The Low Cost Airline Air Arabia Tourism Essay Example

The Low Cost Airline Air Arabia Tourism Essay Air Arabia is one of the low cost air hoses of UAE, based in Sharjah. It soon is runing in more than 45 finishs consisting of major metropoliss in south-east Asia, Middle-East and few parts of cardinal Asia and Africa. Air Arabia is besides registered in AACO or Arab Air Carriers Organization In the recent old ages the menace due to its replacement rivals was about nullified. They stood nowhere in forepart of Air Arabia but there had been a changeless menace from the approaching new rivals. Though the new rivals were non plenty to dispute Air Arabia, there was still some sort of menace because the Numberss of such rivals were increasing twenty-four hours by twenty-four hours. In UAE ab initio there were many air service suppliers, but in the recent times Air Arabia has proved to be the most effectual one compared to its old rivals. With the increasing oil monetary values the rivals of Air Arabia increased their monetary values, but Air Arabia kept its low budget menus in order to derive more and more public support at the cost of impermanent loss or small fringy addition. We will write a custom essay sample on The Low Cost Airline Air Arabia Tourism specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on The Low Cost Airline Air Arabia Tourism specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on The Low Cost Airline Air Arabia Tourism specifically for you FOR ONLY $16.38 $13.9/page Hire Writer The low cost bearers are so effectual that they helped Air Arabia win Merit Award for CAPA Low Cost Airline of the Year 2006 and the World Airline Award for Best Low-cost Airline in the Middle East in 2007. The biggest menace that Air Arabia has is from its rivals. The ground for the same is that one time a company gets a comment of dissatisfying its clients by non making as advertised, the rivals take advantage. Key schemes include: Entering in new sections and therefore taking dependence on scorch section ( low cost bearer ) . Arranging financess to purchase more financess. Balancing between increasing rising prices and commanding the monetary values of the tickets. Geting new and little air hoses for faster enlargement. Geting listed at new airdromes and get downing operation in new topographic points. Supporting authorities s Emiritization scheme to acquire more federal support. Talking about the execution of schemes, for increasing its selling dimension, the company has invested over DH one million in footings of Ads, both online and print media. This would ensue in a long term net income for the company, though it s rather a heavy sum on the footing of company s current scenario. More includes: International flight linking Abu Dhabi to more than 45 international finishs in USA, Indian subcontinent etc. Air Arabia carried over 4.6 million riders, an augment of about 65.8 % over in 2006. ( Lowcostairlinesworld, 2009 ) Along with this, it besides griped 175,000 dozenss of cargo in 2007, which is an addition of over 75 % than the twelvemonth 2006. Introduction: Air Arabia is one of the low cost air hoses of UAE, based in Sharjah. It soon is runing in more than 45 finishs consisting of major metropoliss in south-east Asia, Middle-East and few parts of cardinal Asia and Africa. Air Arabia is besides registered in AACO or Arab Air Carriers Organization . It was the first low-fare organisation in the Middle-East, started on 3rd February in the twelvemonth 2003. It offers about 40 % less monetary value than the other air hoses. The chief base of the air hose is Sharjah. In 2007 it was the first to offer public 55 % of its stock. It fundamentally aims at pulling the people. After its foundation it kept on distributing in services. For the clip in 2008 it had to endorse out from the Nepal part due to some unsure political and economic issues. It has collaborated with many other air hoses in many parts of the universe. Vision: The ultimate end of the company is to place itself at the top of all the Low-fare air hoses in UAE and in Gulf. The cardinal characteristics of Vision of the company are as follows: aˆ? Expanding its aircraft scope aˆ? To supply service on more figure of paths aˆ? To heighten efficiency of operations aˆ? And to increase its gross keeping a low and simple construction of low air-fare industry. Mission: The company s mission includes edifice and making multi-functional squad, addition gross and offering a value for money services in the part. The ultimate mission is to convey a revolution in the fear industry by new and advanced corporate criterions. Industry background: The air hoses industry of UAE is huge if we look at the figure of service suppliers. There are figure of low cost air hoses. National air hoses of UAE other than air Arabia include Gulf Air, Emirates and Etihad. Gulf air was started long ago in 1950. It provides a figure of installations to its users. First it has provided many onboard installations to kids below the age of 12. For the concern related people it provides the BBC universe intelligence. It besides provides separate dinning for the riders. It is treated as a standard national flight for most of the intents. Emirates air hoses were introduced after Gulf Air in 1985. It is besides considered as