Sample Business Case Studies Paper on Innovation Assessment of Emirates Airline

Innovation Assessment of Emirates Airline

An overview of Emirates Airline

Emirates Airline is a United Arab Emirates airline Company that was founded in 1985. It is ranked among the top airlines globally, and it is among the top three carriers performing well in business in the Persian Gulf.  Its main business activity entails the provision of commercialized air travel services. Currently, Emirates airline follows an expansive route that spreads across a network of one hundred and forty cities with a fleet of two hundred and sixty-seven aircrafts. This fleet is on an order that is worth one hundred and twenty-eight dollars, and managed to carry 50 million passengers in the year 2014 (Emirates 2015).

Introduction

The adoption of strategic innovations in the airline management of human resources, business processes, and its other resources has played a major role in the success of the airline. First, it has managed to carry out an aggressive fleet expansion over the years. By 2010, Emirates had ordered 201 wide-body aircrafts that included forty-eight B777s, seventy-six A380s, and seventy A350s. Moreover, the airline has embraced advanced technologies to enhance its aircrafts amenities. These entail inflight extravaganzas, such as private suites, staffed lounge bar, and mid-flight showers on its A380 flagships (Monteiro & Sull 2010).  It has also employed other innovations to capture the middle-class customers from emerging economies. Emirates innovations are facilitated through various mediums that assist in developing, introducing, and implementing them. This report finds out what Emirates Airline is doing properly to support innovations, what they are not doing, and recommendations are provided to offer solutions. The assessment of innovation in Emirates Airline is done using the Innovation Management Maturity Model (IMMM). The model assists on assessing and visually representing the organization’s current levels of maturity in the categories of people, process, and tools. The report classifies the assessments into those areas that Emirates is doing well and the areas it is not doing well. The methodology of determining whether the airline is doing well or not is also included in the assessment.

People

Areas Emirates Airline is doing well

In this category, one of the areas the airline does well in supporting innovations is the cultivation of a corporate culture of innovation and a pioneering spirit at all levels of the organizational. This culture encourages the entire group of staffs to take calculated risks without being afraid and offer ideas ensuring that an innovative attitude is developed among all employees. The departmental managers, as well as all persons holding leadership posts within the organization, are tasked with the responsibility of maintaining a culture that supports innovation (Sarsfield 2014). The subdivision of the corporate culture impact on the airline’s innovations as high, medium or low is used to measure the level of maturity in this area. Corporate culture has a high impact on most of the innovations exist in the organization; this is because of the top leaders altitude towards innovations that influences all staffs to be innovative. The second area is the hiring process whereby a review of this process indicates that candidates are selected effectively to occupy strategic posts in the organization that supports research and development. Moreover, there are also job posts that are specifically aligned with the company’s objective to be innovative. For instance, Emirates organizational structure has a department that requires an innovation lab manager. An examination of advertisements for this post shows that its job description entails planning, development, and management of the entire innovation lab. This includes establishing relationships with technology experts, such as Microsoft as well as other business organizations (Sarsfield 2014). It further involves the management and facilitation of innovation ideas and processes, alignment of innovation concepts, and emerging technologies with owners of businesses (Monteiro & Sull 2010).

The human resource department lists a wide range of qualifications required for such posts. These qualifications help in attracting the best talents that will spearhead innovation efforts in the company. Such qualifications include possession of adequate knowledge in extensive, innovative practices and having a background in innovation. Moreover, potential candidates need to have an experience that spans for about eight plus years in information technology fields and be experienced in the management of large-scale innovation department (Sarsfield 2014). To measure how the airline is doing well in the hiring process, this report reviewed the qualifications of those holding key positions that support innovations and the advertisement vacancies in these posts. This review indicated a high correlation of these factors to the present and planned innovations. The inclusion of a wide range of nationalities in its cabin crew that are from more than 130 countries is an innovative way to target airline passengers from diverse cultural backgrounds and tastes. The airline is also able to schedule a cabin crew on each flight who can speak various languages such as Arabic, English and the language of the flights destination (Sarsfield 2014). The increase in the number of passengers from various countries and diverse cultures the tool used for measuring the airline success in this area. These efforts together with the top leadership commitment towards maintaining a culture of innovation among the employees increase the maturity level of innovation through people.

Areas Emirates Airline is not doing well

Lack of a proper recruitment policy is one key area in the category of people that the airline has failed to rectify in order to support innovations.  Media reports from former employees interviews indicate that most of the staff in the airline are not treated fairly especially the employees that do not have managerial positions. This implies that employees are not offered good terms and conditions that motivate them in their duties. The poor recruitment policy is reflected by various factors such as failure to retain staff and failure to communicate honestly with the staff. Others are the lack of salaries that are competitive, failure to offer benefits and to recruit externally such that existing staffs are not promoted easily. Such a poor policy will negatively affect its innovation efforts through people because they are not happy to provide their ideas or implement the introduced innovations.

