M RahmanPESTEL analysis of Emirates Airline
This detailed ‘PESTEL analysis of Emirates Airline’ examines some of the macro-environmental factors that impacted on the operations of Emirates Airline in the past and continue to do so today. The airline’s journey began in 1985. It has made enormous progress over the years, and it is now the largest airline and flag carrier of the United Arab Emirates (UAE).
Political forces affecting Emirates Airline
Emirates Airline started it journey at a time when the UAE, particularly Dubai had started developing enormously. It made Dubai its hub and started providing an extensive network of services connecting many destinations around the world. Dubai is considered one of the safest places in the world and unsurprisingly, attracts millions of international tourists every year. There is no doubt that many of those passengers travel by Emirates Airline.
The support from the Dubai government has played a big role in the development of Emirates Airline. For instance, it injected $2 billion into the airline in 2020 to help it overcome financial challenges caused global economic lockdown. It is committed to providing more support if necessary (Kerr & Powley, 2020).
Volatility in the Middle East has been a big challenge for Emirates Airline for the last few years. Likewise, there are security concerns in a number of emerging nations which are some of the popular destinations of the airline. In addition, travel bans are imposed in some countries making situations worse. However, many of its international destinations benefit from political stabilities.
Economic forces affecting Emirates Airline
Economic environment is the next point to discuss in the PESTEL analysis of Emirates Airline. Needless to state that 2020 was a dismal year for almost all airlines. However, many analysists hope that coming years will be different and therefore, the airline can expect something good.
Dubai is one of the most popular tourist destinations in the world. It is also a very attractive business place. Undoubtedly, both business and leisure trips to the UAE bring substantial business for Emirates Airline. It reported a revenue of $25.1 billion and a profit of $288 million for the year 2019/20 (The Emirates Group, 2020). However, fluctuating oil prices become a cause of disruption for the global airline industry. Similarly, price pressure from competitors is a challenge for the airline.
Social forces affecting Emirates Airline
Though the average population growth in the UAE was 1.31% from 2015 to 2020, down from 1.6% from 2010 to 2015, the fact is, the population is growing. And this is good for Emirates airline particularly for its domestic market. The total population is approximately 9.9 million (Mirza, 2020). Likewise, the country is attracting a lot of expatriates from different parts of the world who work for both domestic and multinational organisations. Many of these expatriates travel by Emirates Airline.
Dubai with its world-class shopping and entertainment facilities attract millions of tourists every year which certainly benefit Emirates Airline. Similarly, many Emirati people travel around the world, which also impacts positively on the airline’s revenue.
Technological forces affecting Emirates Airline
Technological innovations and changes are happening rapidly and impacting on the aviation industry. In this connection, it is worth mentioning that Emirates Airline is using technology creatively and very efficiently. For instance, in September 2019, it announced offering biometric boarding on flights to the United States to save boarding time. It was approved by the US Customs and Border Patrol (CBP). However, some passengers have raised concerns though they are not required to use the system (Singh, 2019).
Emirates Airline has been focusing on using Artificial Intelligence (AI), IoTs, Big Data, and Robotics for quite some time as these influence its operations significantly. It has a big number of software engineers and app developers who are dedicated to working on these tech solutions to get the best out of them.
Environmental forces affecting Emirates Airline
Air pollution is a big global challenge. Campaigners have been campaigning and urging organisations and government to do their part to reduce it. In this regard, it should be mentioned that Emirates Airline has been using advanced technologies to reduce the environmental impact of its operations. It has long been asking governments to make air navigation fuel and emission friendly (The Emirates Group, 2020).
Legal forces affecting Emirates Airline
Lawsuits by passengers, governments, and NGO’s could be damaging for Emirates airline. These may sometimes cost it hefty fines and damage the brand reputation. For instance, The Australian Competition & Consumer Commission (ACCC) took court actions in 2019 against the airline over allegations of price-fixing in the air cargo industry between 2002 and 2006.
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PESTEL analysis of the United Arab Emirates (UAE)
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Last update: 07 December 2020
References:
Kerr, S. & Powley, T. (2020) Dubai vows to support Emirates as global airlines race for cash, available at: https://www.ft.com/content/352974af-77bf-407d-93fd-afe449c7d0cc (accessed 02 December 2020)
Mirza, A. (2020) Five-year average population growth rate in the United Arab Emirates from 1950 to 2020, available at: https://www.statista.com/statistics/1116189/uae-five-year-average-annual-population-growth-rate (accessed 05 2020)
Reuters (2019) Australia regulator sues Emirates in freight probe, available at: https://uk.reuters.com/article/emirates-australia/australia-regulator-sues-emirates-in-freight-probe-idUKSYU00704820090818 (accessed 06 December 2020)
Singh, J. (2019) Emirates Becomes First International Airline To Use Biometric Boarding On US Bound Flights, available at: https://simpleflying.com/emirates-us-bound-biometric-boarding (accessed 02 December 2020)
The Emirates Group (2020) Emirates Group Announces 2019-20 results, available at: https://www.emirates.com/media-centre/emirates-group-announces-2019-20-results (accessed 05 December 2020)
Author: M Rahman
M Rahman writes extensively online and offline with an emphasis on business management, marketing, and tourism. He is a lecturer in Management and Marketing. He holds an MSc in Tourism & Hospitality from the University of Sunderland. Also, graduated from Leeds Metropolitan University with a BA in Business & Management Studies and completed a DTLLS (Diploma in Teaching in the Life-Long Learning Sector) from London South Bank University.
