Project Warfare in the High Skies

The UAE Government The Unites Arab Emirates (UAE) is a perfect example of the transformational power of politics in the management of a country. The country was a sleepy corner of the Gulf barely a century ago. Its current international profile is the result of efforts undertaken in the last forty years.Advertising We will write a custom essay sample on Project: Warfare in the High Skies specifically for you for only $16.05 $11/page Learn More For a country that received independence in 1971, UAE is an example of how a country can come from backwardness to become a strategic business location (Mongay 14). The location of the country is strategic. It is possible to reach any corner of the globe from the UAE because of its central location at the relative geographical center of the continents. From the UAE, it is possible to access any of the continents in one plane (IATA). Apart from the well-known economic feats of the UAE, the country has a unique polit ical system. The country is under the leadership of seven hereditary Emirs who are each in charge of an Emirate. The Emirs sit in a council that appoints a cabinet and other government officials. One of the Emirs serves as the president of the country. Each Emir retains complete political control over his Emirate, and is in charge of all major decisions regarding the management of the Emirate. The aim of this paper is to explore various aspects of the political system of the UAE. What is the UAE? The UAE is a loose federation of seven Emirates. The use of the word â€Å"loose† in this statement does not mean disjointed or dysfunctional. It simply means that each of the Emirates retains the power to govern itself. However, the Emirates are all signatories to a 1971 constitution developed to solve the crisis caused by the exit of the British, who served as the protectors of the Emirates. The UAE was not under British rule as a colony. The British signed pacts with local Sheikhs who were rulers of the Emirates to offer them protection at sea, and to offer support in case of land attacks. The British took on this role to protect its interests in the sea trade through the Gulf. Britain had strong trade ties with India and other Asian countries. These ties depended on the ability of the British to use ports in the Persian Gulf as bases for the British Navy and docking points for trading vessels. On the other hand, the Emirates also traded with India and other Persian Gulf states. In the nineteenth century and the first half of the twentieth century, the Emirates exported pearls to other countries through the Gulf. This explains why the Sheikhs that were ruling the Gulf signed treaties with Britain.Advertising Looking for essay on government? Let's see if we can help you! Get your first paper with 15% OFF Learn More In the late sixties, the British realized that their treaties with the rulers of the Gulf were no longer tenable. This came in part from the fact that Britain had lost several colonies in the region. Bahrain and Qatar gained their independence in 1971 (Mongay 18). In the same year, the British withdrew from the gulf treaties. Attempts to create a proper nation out of the seven Emirates failed because of the divergent needs of each region. Therefore, the rulers in charge of Abu Dhabi and Dubai chose to create a union between their two jurisdictions. They made a constitution in 1971 and later invited the other rulers to join the Union. Within one year, the seven regions became the United Arab Emirates. How the UAE Government Works The UAE is a federal state. This federation is the result of the 1971 constitution promulgated by the rulers of the region. Each of the seven Emirates retains authority to run the affairs within its region, under the direction of the Emir. The seven Emirates are Dubai, Abu Dhabi, Ajman, Fujairah, Ras al-Khaimah, Umm al-Qaiwain, and Sharjah. Each Emir is the leader of one of the Emirates. The office of the Emir is hereditary. The fact that the position of the Emir follows bloodlines, and an Emir has total control over the Emirate makes the Emirs absolute monarchs (Walker, Walker and Schmitz 45). The UAE government has three organs. It has an executive, a legislature, and a judiciary. The members of the executive arm of UAE’s government are the president, vice president and the prime minister. The vice president traditionally holds the office of the prime minister too. Other offices in the executive arm are the Supreme Council of Ministers and the Federal Supreme Council. The high number of functionaries in UAE’s executive is deceptive. The Federal Supreme Council consists of the seven Emirs. The council elects the president, vice president and the prime minister from among the seven Emirs. In addition, the council appoints the council of ministers. The ministers run state functions across the seven Emirates. These functions include provision of educati on, health, security, and trade. The Federal Supreme Council is the supreme authority in the management of the affairs of the UAE. Ministers carry out their duties at the pleasure of the Federal Supreme Council. The judiciary in the UAE is fragmented. Each Emirate runs a regional judicial system based on local laws. While a Federal court exists, not all Emirates are part of the national judiciary.Advertising We will write a custom essay sample on Project: Warfare in the High Skies specifically for you for only $16.05 $11/page Learn More The third arm of government is the legislature. The official title of the forty-member legislature in the UAE is the Federal National Council. Unlike western