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“Customer Satisfaction of Legacy carrier v/s Low cost
carriers”
(A comparative study with reference to customer satisfaction of Legacy carrier Emirates
Airlines versus Low cost carrier’s in UAE & recommendations for changes in the
operational strategy of Emirates airline)
SYNOPSIS FOR DISSERTATION TO BE SUBMITTED BY SPRING 2014
TO
WISDOM BUSINESS SCHOOL FZE
In partial fulfillment of the requirements for the award of the MBA Degree in Operations
Managment from Sikkim Manipal University, India
SUBMITTED BY:
Mr. Rakesh Shalikram Meshram
Roll number 1304001635, Operations Management
Under the Guidance of
Mr. Girish Nair
MBA, Finance, Post Box No: 686
Dubai
SUBMITTED TO
Project Coordinator,
Wisdom Business School,
RAKIA Free zone.

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INTRODUCTION
The aviation industry has reached a crossroad. While on one hand fuel and labour costs continue
to be key issues, the phenomenal growth in passenger traffic has created new opportunities for
growth. In this highly competitive industry, while operational efficiency helps reduce costs,
customer satisfaction is the key to market leadership and sustained profitability in the long term.
One of the key dimensions of competition in the aviation industry is unit cost. Quite simply, a
low unit cost is a competitive advantage as it allows airlines to be profitable at low fares. One of
the difficulties in comparing unit costs is that they vary according to average trip length.
In general, the cost of producing a seat-kilometre falls as average sector length increases since
the fixed costs are amortised over more seat-kms and variable costs such as fuel are more
efficiently consumed in longer flights.
Air transportation plays a substantial role in world economic activity, and society relies heavily
on the benefits associated with aviation. The aviation industry includes suppliers and operators of
aircraft, component manufacturers, fuel suppliers, airports, and air navigation service providers.
Its customers represent every sector of the world’s economy and every segment of the world’s
population.
The competitive nature of the aviation industry has become more intense in recent years. As the
competetiveness intensifies, the ability of the firms within the industry to withstand extended
periods of productive inefficiency diminishes. Economic theory clearly establishes the
importance of measuring efficiency in the aviation industry. Those firms with lower level of
efficiency are likely to feel the impact of economic dynamics more severly. The concept of
efficiency here is the capability of a unit in utilizing input to produce output. In the context of
airline, units assessed are “services” and the output produced are “customer satisfaction” which
also impacts the sales and growth of the carrier.

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COMPANY PROFILE
Emirates is the international airline of the United Arab Emirates. Its main activity is the
provision of commercial air transportation services. On 25th October 1985, Emirates flew its
first routes out of Dubai with just two aircraft a leased Boeing 737 and an Airbus 300 B4. Then
as now, the goal was quality, not quantity, and in the years since taking those first small steps
onto the regional travel scene, Emirates has evolved into a globally influential travel and tourism
conglomerate known the world over their commitment to the highest standards of quality in
every aspect of business.
With a fleet of more than 232 aircraft, Emirates currently fly to over 147 destinations in more
than 80 countries across six continents from its hub in Dubai and their network is expanding
constantly. Over 1,500 Emirates flights depart Dubai each week on their way to destinations on
six continents. In recent years, Emirates has made numerous significant announcements
regarding the future of its already state-of-the-art fleet. It has a particularly strong presence in the
South and Southeast Asian region, which together connect Dubai with more international
destinations in the region than any other Middle Eastern airline. The countries with the largest
number of airports served by Emirates are India with 10, United States with 9, the United
Kingdom with 6, Australia and Pakistan with 5. Their services includes Aircraft operations
(passenger), Aircraft operations (sky cargo), Emirates airport services, Emirates flight catering,
Emirates destination and leisure management, Emirates hotels and Emirates global call centers.
UAE’s aviation sector is soaring high. Most of its airline companies are experiencing robust
growth and are rapidly extending their routes and fleet size. It could be safely assumed that
UAE’s overall aviation sector is driven by its favorable geographic location, mounting tourist
inflow and government backed economic model, which strongly emphasizes on aviation sector.
Not to forget, the hospitality sector as well.
Situated on the crossroads of East and West, UAE’s aviation sector has diverse components. At
one end, it has high end carriers such as Emirates and Etihad with their extensive global network;