a national flight. It has won several awards for its services. This air hose consists of many air planes both for public and private issues. Etihad is the most recent one and was introduced after air Arabia in the same twelvemonth. It had besides become rather popular but could non vie with Air Arabia on low cost. A Kam air menu is besides considered as one of the low cost air hoses in UAE. Among all the bing national air hoses boulder clay day of the month Air Arabia is considered to be the cheapest 1. It is non considered to be a flight with the best installation on board but of class it offers a inexpensive menu t its clients. The installations provided by these national air hoses to their clients vary from each other. All these air hoses greatly contribute to the national economic system of UAE. Statement of job: In this study, we will speak about the cardinal schemes of Air Arabia, surrogate schemes available, execution, and SWOT, PEST and rival analysis of Air Arabia. For this concern, an interview with a director of the company is organized. The Manager stated that Air Arabia is making well good in its sphere which is soon concentrated to low cost air hose section. For long term position, the company is taking to come in in more sections than this alone. There are figure of strategic jobs the company is confronting. These are: Entering in new sections and therefore taking dependence on scorch section ( low cost bearer ) . Arranging financess to purchase more financess. Balancing between increasing rising prices and commanding the monetary values of the tickets. Geting new and little air hoses for faster enlargement. Geting listed at new airdromes and get downing operation in new topographic points. Supporting authorities s Emiritization scheme to acquire more federal support. Analysis: Environmental or Industrial Analysis: Air Arabia believes in supplying a superior and cost efficient life support system by presenting advanced installations and more handiness to derive client satisfaction. It aims to be a company that has value and importance based on sort of services it provides. The organisation has certain ethical motives when it comes to staffing and squad work, keeping client relationship, honestness, truthfulness, and flexibleness are that satisfy the evidences. The clients of the Air industry are in all signifiers. The aircrafts are used for the security of states and so travel to the authorities. Then importers and exporters of the market that import goods from every bit little as veggies to autos. So in bend we besides are utilizing these services. They are used for the people to go. The aircrafts are the bulk signifier of transit in the recent times. Porter s five forces analysis The menace of utility rivals: In the recent old ages the menace due to its replacement rivals was about nullified. They stood nowhere in forepart of Air Arabia. The other replacements kept on worsening and the company Air Arabia kept on bettering speaking in footings of net income in the market. The other companies could non offer such a low menus as compared to Air Arabia whose menus were singular. The menace of the entry of new rivals There had been a changeless menace from the approaching new rivals. Every now and so many new companies were launched along with the bing 1s. They all tried to fit up to the degree of Air Arabia but finally failed to go on on a long tally. They met with immense loss and finally ended up in increasing the cost. All these rivals tried to copy Air Arabia based on service it provides, but they failed to modulate them on a regular footing based on public satisfaction and demand. The strength of competitory competition Though Air Arabia continued to rule the market in the recent old ages, it had non been an easy occupation. It ever had to maintain itself watchful and altering. Though the new rivals were non plenty to dispute Air Arabia, there was still some sort of menace because the Numberss of such rivals were increasing twenty-four hours by twenty-four hours. Air Arabia had to maintain a study of the predominating market conditions and take safe determinations to maintain traveling. Marketing facet of the company became important in keeping the market place. The bargaining power of clients Sing the bargaining power in instance of Air Arabia is a mere thing if we compare it with the installations it provides and the deficiency of able rivals. Peoples were non much into bargaining because Air Arabia had been the best available among all the others. However, in times of strong competition by some new challengers there had been some sort of bargaining by the clients, which was gracefully accepted for that period. The bargaining power of providers Suppliers in this instance refer to the stock holders of the company. They besides got a immense price reduction on available stocks. Besides the sum of available public stocks was well increased. They besides get a good sum of one-year dividend. Besides due to enlargement of their concern the stock holders made a immense net income. Rival Analysis: In UAE ab initio there were many air service suppliers, but in the recent times Air Arabia has proved to be the most effectual one compared to its old rivals. With the increasing oil monetary values the rivals of Air Arabia increased