democracies where citizens elect the legislature, the system in the UAE is such that membership in the legislature may arise from elections or from appointment by the Federal Supreme Council. Initially, the Federal Supreme Council appointed all the members of the Fe deral National Council. However, the council currently appoints about half of the members. The rest become members of the Federal National Council through elections. The Federal Supreme Council is implementing democratic legislative reforms in the UAE gradually. The council hopes to transit the country slowly to a fully elected and more powerful legislature. This position comes from the lessons gleaned from the Arab spring about the negative impacts of rapid change, or absence of change. The council feels that there is not room for error, hence the cautious approach. The legislature in UAE plays an advisory role, the Federal Supreme Council develops the laws used in the country, which the Legislature debates and offers an advisory opinion. The President of the UAE The presidency of the UAE is an elective office. However, eligibility for election is dependent on membership to the Federal Supreme Council. Membership of the Federal Supreme Council is hereditary, which makes the preside ncy hereditary. According the UAE constitution, one of the Emirs serves as the country’s president. A president can serve any number of five-year terms. The president serves as the head of state. In this role, he chairs the Federal Supreme Council, signs treaties and appointments state officers. Other duties performed by the president include the appointment of diplomats, and representing the country in international forums. The president also coordinates the activities of the Federal Supreme Council such as calling meetings and chairing meetings. In addition, the president issues state commendations on behalf of the country. The most influential Emirate in the UAE is Dubai. As such, its Emir became the first president. When he died, his son took over the post as the new Emir of Dubai. The second most influential Emirate is Abu Dhabi. Abu Dhabi is the financial capital of the UAE. Therefore, Abu Dhabi’s Emir serves as the prime minister of the UAE.Advertising Looking for essay on government? Let's see if we can help you! Get your first paper with 15% OFF Learn More The Judiciary The judiciary of the UAE is a completely independent constitutional organ. The judicial system in the UAE is not homogenous. Each of the Emirates maintains a separate judicial system based on local customs (Griffiths, O’Callaghan and Roach 73). The local laws are the product of each region’s unique identity and history. The sources of law for the Emirates are the Quran based Sharia, and laws developed by local authorities within each Emirate to deal with civilian issues. The use of Sharia law does not make the UAE an Islamic republic. The Federal Supreme Council is sensitive to the difficulties of absolute Sharia. They prefer a more open judicial system. This explains why many foreigners find the UAE accommodating. In the same vein, the UAE is the most liberal region in the Arab world because of the effort of the Emirs to maintain a degree of religious freedom. Apart from the local laws, federal laws also exist to provide direction for the entire country. These laws come from the Federal Supreme Council and form part of the legal environment of the Emirates. The federal laws govern aspects such as international relations, federal crimes, and disputes involving more than one Emir. The federal judiciary also tries federal crimes such as corruption by federal officials. The judges of the federal courts are appointees of the President in consultation with the Federal Supreme Council. UAE’s Sources of Income The UAE was traditionally a trading region. Before the discovery of oil, the UAE exported pearls to India and the rest of Asia. The trade in pearls collapsed after India increased the taxes on imported pearls to protect its domestic pearl industry. At the same time, the Japanese started producing commercial pearls, flooding the international market with cultivated pearls. As a result, Pearl exports from the UAE declined. The main source of income for the UAE is exports of natural resources. The World Bank estimated that in 201 1, 85% of exports from the country were natural resources (UNWTO 4). The UAE holds huge oil and gas reserves. In fact, the current economy of the region came up because of oil and natural gas exports. Oil will remain a prominent source of income for the UAE because of the increasing demand and dwindling supply. As the world nears its peak production of oil before the commencement of an irreversible decline in reserves, the price of oil will keep increasing until the balance tips in the favor of other energy sources. Apart from the natural resources exported by the UAE, the country receives revenues from tourism, and trade. Dubai is known for its vehicle refurbishment business especially with the developing world. The location of the region makes it an ideal air and sea transport hub. The Emirates Airlines will become the world’s largest airline by the year 2015 if it sticks to its current growth trajectory (IATA). At the same time, its rival airline, Etihad Airlines is a well -known international brand. These two airlines are symbols of the UAE’s dream of becoming a transport hub for the world. Dubai may replace Heathrow as the hub connecting the Western hemisphere to the rest of the world (IATA). This demonstrates the business acumen of UAE’s leadership. These efforts are part of a deliberate strategy to move