The government of UAE fully owns the Emirates Airlines airline
The government of UAE fully owns the Emirates Airlines airline. As at 2016, the company was providing scheduled passenger services for approximately 154 destinations across the globe. Emirates Airline operates in the Middle East, the Americas, Europe, Africa, and Asia. The firm operates the largest fleet of Airbus A380 and Boeing 777 in the world. The company is headquartered in Dubai, and employed approximately 105,746 people as of March 31, 2016 (The Emirates Group SWOT Analysis, 2016, p. 1). Emirates airline recorded revenues of AED 94,684 million \u00a0(US$2.54 billion) during the financial year ended March 2016, a 1.9% increase from the previous financial year. The operating profit stood at AED 3,659 million (US$98 million) in the same financial year, down from 9,391 million (US$252 million) in the financial year 2015, a decrease of 61% (The-Emirates-Group-Annual-Report, 2017, p. 204). Emirates Airlines has recorded immense profitability over the years and one of the reasons attributed to the growth is its high affinity for technological advancement. Therefore, this study will focus on the ways the company has used technology to improve its operations and customer experience.
Technology in the Airline Sector
Globalization has been on the increase in the past six decades and is expected to rise further in the 21st century. Technological advancement has been the force behind such intense changes around the world. Technology has become the benchmark for measuring organizational efficiency and effectiveness (Accenture, 2016, p. 7). Until the September 11, 2001 attacks, the airline sector, though it is purposed to be an early adopter of technology as compared to other industries around the world, was recording high operational costs, mass congestions, and reduced on-time performance. However, due to such issues, there was need to optimize operations, boost security, augment passenger convenience and experience, improve service delivery, and lower operational costs (Wong, 2006, p. 573). Information technology has played a strategic and technical role in achieving the objectives. The figure below shows the investments airlines are making towards technology.
Figure 1: Resources Spent on Technology from 2010 to 2016. (Source: SITA)
Fig1 above indicates the resources airlines are spending on IT across the globe. Based on the figure, the investments have been increasing. The percentage of resources channeled to IT stood at 4.19% in 2010, and increased to 5.82% in 2014, and declines to 5.73% in 2016.
The figures signify that the airline sector is increasingly absorbing technology in its operations. The chart below shows the areas that attract more investments in the industry.
Figure 2: Airline IT Spending Worldwide in 2016 and 2017 by Technology Sector (Source: Statistica)
According to Fig 2, investment in IT services was led with 33% in 2016, and 31% in 2017. Software followed with 24% in 2016 and 25% in 2017. Communication services and data center systems accounted for 17% for the two years respectively, and ICT devices recorded 10% and 11% for 2016 and 2017.
The two diagrams are a clear indication that technology has engrained the airline sector. The Emirates Airlines is one of the companies that have inextricably interwoven technology in their operations as stated underneath.
Technology in Emirates Airline
The Emirates Airline utilizes technology solely for strategic benefits, which include improved profitability, market share, efficiency and effectiveness, and quality service delivery. The firm employs technology in the following areas/ways.
Meeting Passenger Needs and Demands
Online Booking
Due to the intense competition surrounding the airline sector, most are striving to enhance customer experience by employing tools and equipment that will create them value (Massy-Beresford (2017, p. 3). Therefore, Emirates has achieved higher customer satisfaction by deploying the online booking technology that allows travellers to book flights via the internet, other than calling a travel agent. For instance, customers wishing to fly 50 to one-hour flight do not need to queue to book a flight like the way it used to be with the paper-based system.
Improve Passenger inflight Experience
Usually, passengers’ demands change significantly after boarding a plane. Because at least each one of them carries a digital gadget such as a smartphone, a laptop, or an iPad, they expect unique experiences while onboard. Therefore, Emirates has focused on providing fast Wi-Fi that travellers can use to access entertainment services and do shopping online. Businesspersons can work, send, and receive mails while inflight. “Non-Emirates Skyward Members” can enjoy up to 20MB of free Wi-Fi for 2 hours of log on all devices after which one is required to purchase up to 150 MB for as low US$9.99 and 500MB for US$15.99 to be used throughout the flight. On the other hand, “Emirates Skyward Members” can enjoy free or discounted Wi-Fi throughout the flight (Emirates Inflight Entertainment, 2016). In November 2015, the company unveiled a new generation of on-board entertainment systems with large screens in its A380s and 700-300ERs that offer passengers a broad choice of content inflight. The image below shows the new set of systems in the economy class.
