Introduction

This report has been developed primarily for Emirates Airlines. The idea
being put forward is for Emirates to widen their market grip into low farebudget airlines as well. Emirates have been a market leader in the aviation
industry for over 2 decades. But in order to cut short the completion and also
increase their market share; Emirates need to dive into the budget airlines
sector. If Emirates implement the plan perfectly, emirates can gain up to
30% of the entire budget aircraft market share in under 3 years. The plan is
for emirates to initially start short distance international flights to and fro 20
countries with Dubai being the international hub for these planes. This plan
will be executed with the planes being supplied by Airbus. These aircrafts will
be specially designed for Emirates new low budget carrier;
EmiratesMadyaf.
Emirates Airlines commenced operations in the year 1985. Emirates now
operate and fly to over 140 destinations around the globe. Their approximate
valuation (if gone public) is estimated at up to $40 billion. Emirates is a
subsidiary of The Emirates Group which is an aviation company holding
which is a government-owned corporation.
The main objective of this paper is to analyze and evaluate the pros and cons
of introducing a new carrier into the Emirates Airline family.

Brief History of Emirates

Emirates airlines with all its luxury, being one of the most happening cities,
have its own impressive history in Dubai, UAE. In 1984, when His highness
Sheikh Mohammed Bin Rashid Al Maktoum and Mr. Flanagan decided to

launch an airlines with a capital of dollar 10 billion, they had a clear vision of
their goals. By leasing their first jets from Pakistan, Emirates had their first
launch. Later, in 2005 they ordered 42 Boeing-777, which was one of the
largest orders ever placed; then on Emirates has grown rapidly and was
taken to new heights. Even though the Dubai government owns Emirates, it
has been treated as a separate business entity, which has helped in its
tremendous growth through their unique style and through competition. Over
the years the airline business has expanded to over 140 destinations, which
gives the customers the benefit of direct flights. Besides that, the airlines
business has expanded to award-winning cargo division, leisure division and
an airline IT developer. The tremendous feedback from the pleased
customers has only raised the rank of Emirates among all its competitive
flights. Accentuating its growth, Emirates airlines is one of the largest
operators of Airbus A380 and Boeing 777. Moreover, it has grown in its
financial status immensely, which can be seen from the survey as of
2013/2014 which shows it carried 44.5 million passengers and 2.2 million
tons of cargo marking its at the summit among other airlines.

SWOT analysis

Strengths:

Emirates airlines have the privilege

Weaknesses:

of existing in a country, which is

customers, and even their

one of the best tourist hubs in the

economy class is over-priced

world.
Emirates lie in the UAE where the

compared to other international

cost of fuel is cheap.

Emirates has elevated in rank with

depends on the international

employees and 78 countries to fly

to.
By entering the cargo business,

travelers
The increase in competition has
limited the market growth, and has

Emirates have only reinforced its

flights.
The decrease in tourism can affect
it unswervingly as it mainly

having over 160 nationalities of

Emirates fail to cater the budget

raised the bench-mark.

position in the market.

Emirates also sponsor various
major events leading to an
increased brand name all over the
world.

Opportunities:

Introducing a brand new low cost

Threats:

airline for only budget travelers

coming years can be reflected as a

could open a whole new

opportunity for Emirates, and will

Increase in fuel prices in the

threat to airlines.
With flights like Qatar airways, and

give it a chance to compete with

Etihad airlines posing competition

not only high-end flights, but

for luxurious flights, Emirates has

to come up with strategies to fight

budget flights as well.

Emirates can reach to destinations

they havent undertaken so far.

Merging with local flights from

in the market
Low cost airlines like Air Arabia,

these competitors, and stand out

countries so as to provide

Jazeera and Flydubai can also be

connecting flights to locations that

considered a threat, as the budget

dont have international airports.

travelers would choose those

flights over Emirates, and hence it
fails to cater all customers.