the country from the traditional reliance on oil and natural gas to other sectors. Abu Dhabi is also becoming an important financial destination in Asia and Middle East (Deloitte 6). This comes from the effect of a high volume of goods and services passing through the UAE in transit to other parts of the world. Major Banks have branches in the UAE to facilitate the activities of international investors in the UAE. The UAE is also investing in other parts of the world. For instance, the Etihad Airlines is a shareholder in Virgin Australia and Air Berlin as part of its divestiture strategy (IATA). This is symbolic of the greater efforts by the UAE government and the UAE business community to spread risks to other parts of the world. As the natural resources dwindle, the region will have other sources of income. Abu Dhabi suffered immensely from the economic downturn of 2009. While this is negative when viewed from the perspective of revenue generation, it is a positive indication of the fact that Abu Dhabi is an influential player in the global financial markets. One of the highest growth sectors in the UAE is tourism. The country is investing in facilities that can attract tourists in order to increase the regions foreign exchange (UNWTO 4). The Burj Hotel for instance is one of the most expensive hotels in the world. The hotel is a very good source of tourist revenue. It attracts the affluent members of the international community who want to experience its ambience. In addition, it attracts many more tourists who simply want to have a look at it. The creation of man-made islands and theme parks such as Dubailan d city (modeled after Disneyland), demonstrates the country’s long-term commitment to tourism. Relationship between the Citizens and the Government of the UAE It is difficult to render an opinion on the relationship between the citizens of the UAE and their government. This is because the government does not tolerate dissenters. The UAE government is not totalitarian, but it is not open to public criticism either. In essence, the only way to understand the actual feelings of the people towards the UAE government is by looking at the actions of the government. One of the important clues in this matter is the Arab spring. Many citizens in Arab countries that were under totalitarian regimes took advantage of the wave of dissent that swept across many Arab states to change their governments. The UAE was not part of those countries. By inference, this may mean that the citizens of the UAE were not angry with the state authorities like other Arab Countries. This can mean that the c itizens have confidence in their government. Secondly, the UAE government is allowing democratic elections for choosing some members of the Federal National Council. The actual people eligible for office are very few, and the people eligible to participate as voters are few as well. It is still important to note that this opportunity does not exist in some countries. This also shows that the government is aware of the desire for democratic expression by the people. Politics in the UAE The political space in the UAE by democratic standards remains limited. There is no clear way for an ordinary citizen to become a leader in the country. The Federal Supreme Council fills most of the important positions in the country by appointing close relatives and confidants. Within the Emirates, the leaders come from the immediate family and close associates of the Emir. The UAE does not have an active civil society. The UAE Human Rights Association and the UAE jurists association are exceptions in the political climate of the region. However, the two organizations are not powerful enough to question the state on issues. This fact, coupled with stringent rules governing the freedom of association, shows that the UAE is still lagging behind in the path to democracy. Another factor that may be contributing to the pacified political environment is that the UAE has more immigrants than locals because the country needs foreign workers to run its economy. Immigrant workers are not politically active. Therefore, their impact on UAE’s politics is minimal. However, these workers are a crucial source of information for UAE residents regarding democratic processes. In this sense, immigrant workers may be the catalyst that will precipitate an increasing demand for political space by UAE citizens. The history of the people of the UAE predisposes them to accepting the current government the way it is. The traditional mode of leadership for Arab countries was by hereditary chiefdoms. This fact makes the citizens favorably disposed towards the existing type of leadership. This leadership reflects the traditions of the people within their cultural context. Amidst all the political issues raised above, the people of the UAE seem generally content with the political system in the country. The country is one of the richest nations in the Arab world. The living standards are very high and in some metrics, the region compares favorably with the developed world. For instance, the UAE has the lowest mortality rates in the world on many counts such as infant mortality and maternal mortality (Deloitte 4). Conclusion The UAE is in a good position to look at the future with optimism in its governance. Western political thought favors democracy over any other type of leadership. In the UAE, democracy is foreign and it is beyond the experience of the average UAE citizen. For as long as the citizens of the Emirates are content with their government, the leaders can carry on ru ling in the traditional fashion. However, there is need to expand the participation of citizens in the election of leaders and in the affairs of government. In a world where democracy is becoming the dominant force, failure by the Emirs to recognize the desire for democracy by UAE citizens can lead to sudden upheavals as was the case in North Africa. The UAE remains an interesting case in the study of economic transformation, and in the journey from oil dependence to sustainable economics. The country needs to include elements of political change to support its emerging role as the hub of the world. Otherwise, there is risk that it will lose its trajectory courtesy of internal unrest. Works Cited Deloitte. 