Emirates Airline: Penetrating the North American Market

Emi rambles Airline is known for passage against received thinking when running its business. indeed far, this strategy has been profitable for the company. In November 2001, the air passage announced that it would begin a 13 ? non-stop flight from Dubai to New York starting in June of 2003. However a postponework forcet in the deli real of the Airbus A380-800 aircraft that would service the parvenue route has caused a delay. This willing be Emirates plan of attack at penetrating the North Ameri weed market. In the current policy-makingly supercharged climate there is debate as to whether or non it will be profitable to spread out service to this new route from Dubai to New York.Tensions between majuscule and the Arab world create restraints as to when Emirates will be able to expand service. However, the principal(prenominal) question currently facing Emirates is whether it should expand to New York at this point in time. Unlike umpteen otherwise airlines, Emirates s ees no threat surrounding the tensions in the mediate eastside. The climate has been this politically charged for the one-time(prenominal) ten years. In fact, during the first disconnection War in 1991, Emirates Airlines was the only airline that did not cancel any of its flights. They go on flying to Kuwait when a absolute majority of its competitors stop.Emirates continued business as plebeian and picked up additional business from those airlines that downsized and stopped flights in the role. This strategy exemplifies how Emirates has gone against conventional thinking and come out ahead. state of matter Risk Analysis nitty-gritty East Region Overview The Middle eastern area is characterized by economies that are over-dependent on anele however, they differ on size, wealth, and political agendas. A few of the key players in this region include Iran, Iraq, fall in Arab Emirates, Qatar, and Saudi-Arabian Arabia. Of these countries, the United Arab Emirates is quite c omparable in many aspects to its neighbors.The UAE and Qatar are not judge to vex from as much judicature imbalance in the threat of war as the other countries. Iran and Iraq, however, have had their share of political unrest, which has drastically affected their crude handles and prices. To assail these effects, Iraq has put pressure on the other OPEC countries to join on vegetable oil prices and decrease oil exports to the US and Great Britain. As a result, the gross domestic product of all Middle Eastern countries will decrease due to the clayey reliance of oil revenue enhancements in exports and as a percentage of gross domestic product.While oil is what makes these countries wealthy, the UAE, Saudi Arabia, and Qatar enjoy higher GDP per capita over Iraq because of their political situations. Dictatorial governments in Iraq allocate funds to programs that will not necessarily aid the country in the long-run. Literacy rates of Saudi Arabia, Qatar, Iran, and the UAE h ave change magnitude steadily over the past decade. This is more often than not owed to government beliefs that educated citizens will 3 augment the status of the country in all aspects. All five countries export to and import from similar countries including Japan, Italy, China and the US.The master(prenominal) export for these countries is oil and the chief(prenominal) imports are machinery and equipment, chemicals and food. United Arab Emirates The United Arab Emirates (UAE) is located in the Middle East between Oman and Saudi Arabia, bordering the Gulf of Oman and the Persian Gulf. The country is reasonably smaller than the state of Maine, which makes it a very small country within the Middle East region. The universe of the UAE is approximately 3,480,000 people. The literacy rate for the UAE is 79. 2% for the total population above 15 years.When categorized by sex, men and women have comparable literacy rates, a crotchet in the Middle East region. The population is predo minantly Muslim (96%), with the rest 4% of the population consists of Christians, Hindus and others. Although Arabic is the official nomenclature of the country, Persian, English, Hindi and Urdu are also spoken. The UAE is a federation state formed on December 2, 1971 and is composed of seven emirates. The emirates include in the UAE are Abu Dhabi, Dubai, Ajman, Fujairah, Sharjah, Ras AlKhaimah, and Umm Al-Qaiwain. antecedent to the formation of the federation state, the UAE existed as the Trucial States that belonged to the British for the previous 150 years. The Rulers and the British sign-language(a) a Perpetual Treaty of marine Truce in the 1850s that guarantees peace and safeguard from external threats. In exchange, the British had bespeak involvement in its hostile personal business and external defenses. When the British intended to except from the Gulf in 1968, the rulers of the seven emirates came in concert and formed the federation state with hopes to increase th eir role in global politics. sparing Environment United Arab Emirates economy is heavy dependent on oil production. Abu Dhabi is the largest producer, followed by Dubai, and to a much lesser extent, the remaining emirates. Although oils contribution to GDP has been declining in the past few years, government revenue and the non-oil economy continue to be heavily reliant. GDP for the year conclusion 2001 was 67. 6(US$bn) and 21,000(US$bn) per capita, and 70% of government revenue resulted from oil production. Fluctuations in oil prices impact the ontogenesis and volatility of the UAEs economy.The UAE is a fragment of the WTO, but has been slow to comply with its requirements for liberalizing trade and competition. The banking domain is closed to irrelevant investing and other ventures must be 51% owned by a local anesthetic partner. The exceptions to these rules are in free zones, where ascorbic acid% foreign ownership is permitted. The limitations on foreign direct investmen t deter the sue of economic diversification. Abu Dhabi is the most resistant to possibleness its economy, but it has pursued private sector involvement to improve infrastructure regarding water system and power.Dubai has chosen to focus its efforts on expanding its run sector by creating Dubai Internet metropolis (DIC) and Dubai Media City (DMC), which are free zones where investors can retain 100% ownership. Dubai also allows foreign investors to own property and purchase shares in UAE listed companies. The UAE typically runs a work out deficit, and the 2002 budget projects one of Dh2. 17bn. Federal spending is expected to increase by 2. 2%, and revenue is expected to grow by 3%. Abu Dhabi, Dubai and the UAE Central Bank are the main contributors to the federal budget.