their monetary values, but Air Arabia kept its low budget menus in order to derive more and more public support at the cost of impermanent loss or small fringy addition. This was really important in giving Air Arabia a place rather different from others. Among all the bing national air hoses boulder clay day of the month Air Arabia is considered to be the cheapest 1. It is non considered to be a flight with the best installation on board but of class it offers a inexpensive menu t its clients. The installations provided by these national air hoses to their clients vary from each other. All these air hoses greatly contribute to the national economic system of UAE. SWOT Analysis: Strengths Sing the instance of Air Arabia, the low cost menu plays a important function in deriving the public involvement. The low cost bearers are so effectual that they helped Air Arabia win Merit Award for CAPA Low Cost Airline of the Year 2006 and the World Airline Award for Best Low-cost Airline in the Middle East in 2007.A With the increasing substructure, high regional GDP and a immense demand in assorted parts, air travels are lending to the success of low cost bearers in UAE. The ground for Air Arabia being so popular among all the parts of the universe is its award winning schemes. These awards add a great trade in their selling scheme which helps to bag future success. Air Arabia has been able to publicize its concern in the undermentioned ways: Travel bureau committees stopped Removal of interline, code-share relationships Use of secondary or alternate metropolis airdromes ( Eyefortravel, 2008 ) A As a figure of people have begun to experience the same, it is surely a positive facet of advertisement for Air Arabia. Failing The greatest failing that most of the air hoses companies are confronting presents is that they have non been able to populate up to their outlooks. On many occasions, Air Arabia has agreed on certain winging to certain finishs but it has non lived up to it. One such concern is that when the air hose company promised to wing to some of the most restricted finishs in the universe, it could non do it to Cairo as it most extremely expected by the tourers and other regular riders. So, as the advertizement said they did non book their expensive tickets through different air hose companies but at the same clip did non acquire the chance to go at all. Some of the major accoutrements as expected by the riders in Air Arabia in malice of its low cost are as follows: Amenity Kits Air Sickness Bags In-flight socks Eye sunglassess Blankets Headsets Opportunities High GDP Growth Ratess: Petroleum extraction and refinement operations have been on an all clip high in the UAE in the past few old ages. This has helped in the encouragement of the economic system of UAE. Air Arabia can take advantage of this fact and can assist do the usage of its low cost bearers more outstanding. A Positive Demographics: The per centum of young person ( under 30 old ages ) in the UAE is 64 % . This will supply a high in the hereafter market as liberalisation opens market even to air travel. It is one of the of import factors for Air Arabia to choose its aiming scheme. Strong Tourism: The energy and entrepreneurial spirit of the middle-east part is pulling touristry and concern traffic in its ain right. Ad can be done with all the touristry companies so as to do the circuit extremely low-cost for the tourers. Menaces The biggest menace that Air Arabia has is from its rivals. The ground for the same is that one time a company gets a comment of dissatisfying its clients by non making as advertised, the rivals take advantage. The other ground of menace for Air Arabia is that all the freshly unifying air hose companies are in a fling to capture the market by doing a strong repute. Once they come up with monetary value menus lesser than Air Arabia so even the best of advertisement would neglect. Company s public presentation: Air Arabia is one of the low cost air hoses of UAE, based in Sharjah. It soon is runing in more than 45 finishs consisting of major metropoliss in south-east Asia, Middle-East and few parts of cardinal Asia and Africa. Air Arabia is besides registered in AACO or Arab Air Carriers Organization . The company s mission includes edifice and making multi-functional squad, addition gross and offering a value for money services in the part. It was the first low-fare organisation in the Middle-East, started on 3rd February in the twelvemonth 2003. It offers about 40 % less monetary value than the other air hoses. The chief base of the air hose is Sharjah. In 2007 it was the first to offer public 55 % of its stock. It fundamentally aims at pulling the people. After its foundation it kept on distributing in services. For the clip in 2008 it had to endorse out from the Nepal part due to some unsure political and economic issues. It has collaborated with many other air hoses in many parts of t he universe. ( Ameinfo, 2009 ) Cardinal Schemes: A cardinal strategic issue includes: Entering in new sections and therefore taking dependence on scorch section ( low cost bearer ) . Arranging financess to purchase more financess. Balancing between increasing rising prices and commanding the monetary values of the tickets. Geting new and little air hoses for faster