2011 Survey of the UAE Healthcare Sector Opportunities and Challenges for Private Providers. Survey Report. London: Deloitte, 2011.Print. Griffiths, Martin, Terry O’Callaghan and Steven C Roach. International Relations: The Key Concepts. London: Taylor and Francis, 2008. Pr int IATA. â€Å"CEO Interview: Etihad – Staying Focused.† 28 October 2012. Web. Airlines International: IATA. 30 October 2012 https://www.iata.org/pages/default.aspx. Mongay, Jorge. Business and Investments in Asia. Madrid: ESIC Editorial, 2011. Print UNWTO. Tourism and Climate Change. Geneva: United Nations World Tourism Organization, 2011. Print. Walker, Danielle Medina, Thomas D Walker and Joerg Thomas Schmitz. Doing Business Internationally: The Guide to Cross-Cultural Success. New York, NY: McGraw-Hill Professional, 2003. Print This essay on Project: Warfare in the High Skies was written and submitted by user Piper V. to help you with your own studies. You are free to use it for research and reference purposes in order to write your own paper; however, you must cite it accordingly. You can donate your paper here. Project Warfare in the High Skies The rivalry between Etihad Airways and Emirates Airlines is the subject of many debates. This is because of the cutthroat competition between the two companies. This competition exists despite significant differences in the business strategies of the two companies. This project seeks to investigate the nature and impact of this rivalry. The research question guiding the project is, â€Å"What are the marketing strategies of Etihad Airways and Emirates Airlines and how do these strategies influence the rivalry between them?†Advertising We will write a custom term paper sample on Project: Warfare in the High Skies specifically for you for only $16.05 $11/page Learn More The major components of this question are the need to decipher the market entry models used by both airlines, an interrogation of the elements that define the rivalry between the two airlines, and a peek into the future of the two airlines based on their current marketing models. The se issues define the broad objectives that underpin the research project. In particular, the objectives of this project as stated in the project proposal are as follows. To investigate the market entry models of Etihad Airways and the Emirates Airlines. To investigate the defining elements and the implications of the rivalry between the Etihad Airways and the Emirates Airlines To determine the long term prospects of the two airlines in relation to their existing marketing strategies in the context of their rivalry Literature Review A look into the definition of the term â€Å"marketing strategy† reveals several things. First, a marketing strategy is about marketing (Sahaf, 2008). A marketing strategy is specific to the marketing elements of a business concern. Secondly, a marketing strategy is about strategy (Sahaf, 2008). It is a long term and wholesome look at the way an organization organizes all the elements that constitute its marketing activities (Shaw, 2004). Thirdly , marketing strategy is about the optimization of resources (Sahaf, 2008). Every business has several options relating to how it can deploy its resources. Each of these configurations seeks to optimize the returns that the business can attain from its marketing resources (Mongay, 2011). Fourth, marketing strategy is about profit (Sahaf, 2008). Every organization needs to generate surplus for it to remain competitive. Marketing is what assures the company of a sustainable revenue stream. Porter (1980) developed a model that helps an organization to evaluate its competitive position. This model is useful for companies planning to enter a new market, or to expand its market share. The model is also valuable for companies whose market share is dwindling. The five forces analysis looks at the threat posed by the arrival of new competitors, the threat posed by the arrival and availability of products that can substitute a company’s product, and the bargaining power of customers (Po rter, 1980). The model also proposes that an ideal analysis of the competitive environment should consider the power of suppliers, and the pressure from rivals in the market (Porter, 1980). Montgomery and Porter (1991) identified three forms of generic strategies that should guide the development of market strategies. First, a company can choose to pursue cost leadership as a marketing strategy (Montgomery Porter, 1991).Advertising Looking for term paper on international relations? Let's see if we can help you! Get your first paper with 15% OFF Learn More Under this strategy, a company seeks to use economies of scale and efficiency to drive prices down to levels where its competitors cannot survive. Southwest Airlines made its mark on the American market as a low cost carrier by removing all frills from its services to focus on efficient operations (Hartley, 2007). It is a good example