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on the other hand it has efficient and successful short haul budget airlines such as Air Arabia and
Fly Dubai.
In the 1st half of 2000, aviation in UAE witnessed a new change with Air Arabia, the 1st ever
UAE low cost carriers making an entry. There were apprehensions as low cost carriers was a
relatively newer concept. Nevertheless, Sharjah’s flagship carrier (It is now RAK’s official
airline as well), which also happens to be publicly listed, has been a profitable venture since its
inception.
INDUSTRY PROFILE
The UAE carriers are consistently recognized for their innovative andcutting edge developments,
while maintaining an enviable safety record. In addition to their fleet and network
expansion,UAE carriers continue their march towards growth with significant improvements in
their business strategy, joining hands with some of the major airlines either through acquisition
of stakes or code sharing. Whilst Emirates hassigned a 10-year partnership deal with Qantas,
Etihad is aiming to extend its international partnerships by entering into code-share agreements
and purchasing minority shares in airlines from countries stretching from Germany to Australia.
Other UAE carriers, suchas Air Arabia and Fly Dubai are also looking at continuous expansion
and growth plans.
This study is targeting to find out the service efficiency and customer satisfaction between legacy
carrier Emirates Airlines and other low cost carrier in the UAE by ……………….. for the last 2
years and the low cost carriers has become reasonably popular here due to the marketing efforts
and activities of the company.
This study helps to review the myths of UAE operating carriers, & explores the concepts &
models of airline functioning. It provides empirical evidence of convergence and divergence in
passenger behavior and covers various psychological & sociological aspects that contribute in
opting decision-making process with relate to choosing airlines.

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The study focuses on level of satisfaction of passengers that helps airlines to improve their
operating or service provide strategies with better understanding of the passengers expectations
and needs. The study is conducted by exploring the following issue:
 The philosophy of how legacy carrier Emirates airlines operates and select
different strategies as compared to the low cost carrier service’s under study (e.g.
airlines, products)
 The psychological behavior of consumers while taking decisions in selecting
efficient airline.
 The Environmental factors responsible for making customer to choose airline in
terms of cost, service facility and security concerned.
 How consumer motivation & decision strategies differ between airlines that
differ in their level of importance or interest that they entail for choosing.

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PROBLEM IDENTIFICATION AND DEVELOPMENT
The brand under study Emirates Airlines has been operating during the last 29 years consistently
with an impeccable track record of sales as compared to the similar brands in the international
market. Emirates business model is the business model that lies at the heart of Emirates
commercial success. Its main ingredients are a lean workforce comparable to a low cost carrier
and a flat organizational structure that allows the airline to maintain low over head costs.
Emirates has got a up-brand reputation due to the marketing strategy adopted by the company in
developing a blueprint for customer service and capturing the customer expectation as per
changes happening from time to time. But of late, it is found that the airline has been losing its
brand loyalty and brand attractiveness due to various factors which is unknown to the company
so far. So the issue under study is to capture the real reasons for losing the brand equity by the
company in this market and understand the intricancies of changes that has been taking place in
the expectations of the customer.
The problem development area is focused on customer satisfaction which is the study of
individual passengers, travel agencies, business travelers and the processes legacy carrier and
low cost carrier use to adopt strategy to satisfy passeneger needs. In all there are number of
reasons why passengers should be able to look forward to flying longer for less. UAE carrier’s
big draw back is as they cant operate domestic sectors hence target sectors are mainly
international market. Market and environmental factors affecting sustainability of Emirates
airlines and this is clear opportunity for airlines to generate additional revenue through providing
airport transfer services for its passengers at a reduced cost also match up the competitive fares
which low cost carriers provide by reducing or adopting “no frill” policy. Out of number of
aircrafts operates to specific city from which few lower capacity aircrafts can be operated
targeting low profile passengers this way emirates can reduce their maintaine cost attract new
customers retaining the existing one’s. In short , we may say that the whether it is in Arab World,
US, Europe, Asia or Africa for passengers or any organization cost is the prime concern. From
passengers perspective value for money is when they get a cheap flight ticket at a convienent
time to reach their destination. This study is an effort to elicit information about customer
satisfaction by systematically approaching the problem under study.