PESTLE analysis
Economic: Emirates airline grew and was developed in Dubai, which has a
relatively strong economy and a high GDP per capita. Dubai also demands
high tourism and this flight is the number one choice for most. All these
points lead to considerable revenue for the company. After the Great
Recession of 2008, there had been a downturn in the aviation industry as the
cost of labour, fuel, raw material costs all increased, but emirates combated
this by reducing rates to their popular destinations such as India and
Pakistan. Now more and more people look to saving their money on
travelling, therefore this will benefit our budget airlines.
Technological: Every company tries to gain the first mover advantage for
becoming highly popular and successful. Emirates has won numerous awards
for their brilliant technology. Emirates relies on Boeing 777 and Airbus A380,
both of which lead to remarkable fuel saving and CO2 per passenger.
Emirates have adopted the best flight planning system, Flextracks, that will
allow them to use flexible air traffic routes leading time to save time and
fuel. Looking at a sample of 592 flights, Emirates managed to save 628 tons
or fuel and reduced overall trip time by 57 hours. Every minute reduces CO2
emission by 160 kilograms. With this much being saved per minute, the fuel
requirement also lowers, making it more profitable for the budget airline.
Political & Legal: Airline industries have been greatly affected by the tragedy
of the 9/11 attack. Due to this, the security all over the world has increased.
Airports have to pertain to strict regulations that are set up by the various
government authorities around the world as they operate in an environment
where passengers safety is of top priority.

Socio-cultural: Emirates headquarters lie in Dubai where a significant

proportion of the residents have a high level of education and are classified
as lower or upper middle class. But as UAE is a developing country, it also
has a lot of laborers. Emirates is one of the best airlines in the country, and
because of this it provides their customers with a higher social status. We are
going to capitalize on the goodwill of Emirates making Emirates Express a
first choice for all those seeking a cheaper airfare.
Demographic: UAE lies in the Middle East making travelling by airlines the
most sought after mode of transportation. Dubai population is extremely
diverse and a majority of its population lies in Generation X and Y. Most of
the Baby Boomers will retire leading to lesser spending on airfares. As said
before, Dubai is a multicultural city in which 85% of the residents are
expatriates. For catering them, they will be provided with the same
entertainment system, ICE entertainment, which consists of TV shows,
movies and radios in over 30 languages.

Ecological: Customers are increasingly becoming more aware of the impact

of pollution on the planet. According to research, the aviation industry
accounts for approximately 5% of global climate pollution. Emirates has
worked towards increasing their fuel efficiency and their results are 14.5%
better than the International Air Transport Association (IATA). Airbus A380
uses 20% lesser fuel than any large aircraft. Lower fuel being burnt leads to
lower CO2 emissions. These aircrafts will consist of engine GP7200 which will
save approximately 500,000 litres of fuel per aircraft in one year. These
A380s and latest Boeing777s leads to Along with this Emirates also
contributes to conservation programs in UAE and Australia for wildlife and
animals.

Consumer Analysis

Majority of the consumers flying by Emirates choose it for reasons such as

business, tourism or further studies which is backed up by the fact that
Dubai is not only the center for tourism but also the hub for healthcare and
education. For example, International events, festivals and the Dubai World
Trade Centre exhibitions are few of the reasons that add to the advantage for
Emirates. What's more, Emirates provides entertainment and quality services
of high caliber and facilities due to which we have a loyal customer base. As
a part of our aircraft line we are introducing the new budget airline
EmiratesMadyaf. We will be adopting the niche marketing strategy to
concentrate on the lower and middle income groups.
Profile variable:
Geographic Location: This new airline is being provided essentially to allow
travelers to travel not only to short distances but also to travel to places of
their choice but within the time span of 5-6 hours.
Demographic variable:
Income group: The lower and middle income classes are the target for our
budget airline. This would allow them to fly but at a fare which is reasonable.
Behavioral Variable:
Usage rate: With an average of more than 1,500 flights flying to 6 continents,
the usage rate of airplanes can be measured as heavy usage for various
different reasons such as business, leisure or further studies.
Loyalty: The target group would consist of those consumers who travel by
other budget airlines but have the desire to travel by Emirates due to the
quality service provided and cannot since the cost of travelling is expensive.
Also attention will be paid to retain our existing consumers.

Buying on occasions: People usually travel during school breaks or festivals.

Hence we target mostly tourists and families who want both comfort and low
prices which is what EmiratesMadyaf is being launched to provide.
Psychographic Variable:
Lifestyle: Concentration is on those buyers who not only value their time but
also have their own opinions, beliefs and interests that guide them to travel
around the world to gain new experiences and to make memories.
To conclude, our target market mostly focuses on those buyers who want to
travel in a pleasant manner and particularly the individuals who belong to
the lower and middle income groups. Be it families with children, students
travelling or tourists on a vacation, these groups are taken into account in
our target market.

