Background
- Middle-East based airlines have carved enviable positions by connecting the fast-growing emerging economies in Asia and Africa with the more developed economies of the West
- Their growth, in turn, has raised the profile of airports in the Middle East – such as Dubai, Abu Dhabi, and Doha – as important transit hubs and key alternatives to the traditional European transit hubs in London, Frankfurt, and Paris
- Consequently, the three Airline Alliances (Star Alliance, Oneworld, and SkyTeam) have tried to woo some of these Middle Eastern airlines to join and bolster their alliances
- While most Middle Eastern airlines, for multiple reasons, have avoided joining any of the alliances, Qatar Airways became the first major Middle Eastern airline to join an alliance (OneWorld Alliance) in 2012, in what was described in the media as a coup
Company details
- Emirates is the largest Middle Eastern airline and among the top four globally in terms of passenger kilometers flown
- It is currently not part of any of the airline alliances
Current scenario
- COVID-19 has disrupted and severely affected the airline industry, and all airlines are looking to make strategic changes
- Emirates is contemplating more partnerships than it had been in the past
Problem statement
- Hypothetically, Emirates is now looking to join one of the three airlines alliances – Star Alliance, SkyTeam, or Oneworld
- It has hypothetically hired your team to help it in making the right choice
Key decisions to be made
- Is it advantageous for Emirates to join one of the alliances? What are the pros and cons?
- If joining an alliance is the right decision, what is the priority order of the alliances (highest to lowest) in terms of choice of joining and why? What factors will determine the priority order?
- What will the next four to five years look like based on this decision?
Alternative option
In addition to the above, the company president has asked your team to do another set of analyses for his eyes ONLY. He wants your team to analyze if Emirates should start a new airline alliance of its own. As part of that analysis, he wants you to consider:
- If this approach is better than the other alternatives discussed above
- If yes, whether it is even feasible to start a new alliance and how to determine that
- Which other companies can be potential members of this new alliance and why