enlargement. Geting listed at new airdromes and get downing operation in new topographic points. Supporting authorities s Emiritization scheme to acquire more federal support. The company is seeking to present low cost flights so that more and more people avail them. There are fundamentally aiming on two countries. First of all they are cut downing some unneeded installations on short clip journeys. Removing these installations based on such a low cost barely affects public involvement. Second, they are seeking to cut down the carnival on some paths and at the same clip increasing the figure of flights on these paths. This means deriving public involvement and support based on low fringy net income. Other than offering inducements to its clients it besides offers heavy dividend and price reductions to stock holders. It was the first flight to supply so much of discount to its clients and stock holders. It keeps on increasing the installations offered in order to maintain the involvement maintained. ( Ameinfo, 2009 ) Air Arabia has late expanded its aircraft ranges. It has tried to spread out the concern in by presenting new paths in many parts of the part. There are more and figure of aircrafts in the parts where there were less no of aircrafts. Now the flights are available more often in some paths based on sum of net income made in the bing paths. In order to increase the value of its stocks in the market, the company has released more no of stocks to the populace with price reductions. The schemes, the growing and the hereafter programs offered by Air Arabia are sufficient to pull more and more stock holders which finally lead to enlargement in footings to money, power and public support. It has besides appeared on many other stock lists and minutess are besides about to get down. ( Eyefortravel, 2008 ) The company had been really peculiar in make up ones minding the cost of conveyance. It kept in head the rise and the falling monetary values of oil and other equipments, straight or indirectly related to their concern. In other words, they maintained a complete study of the predominating market. With the addition in the fuel monetary values many air hoses companies increased their monetary values and frailty versa. There are other schemes which were used for selling at fiscal degree. The company has gained a batch from them. The net income border has increased by 40 % in the recent old ages and there are still opportunities of farther addition. These all schemes have proved fruitful both for the company and the company stock holders which are straight or indirectly related to the company. The company has been able to keep up to the outlooks of its employees and its clients. Air Arabia greatly contributes in the UAE economic system. Recently it got an blessing to look on Dubai fiscal list. The Air Arabia is traveling to look on stock list of Dubai fiscal market and trading it will be started in few yearss. The manner Air Arabia is utilizing the budget and the manner it is using the schemes it is believed that in the clip to come if there is a slow economic system advancement, Air Arabia entirely can manage it. Strategic Options: Some schemes of Air Arabia for future few old ages are as follows: Expanding its aircraft scope: One of import restraint in company s enlargement program is the limited figure of lading and rider planes available to the company. The company will put periodic orders for new aircrafts to back up its enlargements programs. To supply service on more figure of paths: The company would wish to function in European states and other untasted finishs in North and South America. The enlargement will give a huge increase in company s present market size. To heighten efficiency of operations: As a long term scheme, the company would wish to implement TQM schemes in its operations. Increase its gross keeping high and choice construction of epicurean aircraft industry Another one is Emiritization and promotion of UAE people. The company has a figure of programs in this way with long term involvement which are mentioned as follows: UAE National Cadet Pilots Training or UNCPT The company invites aspirers who what to go a pilot with a statement like We are giving wings to your dreams . Its pilot preparation plan is one of the finest in the state. The company states that as the public Airline of the United Arab Emirate, it has an huge vision. To see farther Emiratis taking their right place as pilots in lone of the fastest mounting air hoses on the planet. UAE National Graduate Entry Management Plan The public air hose of the UAE, Air Arabia, is puting in its mentality and would accordingly like to pass in people by giving them the opportunity to be 1 of the privileged pupils chosen to fall in its UNGEM plan. It states that by this plan, alumnuss will develop hardy leading abilities and organize a aggregation of professionals who are organized to run into rapidly spread outing and developing leading wants in assorted subdivisions within the company. ( Eyefortravel, 2008 ) Enhancing the lading bearer s flights: As shown from the part of net income from the lading and client units, the lading unit contributes around 65 % of the company s turnover, which depict the clear laterality of lading unit over the client unit in footings of net