Maslows Hierarchy of Needs/Wants

Tourist's needs or desires are arranged hierarchically. Needs that are at the
bottom level are relaxation, trailed by wellbeing/security, selfesteem and
improvement, and satisfaction needs. The core idea hidden in this theoretical
system is that an individual's travel desires changes with his/her travel
experience. People's travel needs change over their lifetime and with
acquired travel experience. As tourists turn out to be more experienced, they
progressively look for fulfillment of higher level needs. The following
Needs/Wants are satisfied:

1) Social Needs It is a part of human nature to want acceptance and to

belong in the society. An individual purchases tickets to visit places not
only to explore them but to also spend quality time with their loved

ones and strengthen family bonds and friendships. Hence, the social
aspect is achieved.
2) Esteem needs and Self-Actualization The satisfaction one receives
from esteem needs is a result of being accepted and valued by the
society. By travelling, people not only visit important monuments and
museums but they also explore the temples and shrines which lead to
them experiencing the different cultures and traditions. Different
places have different ways of affecting a persons way of thinking that
can lead them to live life in a positive way through self enhancement.
Once the esteem needs phase is achieved, self-actualization becomes
easier to reach.

Competitor Analysis
Emirates, one of the leading airline companies in the world, amongst the
other high flying carriers such as Qatar Airways, Etihad Airways, and
Lufthansa etc. compete for slot dominance which has become a glaring
reality. The integration of EmiratesMadyaf has also been open to prevailing
competition from several low-cost carriers including:
Fly Dubai
Launched in 2008, operates in from a modernized and sophisticated Terminal
2 functioning in the Dubai International Airport and currently has a massive
fleet of 45 Boeing 737-800 NG flying to over 96 destinations including Middle
East, Russia, Africa, and Eastern Europe. The airlines are designed to offer
only certain respective services such as optional purchase of checked-in
baggage, weightage of max. 32 kilos and pre-booked food services (Robeel
Haq, 2010).

Air Arabia
Air Arabia was nominated as Middle Easts Best Low Cost Airline at the Skytrax
World Airline Awards 2013 (Skytrax, 2013). Serving around 59+ destinations from two

imperative hubs, U.A.E. and Morocco carries a considerable fleet 0f 20 new

Airbus A320 aircrafts. Their net profit margin had a 6% increase; however a
slight dip of 2% turnover recorded as of 2009/10 bearing about 3m
passengers.
Al Jazeera
Serving Dubai since 2005, Al Jazeera is one of the youngest fleets with an ontime performance of 95%. Undoubtedly, the existence of Al Jazeera has
jeopardized the existence of EmiratesMadyaf. The CEO of Al Jazeera aims to
become the leading regional network airline and focuses on positioning of
brand using fundamental tactics. Moreover, whilst Emirates, Etihad Airways
and Qatar Airways have fixated on long-haul flights, Al Jazeera plays safe and
focuses on short-haul among vulnerable competitors.

INDIRECT COMPETITION

Other low-cost airlines that are not in direct antagonism but may still pose a
threat to EmiratesMadyaf are as follows:
Ryanair Headquarters in Dublin, Ireland; Ryanair poses a significant threat
to EmiratesMadyaf position due to its old dominance and consistent
performance over the years. With total revenue of 1.24bn and an average
passenger count of 63.8m along with flying to several destinations,
competition is definitely fierce with Ryanair around.
EasyJet - Biggest low cost airline in Britain established in 1995, EasyJet gives
competition to all the no-frill airlines with its whooping designed aircrafts and
high maintenance quality standards. Currently, their revenue stands at
1.19bn with a passenger fleet of 83m per year. Moreover, EasyJet competes
drastically for the epitome in budget airlines against EmiratesMadyaf as its
sheer dedicated cabin crew and high flying reputation speak for itself.

STP PROCESS
SEGMENTATION
TARGETING
PRODUCT POSITIONING
Segmentation is likely to be
Targeting is likely to be
Emirates airlines are likely to
demographically distributed undifferentiated; however more
be considerate with
with emphasis on
distinct focus on the untappedEmiratesMadyaf in terms of
concentrating on those with
market segments; targeting positioning strategies adopting
both high and medium
those in need.
highlighting the user, benefit
lifestyles.
and price differentiation
aspects distinctly.