Thus, using the IMMM model, Emirates Airline innovation assessment in people’s category indicates it is at the third maturity level. This is because although it has put great efforts in corporate culture and the hiring process, it does not have a recruitment policy that is proper in entirety.

Processes

Areas Emirates Airline is doing well

Emirates Airline has come up with a wide range of programs and processes that support innovations. Firstly, it is doing well with an environmental sustainability programs that help in improving fuel efficiency. Such programs that help in achieving a sustainable future introduce an innovative way for the company to remain active in corporate social responsibility. Measures to reduce emissions from the ground operations have been established through the reduction of diesel and petrol that were previously consumed by more than 4,400 vehicles used as trucks, staff buses or tow tractors. A Trial of baggage tractors and optimization program for crew transport has been introduced to enhance efficiency in the ground transport. The opening of a metro station and introduction of a project that gives priority for car sharers to be the first to access parking is an innovative way to improve environmental sustainability (Monteiro & Sull 2010). Optimization of the current use of airspace has been possible through the airline’s efforts. Emirates has worked with national aviation authorities and international bodies in  reducing flight times and save costs of fuel as well as fuel burns reducing emissions. One such effort is the agreement to allow flying over the North Pole that was made with the Russian Government. It saves about twenty minutes on a Los Angeles or Dubai-San Francisco flight. All these initiatives innovatively promote Emirate’s corporate social responsibility, safeguard the environment and enhance the airline public image (Mouawad 2015). The amount of fuel saved through the programs both on aircrafts and the vehicles used in ground operations assist in measuring their success in innovation. Besides, the reduction of carbon emissions and awards given to the airline for introducing environmental sustainability programs measures the success of the programs in innovation.

Secondly, Emirates is doing well in using a marketing process that relies on the social media platforms for customer engagement. Social media create an innovative channel of protecting the reputation of the airline, strengthening of existing relationships and encouragement of people to become Emirates fans. Thus, social media is used to market and promote the airline as a global lifestyle brand. For example, “Hello Tomorrow” is a designed brand campaign that is meant to inspire people globally. The message is that Emirates has an unlimited potential in the future. It provides a chance to consumers to present ideas to the airline such that an open line of communication is created innovatively. This way the airline understands their customers’ hopes, aspirations, and dreams that assist in meeting consumers’ demands and continue empowering their brand (Nataraja & Al-Aali 2011). The success of social media platforms is measured by the amount of positive feedback the airline receives from the engagements. It is also measured though the increased queries that the airline receives and responds to through these platforms. Thirdly, Emirates is doing well in introducing innovative payment schemes for bookings made online and introducing certain payment cards whereby holders can pay for tickets in monthly installments and no additional charges on interest. In this case, various modes of payments are introduced, and installments could be paid in three months. Such packages are mostly developed with the aim of targeting major global events such as the 2010 FIFA World Cup (Nataraja & Al-Aali 2011). The high number of customers obtained through such schemes and packages measure the success of innovations introduced in this area.

Fourth, the airline does well in other processes that are aimed at increasing flight security during landing and takeoff to reduce the costs of paying damages. Processes that involve services delivery to customers are also enhanced through innovations. Firstly, the process of checking in and booking flights is simplified in such a way that customers can do it online. This way, they do not have to be attended to by an employee and is an innovative way of reducing labour costs. The process of dropping and collecting baggage before and after flights has been introduced to guarantee the safety of passengers’ items and proper storage (Monteiro & Sull 2010). The reduction of funds spent in compensating customers for damages due to loss of baggage or poor security measures the success of the process in innovations. An increase Emirates overall profitability due to these processes is also used for measuring. For instance, in the year 2009 -2010, Emirates increased its revenues by US $ 777million while the losses experienced across the industry amounted to US $9.4 billion.