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OBJECTIVE AND SCOPE OF STUDY
Objectives of the study:
 To perform a comparative analysis of operational efficiency of Emirates airlines
as compared to other Low cost carriers.
 To study whether there is a significant difference between the customer
satisfaction level of Emirates airline and that of Low cost carriers.
 To study the demographic and behavioral attitude of travelers while choosing
airline for travel.
 To suggest the operational strategies to improve the sales performance of
Emirates airlines.
.
Importance & Scope of the study:
In view of the changes taking place in the aviation industry, it is important to identify the
characteristics of various category passengers using airlines with different product elements.
Both legacy carrier and Low cost carriers should find the outcome of such effort useful to
enhance their understanding of their market segments and, accordingly, develop products to
effectively serve the needs of each segment. The study is conducted for the customer satisfaction
level with regard to selection of Emirates airline reputed brand in the avaiation industry from
UAE. Emirates as a group has wide range of products available in the tourism industry for large
segment of customers and plays an extensive role in the boosting of UAE economy. The scope of
the study is to analyze the different problems faced by the airline industry in the current
competitive market, and to identify and prevent defects in service related process to anticipate,
achieve or exceed customer satisfaction.
But my present study is restricted to operational service efficiency and customer satisfaction of
legacy carrier Emirates airline versus low cost carrier primarily with a time focus of the
performance of the brand for the last few years based on the secondary data recorded in the
system coupled with the primary data collected from various sources about the current issue.

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Since the study is limited to the current issues mainly, the cost factor is negligible as compared to
the benefit that we expect from the study.
HYPOTHESIS FORMULATION
In exploring the difference between customer satisfaction level in legacy carrier of Emirates
airlines to that of other low cost carriers, the study will examine demographic and behavioral
similarities and differences between two samples of business travelers, one using low cost
carrier and other using legacy carrier Emirates airline which represent two distinct market
segment. Following is the hypothesis for objective - To study whether there is a significant
difference between the customers satisfaction level of Emirates airline and that of Low cost
carriers.
 Null Hypothesis (Ho) – There is no significant difference between the customer’s
satisfaction level of Emirates airline and that of low cost carrier.
 Alternative Hypothesis (H1) - There is significant difference between the customer’s
satisfaction level of Emirates airline and that of low cost carrier.
UNIVERSE AND SAMPLING METHOD
My study is based on a research design that consists of developing a questionnaire comprises of 10 to 15
questions to the selected passengers, questions each to the business passengers, leisure travelers,
passengers with low income, high profile passengers and travel agents etc. The total universe is
comprised of all categories of passengers in Dubai specifically and UAE in general.
In the sampling method, I will be selecting a sample size of approximate 50 passengers
representative sample and find out the average. Sample unit will be combination of various
category travelers i.e business passengers, leisure travelers, lowincome expatriates and travel
agents.

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For this project the research instruments used for this survey were structured questionnaires. The
questionnaires were designed to find the operationa; efficiency level and customer satisfaction
level of Airline industry in U.A.E. The samples taken from the whole population is around 50
from various groups that comprises of various categories of air travelers.
DATA COLLECTION
Collection of data is the 1st
and the most important part of a statistical inquiry with intention of
finding out an organizational problem. The process of systematically recording the results
obtained after an investigation is called as collection of data which is the most important part of a
study as the entire study and its interpretation depends upon the data that we collect. My
objective is to study about the real problem that my department is confronting now and hence, I
intend to collect data from primary sources which will be supported by data from secondary
sources that is available from various sources. From these data, the statistical analysis will be
done after proper classisficiation, coding and tabulation.
SOURCES OF DATA
There are different sources of collection of data for my study in question. For deciding the
sources of data, I have considered the purpose for inquiry and found that the following are the
broad sources of data:
a. Primary Data
b. Secondary Data
a. Primary Data
Primary data relates to data which has been collected first hand and which has been collected for
the purpose of analysis. It is undertaken, when data needed by the researcher does not exist, or
are dated inaccurate, incomplete or unreliable, the researcher has to collect primary data. The
primary data was collected through questionnaires.

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Sources of Primary Data - Primary data was collected through
 Various category customers (business travelers, leisure travelers etc).
 Travel agents.
Methods of Collecting Primary Data:
 Direct Personal Investigation i.e. Interview Method:
Under this method, I intend to collect data personally by directly interviewing various
category passengers like business travelers, leisure travelers, income category expatriates,
travel agents, expert opinion from airline employees. Data will be collected by asking
questions relating to the inquiry.
 Indirect Oral Investigation
Under this method, I does not collect the information directly, instead I got them
indirectly, through various departments airline experts, product marketing professionals,
ex employees of organization who know the information and who are ready to part away
with the information they posses. This method issued in those cases were either direct
contact is not possible or were the information to be collected are in the nature of
complex one.
 Information Through Mailed Questionnaire:
Under this method, the structured questionnaire drafted by me with the intention of
collecting the data will be mailed to the respondents wherever I am assured that the reply
will be there and in those cases, response cannot be expected, I intend to contact them
directly with the questionnaire.