Product

Product

Emirates, being one of the highest grossing airlines with recurrent

improvements and innovations introduce EmiratesMadyaf, a vast integration
of Emirates discovering and integrating a new service into the market, a
budget airlines low-cost carrier.
One of the main primary core services that it will provide is high-tech inflight
entertainment systems that will upgrade its overall entertainment quotient.
Abstaining from charging per kilogram and initiating an allowance rate up to
15kg of free luggage baggage.
With collaboration of Emirates A380 flights, passengers can now enjoy high
end services including neon lights and ambient lighting used for tailored
cabin atmospheres for night flights, bar facilities and other luxurious
accommodations that satisfy both budget carriers cost perspective and
passenger appeal.
Moreover, the no-frills airlines can consolidate with Terminal 3 which is
completely designated for Emirates.

EmiratesMadyaf also aims to introduce more user-friendly amenities like

handicapped restrooms, fuselages that are circular in design which helps to
alleviate from pressure loads by tension and also helps relieve passengers
from stress concentration or fuselages rectangular in shape as it proves more
efficient in space consumption.

Nonetheless, EmiratesMadyaf aims to enhance its passenger comfort level

by implementation of environmental control systems coupled with efficient
air controlled systems. Air within cabinets is completely interchanged every
2-3 minutes wherein high competence filters eradicate about 99.99% organic
matter and particulate. Alliance with the ICAO who aims to cut back on CO2
emissions by 2020 implies Friendly cabin will introduce Wingtip devices
proposing sustainable fuel improvements and resourceful operations (Airbus
ProSky, 2015).

Visit to Step Conference 2016

Held on the 4th and 5th of April 2016 at the Dubai International Marine Club,
Step gathered 4000+ like-minded investors, entrepreneurs and industry
experts tackling topics involving Tech, Digital and Entertainment. Step 2016
also brought back Startup Basecamp across MENA, Europe, North America
and other regions providing a platform for new ventures to showcase their
ideas to investors and mentors. Addition to the overall Step agenda included
one-on-one sessions, pitch contests for designated start-ups and several
workshops.
Eminent industry leaders stipulated their insights on respected topics: the
Tech track observed investors discussing latest trends in e-commerce,
wearables etc. All these activities not only would give a head start for the
propagation of EmiratesMadyaf, but also develop recognition and a niche for
itself among the other high flying and established businesses.
This event has the potential to take EmiratesMadyaf to new horizons and
maintain a sustainable position for itself contributing to the Emirates airlines
portfolio.

Pricing
Price is an important element in the overall marketing plan and an apt
pricing strategy needs to be set for EmiratesMadyaf. Many factors affecting
the appropriate pricing strategy including:
Passengers carried per year and responsiveness of target market The size
of the passenger fleet will determine the pricing tactic and the aggregate
price to be charged into the market. Moreover, their willingness and attitude
to pay for elastic prices is a factor.
The cost structure Traditionally, low-cost airlines aims to offer low fares via
online booking systems, concealment of free in-flight catering and the
attainment of homogenous flights (Cassia et al., 2006). With the containment
of costs being an essential factor in the successes of low-cost carriers,

researchers have devised how cost-efficiency is essential in the derivation for

the pricing policy. (Gudmundsson, 2004).
Fly Dubai
The pricing strategy is miscellaneous

Air Arabia
Pay less, Fly more is Air Arabias

for both economy and business

tagline wherein price plays a crucial

travelers wherein the latter focuses on

factor in booking flights. It focuses on

convenience and direct flights. Fly

the untapped target segments and

Dubai adopts price-cutting wars during

therefore offers more of a segmented

Ramadan time sustaining future growth

pricing approach than dynamic pricing

and also focuses on dynamic pricing.

to the Middle Eastern target audiences.

Return flights from Dubai to Beirut

Similarly, a roundabout flight from

24th December Jan 2nd costs AED1,690

Dubai to Beirut costs AED2,424, not

very economical here.

As Fly Dubai may be a clear-cut potential competitor of EmiratesMadyaf,

their pricing strategy is likely to be quite analogous; also most probably
offering a dynamic pricing tactic. Through the integration of the novel budget
airlines, the main focus will be on providing on low fares and competent
prices. Where low-cost and full-cost carriers coexist on completely separate
ranks, they do not compete together.