Areas Emirates Airline is not doing well

The failures in this area affect some processes that touch on the customer experience. For instance, sometimes customers experience flight delays that may affect their traveling schedules and plans. In this case, the airline does not have a process of providing compensation to customers for any losses or inconveniences that are experienced due to these delays. Additionally, an innovative procedure for communicating the flight delays does not exist. Another failure affects the airline’s strategy of acquiring aircrafts with a high passenger capacity in order to increase its revenue presently and saves other costs. Competition from other airlines is rising, and this may have a negative impact in the future because the number of customers may reduce. Thus, the airline has failed in developing an innovative strategy that will save costs, ensure environmental sustainability and make sure there is no wasted space on flights. Protectionism in the foreign markets is likely to affect the airline next phase of growth since the framework of agreements on open skies are threatened, ending the liberalization trend that enhanced the airline’s growth.  Presently, Emirates have not come up with a different framework for ensuring that that the number of customers from the foreign countries will not decline (Mouawad 2015). Finally, the airline fails at having some processes that enhance customer experience in relation to some services. It lacks well laid down procedures that should be followed in some instances. For instance, customer experiences reports indicate that the dropping off baggage in the airport cannot be done until 3 hours before the flight departs in some airports. This creates long queues by customers as they wait for the crew on the ground to begin the process of taking their baggage. Besides, there is no consistency in the process applied by the airline across many destinations. In some places, customers can be able to drop their baggage 5 hours before a flight departs (O’Connell 2010). Lack of adequate policies that touch on the areas is a measure of how Emirates is doing little to improve these services by innovatively developing solutions. For instance, no budgeted amounts are set aside to research and manufacture an aircraft with a minimum passenger capacity that has the capability of saving fuel.

Emirates is doing well in by introducing certain processes and programs that enhance the growth of innovations. On the other hand, a few of the failures experienced in Emirates airline processes that would have utilized advanced technologies to develop innovative solutions affect its maturity level (Emirates 2015). Thus, the maturity level of the airline in this area is at level three since there is room for improvement.

Tools

Areas Emirates Airline is doing well

The airline makes use of systems and other features in its key assets to support innovations in its business activities. One of its significant efforts in this area entails the airline’s collaborative work with manufacturers to manufacture planes that are more fuel-efficient through certain features. This efficiency arises from their engines that are greener such as the Airbus 380 and Boeing 777. The introduction of such large aircrafts ensures that the flight times are reduced implying that there are lesser landings and take off. Secondly, to enhance safety, Emirates has been able to develop and introduce a safety solution named as SmartLanding and SmartRunway in collaboration with other players involved in the development of advanced technology. This advanced technology safety solution brings a new level of safety to aircraft landing by reducing runway incursions and excursions risks (Nataraja & Al-Aali 2011).

Thirdly, to raise services levels, the airline introduced online check-in for passengers instead of routine check in that may have required number of staffs. Besides, a contract between Emirates and British Telecom Global Contact was signed to see the upgrading of Emirates Contact Centres to make sure new and improved services are provided to customers. A baggage handling system has been introduced to ensure there is a reduction in the number of mishandled bags. In addition, it increased the process of baggage handling by 22%, increased the effectiveness of handling by to 99.3% and reduced the cost of administration and compensation by 22.7% (Monteiro & Sull 2010). In the maintenance of the fleet, the Airline opened a Technical Facility that supports its increasing fleet through maintenance. This facility includes a paint shop for repainting aircrafts that employ advanced technology with the capability of reducing in-flight drag. Technical and operational teams work collaboratively and use a process Improvement program (PIP) to evaluate an aircrafts performance. The aim of the program is to identify the airplane that delivers the best performance and burns fuel most efficiently on a given route. An analysis is then done touching on the issues of engineering and flight plans to provide an understanding of what gives optimized performance and this lesson is transferred to a different aircraft (O’Connell 2010).

The deployment of Electronic Flight Bags has made the aircraft cockpits to become paperless. This is after the replacement of flight plans that are based on the traditional paper with information retrievable from the laptop. This innovatively saves on papers and ensures operations are conducted in an environmentally friendly manner (O’Connell 2010). A Miles Accelerator feature was created to award members bonus miles by zones on certain flights. This feature is designed in such a way that revenues on flights with lower loads are boosted (Emirates 2015). Emirates provides its cabin crew with a digital device known as Knowledge-based Inflight Service (KIS) to access the airline’s CRIS CRM system. This device permits them to find out the preferences of the passengers, record passengers possible complaints, allow passengers to make last minute payments for upgrading an in-flight within mile (Nataraja & Al-Aali 2011). The success of these systems and special features included in their planes in enhancing innovations is measured through the airline’s increase in profitability over the years. It is also measured through the return on investments (ROI) whereby the costs of investments in these special features and systems are deducted from the gains through their addition.