Figure 3: Emirates introduces new generation in-flight entertainment system (Source: Emirates Media Centre, 2015).
The ability of the company to offer unique on-board customer experience has contributed to the increased number of customers in its commercial sector.
A study by the International Airport Review Technology (2017) supports the view that technology has simplified the search, booking and inflight experience in most airlines as indicated in the figure below. Fig 4 below indicates that 41.73% of passengers use technology to search and book for flights, 26.89% prefer checking-in online, 15.91% pay for flights online, 12.12 fancy the on-board Wi-Fi, 8.51% favor communication via smartphones (mobile Apps), and 4.6% prefer communicating with their respective airlines using technologies.
Figure 4: How technological advancements have simplified the search and booking of flights and inflight Experience. (Source: International Airport Review Technology, 2017).
Mobile Technology
“Ten years ago, if there were disruptions, passengers would line up at the gate in front of an agent and it would take hours to accommodate them one by one, even for as small a disruption as one cancelled flight” (Turban, 2015, p. 203). However, this has changed and with the increased use of smartphones and tablets among travellers, the Emirates can use its App to notify passengers about disruptions and relay information that is deemed useful for travellers (The Emirates App, 2017).
Distribution of Information
Digital communication is the norm in the modern-day business. Emirates Airline is fully utilizing the social media (Twitter and Facebook), as an effective digital platform to communicate and interact with its customers on a real-time basis. The channel plays a significant role in pushing information to a large number of consumers, who may be affected by changes in the airline’s day-to-day operations. . Information dissemination is done on a real-time basis and this has brought a positive impact on customer experience. McAllister (2012, p. 21) supports this view by stating that airlines that were in constant communication with their consumers recorded high levels of customer satisfaction. In addition, Emirates also encourages customers to use the platform to rate the level of service delivery; thus, enhancing the quality of services.
ICT as a Strategic Tool for Emirates Airlines
Reduced Costs of Operation and Enhanced Efficiency
Every sphere of the airline uses technology. Emirates airline has employed technology to forecast the demand and supply of customers in different destinations, in order to save operational costs. For instance, in July 2017, the company made the decision to cut down on its US flights because the fleet serving the route was higher than the number of customers; therefore, it significantly lowered the operational costs (Shweta, 2017). Further, the company has deployed technology in other areas such as online check-in and real-time luggage tracking and collection for passengers. The ability to leverage technology to reduce costs has led to improved profitability and increased fleet size.
Furthermore, technology has been instrumental in enhancing the operational efficiency and lowering the cost of fuel. Since fuel contributes 30% of the overall operating costs, manufacturers such as Boeing have been able to develop new and less noisy planes that use a reduced amount of fuel. They can carry higher payloads and cover longer ranges with lesser amount of fuel; hence, the airlines are able to increase its connectivity (Boeing, 2008). By acquiring the new Airbus A380s and Boeing 777-300ERs, Emirates has broadened and maintained its global network efficiently and at optimal costs (Emirates Media Centre, 2015). The image below depicts the changes in efficiency between the early jets and the current ones.
Figure 5: Aviation and the Environment: Our Commitment to a Better Future. (Source: Boeing, 2008)
Quality Service Delivery to Customers
Passengers prefer using self-service technologies such as apps, bag collections, and online check-ins. They record high levels of satisfaction with an airline that has the type of technology in place (International Airport Review Technology, 2017). Emirates Airline has boosted its ratings by having the technologies in place and this reflects high levels of customer satisfaction.
Conclusion
The study established that in the highly competitive and hostile business environment, companies that are able to leverage technology in their operations will record increased profitability, efficiency and effectiveness, quality service delivery, competitive advantage, and higher market share. Emirates Airline has the largest of fleet of Airbus A380 and Boeing 777 in the world. By absorbing technology in its operations, the company has recorded quality customer service, reduced operational costs, and earned a competitive advantage in the global airline industry.
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