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b. Secondary Data
Secondary research invariably precedes primary research. These are the data that were collected
for another purpose and already exist somewhere.
Sources of Secondary data –
 In house magazines of Emirates airline like Safar.
 Organisational intranet website.
 Internet website.
 Brouchers, magazines.
 Annual financial and sales report’s
DATA ANALYSIS
Analysis of data is a process of raw data that has been collected must be refined and
structured in such a format that can be lead itself to staifactory level. The collected data
will be inspected, edited coded and transformed. The process will start by validating the
measuring instrument which could be questionnaire or any other primary technique. Data
analysis has multiple facets and approaches, encompassing diverse techniques under a
variety of names, in different business, science, and social science domains.
Based on my defined objectives in my study, I will proceed with the following systematic
ways to analyze the data that I have collected through primary sources and recorded from
secondary sources. The data collected through primary source will be assessed by
assimiliating the data with the secondary soruces. The data analysis is done as per the
following procedure:

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a. Measurent Phase - Classification, Tabulation and Codification
As per my first descriptive objective “perform a comparative analysis of operational
efficiency of Emirates airlines as compared to other low cost carrier”. On the basis
of quantitative and qualitative data analysis I will be using the statistical tool of
classification, tabulation and codification to derive operational efficiency segment under
study. All the statistical techniques will be applied to codify the data as per my
requirements.
b. Analyzing Phase - Pareto Analysis
As per my third objective “To study the demographic and behavioral attitude of
travelers while choosing airline for travel” I will be using Pareto Analysis of 80:20
principle on the data collected from the questionnaires, namely complaints,
information updates, ground services etc. I will find out the factors while choosing
airline for travel by the customer. Pareto Analysis is used to focus problem solving
activities, so that areas creating most of the issues and difficulties are addressed first.
c. Imrovement Phase - Standard Deviation
I will be using standard deviation for analyzing from the bell curve that the results of
questionairres submitted to customers and travel agents, complaints about air fares,
target audiences and problem’s in the availability of seats should be minimized
inorder to increase sales..
d. Control Phase – Gap Analysis (SWOT analysis)
With regard to my fourth objective “To suggest the operational strategies to improve
the sales performance of Emirates airlines” I will be performing Gap analysis to find
from questionnaire, survey and group discussion, the comparision of various factors
responsible to compete with low cost carrier in order to improve own product.

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CONCLUSION
Air transportation has seen a tremendous changes in the last few years. Air travel is just a
glorified luxurious travel indeed, flying as comfortable and fast way of travel has lost much of its
glamour from the past. Where as air travel was a high price privilege for the upper classes during
most of the last century, globalization has led to an increased need for affordable and fast world-
wide passenger transport. Leading network airline such as Emirates and Ethihad now more
actively stress service quality, reliability, business lounges, frequent flyer programmes and direct
link with other airlines and prestigious hotels in their promotion programmes. LCCs continue to
build their image as a much-needed service in the region to meet the travel needs of common
people looking for cheap, no frill travel. With rapid growth in the market share of LCCs, most
airlines in the GCC region must carefully delineate their market segments to gain competitive
advantage with specific travel packages.
With respect to my research subject “customer satisfaction level of legacy carrier versus low cost
carrier” the topic chosen is to understand the satisfaction level regarding selecting the carrier.
UAE a land of opportunity and 90 percent population comes from various countries as a
expatriates which creates a wide range of scope for airline industry to grow. During last few
years it has been seen remarkable growth in low cost carriers and their strategy of targeting low
profile expatriates. However things has changed now, cost is the primary concern for each one of
us. Hence cost factor has changed the behavioral attitude of passengers while taking decision on
selecting airlines and due to this legacy carriers like Emirates airlines impacting much. Though
the emirates airlines vision is broad and concentrating on long haul international sectors we
cannot ignore short haul sectors and passengers behavioral attitude and satisfaction level.
This study helps for further improvement and development of the product, attracting more
customers and also enables the companies, to find out the satisfaction level of the customers.
………………………………….