of the application of this principle in the airline industry. Secondly a company ca n choose to pursue is a differentiation strategy (Montgomery Porter, 1991). Under this strategy, a company must have a strong point that gives it an unassailable competitive advantage. This strength should provide customers with a unique value. A good example of this strategy is Google’s search engine. Google developed a search engine, which is now the leading provider of search services online (Byrne, 2011). Google differentiates itself as a provider of online software services. The third strategy identified by Montgomery and Porter (1991) is niche strategy. This marketing strategy involves identifying a unique market segment and becoming the best-placed company to meet the needs of this niche. This strategy is risky if bigger competitors can meet the demands of the same niche at a lower cost. In reality, most companies pursue a mixture of strategies in order to maximize their returns (Sahaf, 2008). While marketing strategies have a long-term perspective, they often change midstream to address strategic concerns such as the making of losses over a prolonged period. Market research is necessary before the development of a market strategy (Thomas, 2011). Failure to research the market can lead to huge losses caused by wrong marketing strategies. Marketing strategy is also about the interaction of the four P’s of marketing. The four P’s represent Product, Price, Placement, and Promotion (Mongay, 2011). Product refers to the item or service that is available for sale. Price is the consideration expected from exchanging this item or service. Costing strategies depend on whether the item is available in bulk, or in single units. Typically, the cost of an item needs to cover the cost of production, and the expected margin. Promotion refers to the efforts made to make consumers of the product aware of its presence. At the same time, promotion aims at building demand for the product by highlighting the aspects of the product that can appeal to po tential buyers. The fourth P is Placement. Placement refers to the availability of the product to the potential buyers. Elements of placement include the distribution plan, display at the point of sale, and the use of showrooms.Advertising We will write a custom term paper sample on Project: Warfare in the High Skies specifically for you for only $16.05 $11/page Learn More Methodology This project utilized three main sources of data. The use of secondary data proved useful because of the international nature of the entities studied (Corson, Heath, Bryant, 2000). The objectives of the research project required broad based information to cover the subject adequately. As such, there was a need to review literature from various sources to develop a comprehensive picture describing the rivalry between the two companies. The reason for relying on secondary data came from the objectives of the project. It was not feasible to address the objectives of the proj ect by collecting primary data. Analysis of secondary data required the use of careful scrutiny to find out credible and consistent information (Yu, 1998). In order to establish the validity and admissibility of the information collected, a literature review was necessary to find out the specifications of the information required (Corson, Heath, Bryant, 2000). Data from industry sources was the most valuable type of information for the project. Recorded interviews with the executives of the company and company reports also formed sources of credible information. Information from unnamed sources did not meet these standards. In addition, information from personal blogs, personal websites that had no peer review mechanisms did not meet the threshold (Johnson Johnson, 2009). The most important difficulty faced in the course of the project was finding the latest information relating to developments in the UAE airline industry. It was necessary to find the dates of the information prov ided to ensure the accuracy of the information collected. Online forums proved useful as passive sources of information on customer satisfaction. Forums hosted by the two companies, and those dedicated to issues relating to the two companies proved useful in gauging the customer satisfaction levels of customers. They also illustrated the depth of the rivalry of the two companies. The main sources of data used for the project were as follows. Published literature from trade magazines relating to the operations of the two companies, company reports and publications from the two airlines, and periodicals published by marketing analysts and aviation analysts. The Market Entry Strategies of Etihad Airways and Emirates Airlines In order to examine the market entry strategies of Etihad Airways and Emirates Airlines, it is important to define the use of the terms â€Å"market entry† in this section. The meaning of market entry used in this project is that of an ongoing process. When companies start, they need a market entry strategy. This need does not dissipate with growth. Rather, as the company expands its services and its customer base, market entry remains a fundamental function (Thomas, 2011).Advertising Looking for term paper on international relations? Let's see if we can help you! Get your first paper with 15% OFF Learn More Etihad Airways is much younger than Emirates Airlines. Etihad will celebrate its tenth birthday in 2013 (Cameron, 2012). Both airlines are pursuing very aggressive market entry strategies based on the prevailing economic outlook of the Gulf region. Some of the elements of the rivalry