Place
Emirates airlines currently fly to 164 destinations spread over 78 countries in
six continents. Emirates have a dense presence in the South East Asian
countries as a majority of UAEs population are citizens of those countries. As
our budget airline is still fairly new, we plan on offering flights to 54
destinations in 20 countries listed below. We also offer
1.

2. Afghanistan
3. Bahrain
4. Bangladesh
5. China
6. Egypt
7. India
8. Oman
9. Pakistan
10.
Philippines
11.
Qatar
12.
Kuwait
13.
Saudi Arabia
14.
Sri Lanka
15.
Nepal
16. Yemen
17. Jordan
18. Lebanon
19. Iran
20. Iraq
21.

22.

Travel agencies and internet agencies will be the two major

intermediaries. The customers can choose either of the above or use

the emirates website for their bookings. Both of these agencies provide
a full-fledged plan for their clients and offer tickets are a cheaper rate.
These agencies will be rewarded a commission as an incentive to sell
more tickets.
23.

24.

25.

26.

PROMOTION

27. Emirates airlines are a strong believer of promoting their product, their
budget for promotion almost reached a billion dirhams. Promotion is the best
way to communicate the product to the end users. For our budget airline, the
promotion mixes that will be used are as follows:
28.

Direct Marketing: We will be making use of personalized text messages

and e-mails that are generated by software and forwarding them to our
potential users. The benefit of this over advertising is that only those who
have subscribed for offers will receive these emails, making all the

receivers our target market.

29.
Advertising: Although the cost of advertising is great, it is very effective as
it reaches a large market. The media that will be used for advertising are
digital media, print, broadcast and outdoor media. Digital media,

especially the internet and mobile portion has become an exclusive way of
communicating and receiving feedback from the customers. Social media
advertisement leads to improved sales and great exposure. Print media
refers to newspaper and magazines, for those who dont have enough time
to surf the web; this would be the most appropriate. TV and radio
advertisements are likely to make the product more appealing to the
people; they are also moderately cheaper per target reached and
communicate to a mass audience. Outdoor media that will be used are the

bus stops and billboards in the UAE.

30.
Public Relations: or PR is used for changing the way an organization is
viewed by various groups. Emirates being a financially stable organization
can help in developing positive PR by undertaking sponsorships.
Sponsorships help in raising awareness of the new airline. Many events
take place in the UAE that are viewed worldwide such as tennis, F1 and
horse racing, sponsoring one of these events will provide great media
coverage.
31.

32. The other methods in promotion mix are Personal Selling and Sales
Promotion. Personal selling would not be feasible (in time and money) for the
organization as it would involve face-to-face conversation. Sales promotion
provides incentives in order to make quick sales, Emirates is a reputed airline
and doesnt require making quick sales as they already have a large following. If
anything, these will be used during a recession to attract people.
33.
34.

35.

Timing and Budget section

36.
37.

The current slogan Hello Tomorrow is used to unite people of

different cultures from around the world and through that we plan to

bring forward EmiratesMadyaf so as to be able to fly people home to

their families.
38.
39.

The entire idea is primarily focused on the lower and middle

working class who value time and money; it would be suitable to

launch this new low-cost airline during peak times when there are
festivals, ideally at the beginning of the year (January 2018).
Promotions ought to begin at least a year in advance to catch the
attention of potential consumers.
40.
41.

The budgeting plan will concentrate on marketing

communications costs such as advertising, public relations, including

the planning, expenditures and ongoing tracking of the marketing
efforts. This will help us to spend our budget with maximum efficiency
and generate maximum sales. Moreover, the integration of Wingtip
devices and other environmental control systems may incur some
heavy capital costs but subside in the future. Overall, a feasibility study
and financial statements need to be undertaken to ensure the
implementation of EmiratesMadyaf is viable and sustainable in the
unforeseeable future years to come.
42.
43.
44.

45.

Conclusion

46.

Emirates are known for its successful and innovative products

and services that have been given recognition by its loyal customer
base. The inclusion of EmiratesMadyaf to Emirates airlines will give it
the opportunity to cater to new clients by altering the experience
according to their needs. Not only will this new low-cost airline function
in an environmentally friendly manner but it also helps to increase
tourism.
47.

48.

49.
50.
51.
52.
53.
54.