income. The company would wish to use this religion of people in Air Arabia s lading unit to derive extra market portion. Therefore as an enlargement program for lading unit, the company is telling more portion of lading planes as compared to that of rider planes. Cleavage and targeting: The Company had divided the consumer market into assorted sections based on income and profession. The section which appears to be the centre of consideration for the company is those of high gaining boniness people who need to go systematically and comfortably. Positioning: It s really consumer s perceptual experience about the service. Royal Jet, from the beginning has tried to set up as a symbol for a inexpensive but dependable air traffic concern spouse. Execution: Air Arabia greatly contributes in the UAE economic system. Recently it got an blessing to look on Dubai fiscal list. The Air Arabia is traveling to look on stock list of Dubai fiscal market and trading it will be started in few yearss. It has already started offering discounts on stocks to its clients. The national economic system of UAE is traveling to be benefited by the sort of schemes being forwarded by Air Arabia. Not merely are they traveling to hold a immense concern but besides a immense investing in the stocks by the common people. The market is traveling to be greatly affected. Many new services are being started. The UAE authorities believes that Air Arabia can alone increase the UAE economic system from traveling down. It has now met with 32 % net income which is the highest of all time in the recent old ages. For increasing its selling dimension, the company has invested over DH one million in footings of Ads, both online and print media. This would ensue in a long term net income for the company, though it s rather a heavy sum on the footing of company s current scenario. ( Arabia, 2009 ) Use of engineering: The Company has late brought 7 new aircrafts with increased capacities and progress engineering. As the company is still really new, about all of the aircrafts are in good status. Talking about other technological diffusion parametric quantities, the company has late brought a SAP system which is an adept system from Sap international. This expert system is Artificial Intelligence based and works on cognition representation instead than informations use, therefore is extremely proficient and progress. The operation unit exploits the SAP system to expeditiously supervise the assorted facets and stock list components. The company besides has an on-line terminus to book tickets and offers assorted programs in flights harmonizing to client demands. International flight linking Abu Dhabi to more than 45 international finishs in USA, Indian subcontinent etc. Air Arabia carried over 4.6 million riders, an augment of about 65.8 % over in 2006. Along with this, it besides griped 175,000 dozenss of cargo in 2007, which is an addition of over 75 % than the twelvemonth 2006. ( Ameinfo, 2009 ) Air Arabia owns complete portion is its two subordinates, Air Arabia Holidays, a travel group and vehicle rental company and Air Arabia Crystal Cargo , which provides cargo managing services. Air Arabia had a 24 hr aid line for its clients. Air Arabia besides provides cordial reception services by supplying impermanent adjustment in hotels. ( Arabia, 2009 ) The Air Arabia owned a group of 37 traveller and lading aeroplanes, as depicted by the information of January 2008 and it program is to increase its aircraft group to 300 by the twelvemonth 2020. Air Arabia is besides be aftering to wing over 25 million clients per twelvemonth by 2020 and to twofold the figure of metropolitans served from 50 to do it near 100. Market cleavage: Soon the market is segmented on the footing of income and going frequence of the people. It consequences in coevals of sections like high concern category consumers, consumers going excessively frequently but using less, touristry based consumers ( non fixed ) etc. Apart from these sections, a assortment of new sections can be created like low-spending domestic category, chiefly for touristry. As illustration of this section can be India s turning domestic air power market which depends small disbursement but big sized section. Talking about the rival s engagement in these sections, Etihad is a large participant of inexpensive flights sections along with Easy jet. Some other like Palm operates in multiple sections. Some rivals are head to head challenger of Air Arabia in Luxury market like Sky jets etc. Thus the rivals are widely spread in these sections. Mentions: Ameinfo ( 2009 ) , Air Arabia selling squad takes centre phase , retrieved on 1st November, from hypertext transfer protocol: //www.ameinfo.com/29672.html Eyefortravel ( 2008 ) , Air Arabia plans enlargement , retrieved on 1st November, from hypertext transfer protocol: //www.eyefortravel.com/news/middle-east/air-arabia-plans-expansionddle-east/air-arabia-plans-expansion Lowcostairlinesworld ( 2009 ) , Invention and chance for traditional and low cost bearers and investors , retrieved on 31st October from hypertext transfer protocol: //www.lowcostairlinesworld.com/sg/programme.stm Air Arabia ( 2009 ) , Know us , retrieved on 1st November, from hypertext transfer protocol: //www.airarabia.com/crp_1/know-more