between the two airlines in relation to their market entry strategies include the acquisition of new aircraft, and the formation of partnerships with airlines in other regions of the world (Cameron, 2012). Etihad Airways will start operations in Washington DC, Ho Chi Min City and to the City of Sao Paulo in South America within 2013 (IATA, 2012). In the same year, the company will receive 14 aircrafts to expand its fleet (IATA, 2012). The company plans to expand its fleet by ninety new aircrafts. In addition to these efforts, Etihad Airways is pursuing relationships with Air Berlin in Germany and Virgin Australia to increase its profits (Cameron, 2012). Part of Etihad Airway’s attraction to Air B erlin came from the fact that the two companies have similar cabin design, which will enhance both brands. Emirates Airlines on the other hand is pursuing similar expansion by forming alliances with other airlines. Currently there is a relationship between Emirates and Qantas from Australia (Cameron, 2012). Emirates Airlines, which vowed not to join any of the big three airline alliances, has pacts with airlines that are part of the alliances. For instance, Etihad has a pact with Air France-KLM, which is part of the Sky Team alliance (IATA, 2012). The alliances are business relationships between several airlines, which work to coordinate their schedules in order to enjoy better customer loyalty. The airlines share frequent flier programs, and other incentives meant to keep customers within the alliance. Based on Porter’s generic marketing strategies, the two airlines positioned themselves as niche players offering premium services. The target market for the airlines is the hi gh-end segment. This strategy, combined with the strategic location of the two airlines in the fast growing region of the Middle East, is responsible for the growth that the two companies continue to experience despite their bitter rivalry. Emirates Airlines will become the largest Airline in the world by 2015 if it maintains its current growth momentum (Thomas, 2011). Defining Elements and the Implications of the Rivalry The scope of the rivalry between the two airlines comes from the similarity of their marketing strategies. Both airlines compete for the high-end market. Therefore, most of the marketing initiatives they employ tend to be similar. For instance, both airlines landed in Japan for the first time on the same day (Wright Underwood, 2010). This illustrates the intricate nature of their rivalry. In the last decade, many airlines in Europe became part of the three global airline alliances. The three alliances are Sky Team, Star, and One World (Cameron, 2012). Both Etihad Airways and Emirates Airlines have not pursued membership in any of the three alliances. Rather, the two airlines are using different strategies to counter the impact of the alliances. Emirates Airlines is famous for its individualist attitude (Griffiths, O’Callaghan, Roach, 2008). It prefers organic growth and battling for market share, rather than forming alliances and partnerships with other airlines. As such, the recent alliance with Australian Qantas is an exception rather than the rule in the marketing strategy of the airline (Rivers, 2012). On the other hand, Etihad Airways bought equity in Virgin Australia and Air Berlin (Thomas, 2011). Etihad prefers to buy stake in established brands in markets that it does not want to commit operational resources. This gives the company the advantage of local presence without brand building obligations. This is a faster way to penetrate a market and it offers the airline the opportunity to understand a market without the risks ass ociated with fresh market entry. This fits with Etihad’s strategy of favoring growth over profitability in the short term. The two airlines are scrambling for space in the international aviation markets. Both have set their eyes on the American, Australian, and Chinese markets. Etihad Airways is on track to launch flights to two cities in the Americas. The maiden landing of both airlines in Tokyo on the same day is symbolic of the market rivalry between the two players (Wright Underwood, 2010). On the part of Australia, Etihad is part of Virgin Australia as a shareholder, while Emirates Airlines is working with Qantas to access the Australian Market. Further East, the booming Chinese economy is leading to an increase in demand for international flights (Zhu, 2010). This demand comes from traders seeking markets for their products, and foreigners going to China to buy goods. In addition, a growing middle class in China needs flights to other countries where they can go to tou r. All these factors serve to intensify the rivalry of the two carriers. The acquisition of big planes, ostensibly to enhance the capacity for long range flights is also a common feature in the rivalry between the two airlines. Etihad has plans to buy up to ninety new planes from Boeing to increase its current fleet (Cameron, 2012). Fourteen of these will be ready within 2013. On the other hand, Emirates Airlines signed a deal with Airbus for the supply of 32 Airbus 380 Jumbo jets (Thomas, 2011). This focus shows a strong commitment to long-term growth in the wake of increasing demand for air transport. The final element in the rivalry between Etihad Airways and Emirates Airlines is in the cargo business. There is increasing demand for cargo haulage across the world. This demand is strengthened by the increasing volume of cargo transiting via Dubai (Griffiths, O’Callaghan, Roach, 2008). The result is that the two airlines are responding to the growing demand by increasing