1. How does Emirates compete? What internal resources and assets does Emirates have that may give it a competitive advantage?

2. Assess the effectiveness of Emirates’ leadership.

Emirates Airline has been one of three Middle East carriers that were singled out by the largest U.S. airlines as being competitive threats in the U.S. markets due to an “unfair advantage” conferred by subsidies and tax breaks. Emirates was indeed becoming a competitive threat not because of government subsidies, which Emirates’ management denied, but because of its effective asset utilization and its implementation of operational strategy. Since its founding in 1985, Emirates had become one of the leading international airlines in the world.

Emirates’ founder Dubai Sheikh Mohammed bin Rashid al Maktoum saw an opportunity to start an airline that would help build Dubai into a center of business and tourism, and recruited British Airways veteran Sir Maurice Flanagan to lay the groundwork. However, the airline’s growth has been attributed to Sir Tim Clark, who was handed the critical task of route planning. Clark recognized that about two-thirds of the world’s population was within eight hours of Dubai, but the firm lacked the aircraft to take advantage of its location until the development of the Boeing 777 in 1996 and the Airbus A380 in 2008. Purchase of these two aircraft allowed Emirates to develop routes that could link any two points in the world with one stop in Dubai, allowing it to grow from 12 destinations in 1988 to 142 in 2016.

This geographic advantage was not the only way Emirates was able to become the airline of choice for over 51 million passengers. In addition to making the Middle East the hub of international travel, Emirates had created a reputation for extraordinary service, especially in the amenities it provided for its premium first-class passengers: limousine rides to and from the airport, flight attendants fluent in a dozen languages, gourmet cuisine, a stand-up bar, and first-class enclosed suites with walnut and marble design on-board spa showers. To promote these services, Emirates had created a marketing campaign in 2012, “Hello Tomorrow,” that sent a message: Emirates was not just an airline that delivered a superior experience, but it was a catalyst for connecting a new global culture of shared aspirations, values, enthusiasm, and dreams.

In the past Emirates had set itself apart from other carriers by enhancing the customer experience, but its competitors, especially those also based in the Middle East, had been improving their offerings, particularly for premium passengers, even creating an additional tier of services focused on premium economy class travelers. Some industry analysts questioned the ability of Emirates to deal with these challenges, but Emirates had been consistently profitable, and it had demonstrated its ability to not only innovate but also be able to finance those innovations and continue to grow.

However, recent concerns such as the drop in oil prices and the growth in terrorist attacks was causing many companies, especially in the Middle East, to cut back on travel for their employees, reducing the premium revenue that Emirates traditionally generated from first and business class customers. Was Emirates best positioned, with its resources and chosen strategy, to adapt to external conditions and continue its dominance in international air travel, or had its moment passed?