Areas Emirates is not doing well

Certain challenges presented by the systems and unique features of the airline still lack innovative means of solving them. Firstly, making sure that the A380 continues to operate as one of the Emirate’s fleet or replacing it with an equally fuel-efficient aircraft is a challenge in the future. This is because lack of new customers has made manufacturer refuse to commit to creating engines that consume fuel more efficiently without the presence of new customers. In this case, Emirates has not yet come up with innovative way of replacing the aircraft in the future. Secondly, the rising competition has made it possible for different airlines to introduce entertainment systems that enhance the experience of customers. However, Emirates has failed in providing uniqu features of high quality in these systems. A comparison of the systems in Etihad and Emirates reveal that there is no much difference in what is offered in the airlines. Nevertheless, Emirates does not pay much attention to detail as compared to Etihad. The Television screens installed by Emirates were very dark and not well defined making it challenging to watch the Television programs or movies. The majority of their headphones did not work properly while those of Etihad worked perfectly and of much higher quality. Thus, it is clear that although the airline tries to make customers access the best experiences, not everything works properly making it score poorly in this area. Thirdly, despite having a more modern fleet than other airlines in the Persian Gulf, the available range of choices is similar to other airlines. This means that, same routes, airports, classes of travel, offers and similar loyalty programmes. Yet, some airlines like Etihad can have a flexibility option for customers, unlike Emirates that does not give the option of changing travel plans to customers since flexible tickets are not provided (O’Connell 2010). Losses due to lack of differentiation and poor ROI obtained from investing in some of the systems and features measures the failure of the airline innovating. Innovation assessment in this area shows that the maturity level of the airline can be considered to be at level three. This is because of the wide range of systems that assist in automating most of the operations while others improve its efficiency and saves costs.

Recommendations

The recommendations given in this report target the weaknesses observed in each of the three areas assessed for innovation using the IMMM model. On the area of people, Emirates should establish a recruitment policy that will not affect the corporate culture that supports innovation. Competitive compensation packages should be given at all levels of the organization structure. Rewards and benefits should be given whereby a system of recognizing the best-performing employees will be essential to make sure rewards are given in terms merit. Employees that show more commitment and participate in bringing innovations are given bigger rewards than those who do not participate fully. Promotions should be done internally instead of hiring externally for the posts at higher levels in the organization structure. This will retain the best talents and motivate employees to bring continuous innovation ideas to the airline (O’Connell 2011).

The other recommendation targets the processes that affect the customers’ experiences. It is not possible to eliminate flight delays completely, for this reason; a proper procedure of informing the customers about any inevitable delays should be established. A procedure for compensating and apologizing to those who experience losses due to these losses should also be introduced to make sure customer loyalty is maintained (O’Connell 2011). To make sure that environmental sustainability program is not affected in the future, Emirate airline should establish research and development department that will help in creating engines that are fuel-efficient and avoid relying on manufacturers only. Inconsistencies in the processes should be eliminated such that the same procedures should apply to all airlines. Other modes of customer engagement should be established to curb the likelihood of customer decline due to protectionism by foreign markets (Mouawad 2015). Finally, the recommendations in the area of tools focus on pushing the airline to come up with systems that are unique to provide a different customer experience from other airlines (O’Connell 2011). 

Conclusion

Emirates Airline in UAE is one of the biggest companies globally in the airline industry. A corporate culture of innovation that is driven by the top management enhances its success in business. Over the years, Emirates has expanded its fleet to more than 201 aircrafts that including the 308 flagships with a huge passenger capacity. The airline is considered as one of the most innovative airlines in offering amenities that improve customer experience. These innovations are made possible by recruiting and management of human resources properly, development of good ideas and utilization of advanced technologies to implement these ideas. Thus, IMMM model role in this report has been to assess the level of maturity in the areas of people, processes, and tools. Subsequently, weaknesses are identified in these areas and recommended innovations to rectify the potential challenges are provided. The assessment indicates that Emirates Airline general maturity is at level three. This maturity status may move downwards or upwards in the future. This depends on the efforts that the airline will put to overcome the challenges in the future such as rising fuel prices, high competition from other airlines and protectionism by foreign markets. The recommendations provide specific solutions that should be implemented to tackle the challenges innovatively.

References

Emirates 2015, Emirates Marketline Company Profile, pp. 1-26, Business Source Complete, EBSCOhost, viewed 28 November 2015.

Monteiro, F, & Sull, D 2010, ‘Up, up and away; Emirates Airline has bucked industry slumps with a 25 per cent annual growth rate since it was founded in 1985. What lies behind its success and what challenges does it face as it prepares to step up its expansion?’, European Business Forum, 23, p. 59.

Mouawad, J 2015, ‘With rise of foreign rivals, U.S. airlines challenge open-skies agreements’, International New York Times, 2015.

Nataraja, S, & Al-Aali, A 2011, ‘The exceptional performance strategies of Emirate Airlines’, Competitiveness Review, 5, p. 471.

O’Connell, JF 2011, ‘The rise of the Arabian Gulf carriers: An insight into the business model of Emirates Airline’, Journal Of Air Transport Management, 17, Selected Papers from the 13th Air Transport Research Society Conference, pp. 339-346.

O’Connell, JF 2010, ‘The changing dynamics of the Arab Gulf based airlines and an investigation into the strategies that are making Emirates into a global challenger’, World Review Of Intermodal Transportation Research, 1.

Sarsfield, K 2014, ‘Interview: Thierry Antinori – Emirates Airline executive vice president’, Flight International, 977.