th eir cargo fleet. Etihad Airways is increasing the cargo space in its new passenger aircrafts to enable it to take advantage of the cargo business that falls within its passenger routes. This is in addition to increasing its fleet of cargo jets. Long Term Prospects of the Two Airlines Despite the rivalry of the two airlines, both airlines have very good prospects. The two airlines are pursuing aggressive growth that will see Emirates become the largest airline in the next three years. The basic aspect of the rivalry between the two airlines is that they are not local carriers. They are international carriers. This gives both of them unique competitive advantages that rivalry alone cannot wipe off. There is increasing demand for air transport across the world. This demand is strongest in Asia and the Australian region (Walker, Walker, Schmitz, 2003). The demand for air transport in Africa is also growing. This means that the two companies are competing for new business, based on thei r unique competitive advantages. The growth in demand for air transport comes from the increasing demand for goods and services from Asia. This demand is also growing because of an increasing number of tourists and traders from Asia and the Middle East, and increasing travel by students, researchers, and government officials to Asia and the Middle East (Walker, Walker, Schmitz, 2003). Secondly, the location of the UAE is strategic. The location of the UAE makes it an ideal hub for international travel. The fact that the leaders of the UAE used this location to position Dubai as a trading hub proves this point. Dubai is an ideal replacement for European cities as a hub for international transport (Corson, Heath, Bryant, 2000). This advantage, coupled with the fact that the UAE airlines have planes that can reach almost any point on earth, makes UAE’s geography and business positioning a strong competitive advantage. These advantages are available to both airlines. The Emirat es Airlines historically favored organic growth in its operations. The airline giant started operations with a single leased aircraft twenty-five years ago. The Emirates Airlines did not make any deals with other airlines to form partnerships and alliances. The success of Emirates is proof that its business model is sustainable. This means that the airline is strong enough to go into the future. On the other hand, Etihad started with a larger fleet, and sought to gain market share rapidly. Etihad is more open to diversification. Its preferred model is buying a stake in local airlines to benefit from existing market conditions, without the additional burden of brand building. This concept is similar to the one used by many international airlines that form part of the three global alliances. It is also a sustainable model on its own. Therefore, the fact that Etihad and Emirates are rivals at home does not mean that either of them is in any kind of disadvantage. In fact, their rivalry is causing them to pursue aggressive growth strategies, which is making then formidable airlines. Finally, the two airlines enjoy strong government and private sector backing. The Emirates Airlines receives support from the Dubai government while Etihad receives support from several small backers in the Emirates (IATA, 2012). This support increases market confidence in the two airlines and makes them more secure at home. These factors prove that the two airlines have a strong future ahead of them regardless of their rivalry. The question is not whether the two airlines can survive the rivalry. Rather, the question is which of the two airlines will emerge stronger. Conclusions The main difference between the two companies is in market fundamentals. Emirates Airlines has a history of profit making, because it grew organically by fulfilling market demand over the last twenty-five years. Etihad Airways on the other hand entered the market to take advantage of the lucrative market that c ame up in Abu Dhabi. The company is just about to start posting profits. Several elements define the rivalry between the two airlines. The following five elements indicate the defining issues. First, the two are not keen on joining any of the three global alliances (Cameron, 2012). Secondly, both airlines prefer to form partnerships with other airlines to increase their operations efficiency (IATA, 2012). Thirdly, the two airlines are showing strong interest in the Americas, Australia, and China (Wright Underwood, 2010). Fourth, both airlines have very ambitious growth plans. Finally, both airlines are turning their attention to cargo business. The fact that there are strong growth prospects comes from the increasing demand for air transport, and the strategic nature of the UAE as a transport hub. In addition, the two airlines have developed different but sustainable growth models and they both enjoy strong domestic support. References Byrne, C. (2011). People Analytics: How Google does HR by the Numbers. Venture Beat . Cameron, D. (2012). Airlines Shuffle Marketing Alliances. The Wall Street Journal , 1-4. Corson, D., Heath, R. L., Bryant, J. (2000). Human Communication Theory and Research: Concepts, Context, and Challenges (2nd ed.). Mahwah, NJ: Lawrence Erlbaum Associates, Inc. Griffiths, M., O’Callaghan, T., Roach, S. C. (2008). International Relations: The Key Concepts. London: Taylor and Francis. Hartley, R. F. (2007). Continental Airlines: Salvaging from the Ashes. Michigan: Wiley. IATA. (2012). CEO Interview: Etihad – Staying Focused. Web. Johnson, W. D., Johnson, T. R. (2009). 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