, increasing resilience among staff, and guaranteeing the preservation of working places as a result of crisis management (Valerie, 2020). The given approach can be analysed from Lewin’s change model perspective:
It means that having realised the necessity of change, the company determined the current needs and goals and why the change is necessary. During the next phase, the resources were devoted to promoting change, communicating its goals and discussing it with employees, and integrating new models into the company’s work. Finally, during the refreeze stage, Emirates ensured leadership support to the proposed alterations and established a feedback system to trace all alterations in effectiveness, people’s moods, or task performance (Valerie, 2020). In such a way, Emirates’ effectiveness in overcoming the crisis can be explained by the adherence to the effective change model.
Iceberg Model
The company’s response to the pandemic was also characterised by emphasising the critical importance of human resources. Emirates’ leaders view specialists as their most valuable asset as they contribute to the growing quality of provided services (The Emirates Group, 2021). Moreover, the company has always invested in the training and professional development of its workers (The Emirates Group, 2021). For this reason, the preservation of their qualifications and avoiding critical reduction in their number became the central goal of a crisis management program (The Emirates Group, 2021). Thus, the given purpose can be explained using the Iceberg model:
From this perspective, the pandemic is only the tip of the iceberg or the visible issue that should be resolved. However, it leads to a crucial reduction in the workforce, meaning that it is fundamental to support employees by providing them with resources to overcome challenges introduced by the crisis. It will help to address the problem most effectively and avoid long term negative consequences.
Innovations
At the same time, Emirates does not step away from using innovations and relying on creative solutions. Thus, one of the central Covid 19 responses initiated by the company was the preservation of the focus on technologies and their usage and further integration (International Airport Review, 2021). The reduction in the number of flights because of the restrictive measures introduced the necessity to preserve clients (The Emirates Group, 2021). Under these conditions, technologies employed by the corporation play a central role in saving links with the loyal audience and informing them about the current conditions and plans (The Emirates Group, 2021). Emirates views its communication technologies as the primary tool to coordinate its employees during the pandemic times and also improve customer service.
Moreover, already existing technologies are viewed as part of everyday tasks, while it is planned to integrate new ones to boost effectiveness. It can be explained regarding the innovation diffusion theory, as once unusual solutions became the working routine, which helped Emirates to generate a competitive advantage (Diffusion of innovation theory, 2019). At the same time, there is a focus on new projects, such as a pilot robot using unique technology to eliminate viruses and create a healthier environment (International Airport Review, 2021). It can be viewed as an effective response to the pandemic as the technology will help to stop the virus’ spread and ensure clients will prefer using Emirates’ services, which is critical for the future rise.
Finally, Emirates Airlines focuses on creating new bonds with potential partners. It can be viewed as an example of a practical leadership approach during turbulent times. New business relationships will help to support the company and create a pool of resources to survive and increase effectiveness. For instance, a partnership with UAE’s Aviation X-lab leads to the emergence of a new source of innovation (International Airport Review, 2021). It is also aligned with the existing corporate culture of innovation and change, which helps to increase the speed of technology integration.
In such a way, Emirates correctly realised the scope of the challenge that emerged because of the Covid 19 pandemic. For this reason, it promotes positive change within the company, focusing on reducing spending, preserving the existing workforce, and further integrating innovations as the central tool to boost performance. Applying the leadership and organisational change theories, it is possible to admit the increased effectiveness of these measures and their contribution to generating a pool of resources that can be used to address the most problematic issues.
Discussion and Conclusion
Altogether, Emirates Airlines is one of the world’s leaders in civil aviation. The company possesses resources and a client base helping it to compete with the main rivals and attract new loyal clients. However, the pandemic became a severe challenge for the corporation because of the reduction of flights and decline in revenues. For this reason, it initiated a significant change process focusing on several major areas. First, the reduction of spending as the major tool to struggle with the adverse effects was planned. Second, Emirates proclaimed its focus on saving the workforce as it is viewed as the most valuable company asset. Finally, the corporation emphasised its adherence to using innovations and the newest technologies to achieve current goals.
The effectiveness of the selected strategy can be explained by several factors. First, the change process was managed regarding the models of change, such as Lewin’s framework. The correct realisation of the leading sponsor of change and its necessity influenced its CEOs and their readiness to introduce radical alterations. Second, the correct understanding of all factors influencing the company at the moment also contributed to selecting the most effective models and methods helping to achieve existing goals.
Another critical success factor is the reliance on innovations and their integration into the company’s work. Thus, the sources of innovation are linked to the practical models helping the company to attain current goals and reconsider outdated technologies. Emirates remains one of the most creative carriers, and its crisis plans emphasise the necessity to continue using innovative practices (The Emirates Group, 2021). This approach ensures the company can reduce spending and preserve a high level of performance and effectiveness. At the same time, the effectiveness of the selected course is proven by the stable income Emirates managed to acquire regardless of the pandemic and numerous restrictions (The Emirates Group, 2021, see Appendix). It means the company uses the most relevant practices and strategies.
Information from the analysis can also help to introduce some recommendations. First of all, the pandemic also affected passengers and their paying capacity. It means that the company might focus on offering specific flights for passengers who have limited finances at the moment. It will help to improve the company’s image and ensure it acquires a new source of income. Second, the company might focus on improving its social media presence as it becomes a potent tool for interacting with clients and increasing their loyalty. The given recommendations might promote the future company’s growth and empowerment.
Altogether, the analysis shows that Emirates Airlines successfully struggles with the aftermath of the pandemic. The strategy selected by the company helps to overcome most of the negative influences and address the most critical aspects. Relying on innovation and its corporate culture, the firm promotes positive change aimed at reducing spending and saving its workforce. It also helps to create the pool of resources needed for the recovery and achieving new goals in the post-Covid-19 era. The effectiveness of these measures helps Emirates to remain competitive and evolve.
Reference List
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Appendix
Financial statements
Part 1: (The Emirates Group, 2021)
Part 2: (The Emirates Group, 2021)
